Cummins India (500480) Q4 06/07 earnings summary

Executive summary

• FY 2006-07 delivered record results: standalone sales rose 26% to Rs 18,408m and profit before tax rose 41% to Rs 3,460m.

• Growth reflected strong Indian demand, export gains, and performance across power generation, industrial and automotive businesses.

Financial highlights

• Standalone net profit was Rs 2,420m versus Rs 1,757m; consolidated net profit was Rs 2,680m versus Rs 1,836m.

• Consolidated sales were Rs 21,228m versus Rs 17,751m; total income including other income was Rs 21,936m versus Rs 18,243m.

• Standalone domestic sales rose 33% to Rs 12,358m; exports rose 14% to Rs 6,050m.

• Standalone other income increased 10% to Rs 853m, mainly on higher treasury income and commissions.

Outlook and guidance

• Strategy remains focused on domestic share leadership, low-cost production, export growth and a strong workplace; zero-defect design and processes are priorities.

• A new Pune-area power generation facility is planned; investments target emissions-compliant products from 15 kVA to 2,000 kVA.

• Automotive plans include capacity and manufacturing capability for 300 HP-plus engines and high-pressure common rail engines for BS III/BS IV requirements.

• Management expects Indian power generation markets to grow 15–18% annually over the medium term and construction to grow 15–20% over the next few years.