Cummins India (500480) Q4 02/03 earnings summary

Executive summary

• FY03 net sales rose 12% to Rs 8,320 million and PAT rose 9% to Rs 943 million; amalgamated subsidiaries contributed Rs 1,336 million of sales, making YoY comparisons less like-for-like.

• Domestic sales growth offset a 36% decline in exports as overseas power-generation markets remained weak.

Financial highlights

• Sales were Rs 8,319.5 million vs Rs 7,409.1 million; PBT Rs 1,209.2 million vs Rs 1,140.1 million, up 6%.

• PAT was Rs 943.1 million vs Rs 863.1 million, up 9%; basic and diluted EPS was Rs 4.76 vs Rs 4.36.

• Export earnings totaled Rs 1,762.1 million vs Rs 2,755.5 million; export engine shipments fell amid global power-generation weakness.

• Other income increased to Rs 456.9 million from Rs 364.0 million; investment income and gains on investment sales/redemptions were key components.

Outlook and guidance

• Industrial growth and capital investment were forecast at ~6% for 2003-04; telecom, construction, infrastructure and captive generation were expected to support demand.

• Planned power-generation product upgrades and new introductions target 15–2,000 KVA; full benefits were expected in future years.

• Export initiatives included generator sets, component exports and market diversification; component export sales were targeted to exceed Rs 60 million in 2003-04.

• Water-well rig and construction-equipment demand was expected to dip near term, with a rebound anticipated before year-end; cost reduction and process improvement remained priorities.