Cummins India (500480) Q4 99/00 earnings summary

Executive summary

• FY1999-2000 was a record year: sales turnover reached Rs. 8,290 million, up 28% YoY, and net profit after tax was Rs. 933.08 million, up 25%.

• Strategy shifted from engine sales toward customized power solutions, combining equipment, financing, installation, operations, maintenance and services.

• Exports and after-sales services expanded, while product launches, new ventures and IT integration were positioned to support future growth.

Financial highlights

• Total income was Rs. 8,468.98 million versus Rs. 6,617.48 million; profit before tax was Rs. 1,291.71 million versus Rs. 1,069.36 million.

• Net profit after tax rose to Rs. 933.08 million from Rs. 747.91 million; EPS was Rs. 23.56 per Rs. 10 share.

• Export earnings reached Rs. 2,747.56 million versus Rs. 1,282.75 million; total exports were reported at Rs. 2,748 million, up 114% YoY.

• Cash generated from operations was Rs. 773.50 million; net operating cash flow was Rs. 365.72 million and year-end cash and equivalents were Rs. 95.36 million.

Outlook and guidance

• The stated 2005 ambition was recognition as a leading innovative, fast-growing engineering business with turnover of Rs. 3,000 crore.

• Services were expected to rise to 8–10% of revenues in the coming year, from 5.5% of combined revenues in FY1999-2000.

• Priorities included expanding power solutions, product range, exports and IT integration; the GIEA ERP rollout and closer OEM alignment were planned for the year ahead.

• CNG engines were expected to develop into a significant business; management also anticipated growth in the export market and a profit in Power Systems India’s next year of operation.