Cummins India's consolidated net profit soared 365.7% to Rs 246.94 crore on 141% jump in net sales to Rs 1,177.71 crore in Q1 June 2021 (Q1 FY22) over Q1 June 2020 (Q1 FY21).
Consolidated profit before tax surged 341.50% to Rs 313.75 crore in Q1 FY22 as against Rs 71.06 crore in Q1 FY21. The Q1 result was declared post market hours yesterday, 11 August 2021.
On a standalone basis, total sales for the quarter stood at Rs 1,167 crore, increasing 141% compared to the same quarter last year and declining 5% compared to the preceding quarter. Profit before tax (before exceptional items) at Rs 171 crore, rising 143% as compared to the same quarter last year and 30% lower as compared to the preceding quarter.
Domestic sales stood at Rs 859 crore, improving 140% compared to the same quarter last year and declining by 12% as compared to the preceding quarter. Exports sales stood at Rs 308 crore, improving 144% as compared to the same quarter last year and improving 21% as compared to the preceding quarter.
Commenting on the Q1 results, Ashwath Ram, the managing director (MD) of Cummins India, said, "During the quarter, India experienced a rapid spread of the second wave of COVID-19, which resulted in a significant rise in infection and mortality. Various state and local governments imposed severe restrictions to control the spread of the virus. The Government prioritized oxygen supply for healthcare purposes. The supply of parts was severely disrupted during this period, leading to inefficiencies in plant operations that impacted shipments during the quarter. Customer and supplier factory operations were also disrupted."
"By early June 2021, the supply chain started to recover; as of date, the supply chain is slowly returning to the expected level of operations. The company took proactive actions to ensure optimal utilization of plant operations to ensure supply commitments to customers. Imported parts, especially electronics and semiconductors, continue to have a long lead time; the company is taking proactive steps to manage inventory levels of such components. While we operate through these trying times, our priority continues to be the safety and well-being of our employees, supporting our communities, serving customers, staying on course with our product development initiatives, prudently managing cost, and conserving cash."
"For the safety and well-being of employees and their families, the company organized vaccination camps at various company locations. Approximately 19,000 persons, that includes employees of other Cummins Group entities and their families, were inoculated. Our domestic markets for the quarter continued to show promise propelled by the Government's push on infrastructure, pent-up demand, and economic recovery across multiple segments. In our export market, we see demand revival in quite a few regions as countries recover based on an increased vaccination pace and an abating infection trend."
"The company continues to navigate this period of uncertainty with a strong balance sheet, excellent manufacturing and service infrastructure, committed workforce, and best-in-class processes. The company continues to take steps to introduce newer and more efficient technologies in the market. During the quarter, the company introduced several new products in Power generation, Industrial, and Distribution segments to continue to provide world-class products and technologies to domestic and export customers," he added.
In its outlook, Cummins India said that it is hopeful of sequential recovery in economic activities based on the pace of vaccination around the country, stabilizing supply chain that is ramping up, the increase in government and private capex cycle and recovery in broader consumption across various market segments.
However, market conditions remain uncertain, and the visibility of complete end market recovery is somewhat limited, mainly due to anticipation of the third wave of COVID-19. Thus, the company has not provided full-year revenue guidance for FY 2022.
Shares of Cummins India were up 0.08% at Rs 945.55 on BSE. The scrip hit a 52-week high at Rs 970.95 during intraday trade.
Cummins India, part of the Cummins Group, is the country's leading manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
