Cummins India posts 23% rise in Q2 profit on lower costs

Cummins India

07/11/2023 14:42

BENGALURU, Nov 7 (Reuters) - Diesel and natural gas
engine maker Cummins India  CUMM.NS  reported a 23% rise in
second-quarter profit on Tuesday as lower expenses helped offset
slowing engine demand. 
    The Indian unit of U.S. truck engine maker Cummins  CMI.N 
reported a consolidated profit of 3.29 billion rupees ($39.52
million), up from 2.67 billion rupees last year.
    The U.S. company last week also posted a 64% rise in
September-quarter net profit at $656 million.
    Cummins India's total expenses fell 5.1% to 16.20 billion
rupees on lower cost of raw materials such as aluminium and
steel. 
    Income from operations marginally dipped 1.8% due to weaker
demand for its newly launched and more expensive power generator
sets, made to meet the revised emissions guidelines.
        The 
    new emission norms by the Central Pollution Control Board
came into effect from July 1 and target a near-90% reduction in
emissions of particulate matter and nitrogen oxides. 
        "There is expected to be some downside risk to the
demand of the products given pre-buy in the months leading to
the change," the company had said in its annual report in July.
  
    The new emission norms are applicable for generator sets
with power output up to 800 kilowatts (KW).
    All of Cummins' products under 800KW, which constitutes 80%
of its portfolio as per HDFC Securities, underwent significant
changes and costs 20%-25% higher.
    Rival Thermax  THMX.NS  reported a 45% jump in
second-quarter profit last week, helped by strong industrial
demand, while ABB India  ABB.NS  and Siemens  SIEM.NS  are yet
to report results.     

($1 = 83.2410 Indian rupees)

 (Reporting by Anuran Sadhu in Bengaluru; editing by Eileen
Soreng)
 ((Anuran.Sadhu@thomsonreuters.com; +91 8697274436;))