Cummins India shares slide over 3% as company faces customs penalty

Shares of compressor, pump, and diesel engine manufacturer Cummins India fell 3.18 per cent to a day's low of Rs 2,847.35 during intra-day trading on Wednesday, January 15, on the National Stock Exchange (NSE). The decline in the company's share price followed news that the company had received an order imposing a fine/penalty by the Office of the Commissioner of Customs – Nhava Sheva, Maharashtra.

 

"The company has received an Order-In-Original (O-I-O) confirming a demand for differential customs duty of Rs 4,39,75,248, along with interest of Rs 1,48,82,407, a penalty of Rs 4,39,75,248 under Section 114A of the Customs Act, 1962, an additional penalty of Rs 30,00,000 under Section 114AA of the Customs Act, 1962, and a redemption fine of Rs 4,20,00,000, aggregating to Rs 13,29,50,496. This is based on allegations of incorrect availment of customs duty concessions on imports under Customs Notification No. 50/2017 of the Customs Act, 1962," Cummins India said in a regulatory filing.

 

Cummins India further said that it will file an appeal with the appropriate authority (CESTAT) seeking withdrawal of the penalty and redemption fine.

 

Cummins India is engaged in the business of manufacturing, trading, and selling engines and related products. It operates in three business segments: Engine, Power Systems, and Distribution. The engine business manufactures engines from 60 HP for low, medium, and heavy-duty on-highway commercial vehicle markets and the off-highway commercial equipment industry, including construction and compressors. The power systems business designs and manufactures high-horsepower engines from 700 HP to 4,500 HP for marine, railway, defense, and mining applications. 

 

As of January 15, 2025, Cummins India had a market capitalisation of Rs 79,279.20 crore on the NSE.

 

The company's shares hit their 52-week high of Rs 4,171.90 on June 25, 2024, while they reached a 52-week low of Rs 1,948 on January 18, 2024, on the NSE.

 

Cummins India's share price has fallen 26 per cent in the last six months but advanced 39 per cent in the last one year.

 

At around 1:50 PM on Wednesday, Cummins India shares were quoted at Rs 2,852.10, down 3.02 per cent from their previous close of Rs 2,940.95 on the NSE. A combined total of nearly 0.42 million equity shares of Cummins India had exchanged hands on the BSE and NSE, valued at approximately Rs 121.35 crore as of the time of writing.

 

Meanwhile, the benchmark equity indices were trading flat on Wednesday. The NSE Nifty50 was quoted at 23,172.25, down merely 0.02 per cent, while the 30-share Sensex was up 48 points at 76,548.25.