Cummins India (500480) Q4 97/98 earnings summary

Executive summary

• FY98 sales turnover was Rs. 7.43bn versus Rs. 8.00bn; profit after tax was Rs. 822.765m, while export earnings rose 16% YoY to Rs. 1.46bn.

• Cost-control programs helped limit the profitability impact of weaker domestic and international demand; sluggish demand continued into FY99.

Financial highlights

• Profit before tax was Rs. 1,151.675m versus Rs. 1,251.588m; reported net profit after tax was Rs. 822.765m versus Rs. 800.382m before tax on proposed dividend.

• Net sales were Rs. 7,405.779m versus Rs. 7,965.490m; sales of products and other income totaled Rs. 7,547.240m versus Rs. 8,112.733m.

• Total assets were Rs. 3,957.998m; shareholders’ funds were Rs. 3,608.899m, and secured plus unsecured loans totaled Rs. 349.099m at March 31, 1998.

• Export earnings reached Rs. 1,467.975m versus Rs. 1,264.594m; exports included a record 1,768 engines.

Outlook and guidance

• Demand weakness linked to the Asian downturn continued into FY99; the outlook cited an economic slowdown in domestic and international markets.

• Two high-horsepower Quantum engine versions, extending the range to 2,700 hp, were planned for Indian introduction during calendar 1998; a 6BT-powered genset was planned for the below-100-KVA market.

• Product strategy targeted the 50-KVA to 1.5-MW genset range, alongside fuel-efficient products meeting future emissions requirements.