Cummins India (500480) Q4 04/05 earnings summary

Executive summary

• FY2004-05 standalone sales rose 28% to Rs 11,918 million and net profit rose 26% to Rs 1,372 million, despite inflation in steel, copper and fuel oils.

• Profitable growth was supported by higher volumes, export momentum and cost initiatives that more than offset commodity inflation.

Financial highlights

• Standalone PBT increased 34% to Rs 1,853 million; PAT was Rs 1,372 million versus Rs 1,093 million in FY2003-04.

• Standalone sales were Rs 11,918 million, up 28%; domestic sales rose 12% to Rs 7,955 million and exports increased 79% to Rs 3,963 million.

• Consolidated sales reached Rs 14,711 million; consolidated PAT was Rs 1,334 million versus Rs 967 million in FY2003-04.

• Consolidated PBT rose to Rs 1,987 million from Rs 1,379 million; EPS was Rs 6.74 versus Rs 4.88.

Outlook and guidance

• Target set to more than double business profitably by 2008 versus 2004, while growing domestic share, exports and cost competitiveness.

• Infrastructure investment expected to support demand; export growth programs were positioned to drive expansion over the next 24 months.

• Power consulting and power-quality products were forecast to grow 50–60% annually; water-well rig demand was not expected to recover before early 2006.

• Continuing Six Sigma and material-cost initiatives were expected to deliver further savings over the next 24 months.