Cummins India (500480) Q4 00/01 earnings summary

Executive summary

• FY ended Mar. 31, 2001: sales rose 4% to Rs. 8,632 mn and PAT increased 17% to Rs. 1,089 mn; sales volume fell 7%, offset by higher-value mix and improved realization.

• PBT grew 12% to Rs. 1,445 mn, outpacing sales growth amid cost inflation, supported by mix, indigenisation, lower interest and higher other income.

Financial highlights

• Sales of Rs. 8,632 mn vs Rs. 8,290 mn; domestic sales Rs. 5,778 mn vs Rs. 5,542 mn and exports Rs. 2,854 mn vs Rs. 2,748 mn.

• PAT was Rs. 1,089 mn vs Rs. 933 mn; EPS Rs. 5.50 vs Rs. 4.71 on Rs. 2 face-value shares.

• Other income increased to Rs. 227 mn from Rs. 211 mn; investment income and gains rose to Rs. 93 mn from Rs. 64 mn, while export benefits fell to Rs. 15 mn from Rs. 75 mn.

• Adjusted for the prior-year opening-inventory restatement of Rs. 88 mn, FY 2000-01 net profit remained Rs. 1,089 mn; the restatement is separately reflected in the accounts.

Outlook and guidance

• Weak markets and lower investment weighed on demand, but stronger demand was expected in the latter half of the current year if the economy improved.

• Planned launches included 200–400 HP models for Power Generation, Industrial and Construction applications, with the global product range also to be made available to customers.

• Engine census initiative targeted higher aftermarket parts and service sales; Six Sigma projects were launched to improve core processes.