Cummins India shares advanced around 11 per cent in the early trade on Wednesday, a day after the company announced its financial results for the quarter ended December 31, 2019. Minutes later however, the stock pared majority of its gains to trade around 4 per cent higher at Rs 608.50 apiece on the BSE. The stock hit a high of Rs 652.80 in the early deals.
During the quarter under review, net sales (revenue) of the company stood at Rs 1,428 crore, down 2 per cent as compared to Rs 1,463 crore registered in the same quarter last year and grew by 11 per cent compared to Rs 1,285 crore recorded in the preceding (July-September) quarter.
Profit before tax (excluding exceptional items) came in at Rs 254 crore, down 6 per cent as compared to Rs 270 crore recorded during the same quarter last year and 21 per cent higher as compared to Rs 210 crore registered in the preceding quarter. Profit after tax (PAT) or net profit during the quarter stood at Rs 186 crore, down 0.5 per cent against Rs 187 crore profit logged in the year-ago period.
The company also announced an interim dividend of Rs 7 per share. "The Dividend warrants for the said interim dividend will be dispatched by February 24, 2020 and the dividend will be paid on February 26, 2020," the company said in its press release.
"In the domestic business, our distribution business had their best quarter in history, registering strong growth at 18 per cent due to execution on certain contracts, while the Industrial business grew 8 per cent led by the compressor and rail segments," said Ashwath Ram, Managing Director at Cummins India. "We executed on our cost optimization measures including zero based budgeting, to reduce our overall spend including on employment costs and have created an environment where
people are conscious about every element of cost. These measures are being taken to help weather this slow demand cycle," Ram added.
Domestic sales increased 4 per cent to Rs 1,058 crore. Sequentially, the numbers grew 12 per cent as compared to Rs 947 crore recorded during preceding quarter.
Exports for December quarter declined 16 per cent to Rs 370 crore as compared to Rs 441 crore recorded in the same quarter last year, however the numbers improved 10 per cent over Rs 337 crore recorded in the preceding quarter.