Engines and related parts maker Cummins India has reported more than three-fold increase in its standalone profit after tax (PAT) at Rs 66.76 crore in three months to June, driven by higher domestic and exports sales.
The Pune-based company had posted a standalone PAT of Rs 17.89 crore in the June quarter of FY21, according to a regulatory filing.
Revenue from operations spiked 41 per cent to Rs 1,167.3 crore during the quarter under review as compared to Rs 484.06 in Q1FY21.
Cummins India, in a late evening release on Wednesday, said “our domestic markets for the quarter continued to show promise propelled by the government's push on infrastructure, pent-up demand, and economic recovery across multiple segments.
“In our export market, we see demand revival in quite a few regions as countries recover based on an increased vaccination pace and an abating infection trend.”
Domestic sales surged 140 per cent to Rs 859 crore compared to the same quarter last year while the exports sales grew 144 per cent to Rs 308 crore as compared to the same quarter last year, Cummins India said.
The company also said that imported parts, especially electronics and semiconductors, continue to have a long lead time and it is taking proactive steps to manage inventory levels of such components.
“During the quarter, India experienced a rapid spread of the second wave of COVID-19, which resulted in a significant rise in infection and mortality. Various state and local governments imposed severe restrictions to control the spread of the virus.
“The government prioritized oxygen supply for healthcare purposes. The supply of parts was severely disrupted during this period, leading to inefficiencies in plant operations that impacted shipments during the quarter,” said Ashwath Ram, Managing Director, Cummins India Limited.
Customer and supplier factory operations were also disrupted, he said, adding, by early June, the supply chain started to recover.
“As of date, the supply chain is slowly returning to the expected level of operations. The company took proactive actions to ensure optimal utilisation of plant operations to ensure supply commitments to customers”, Ram said.
Imported parts, especially electronics and semiconductors, continue to have a long lead time; the company is taking proactive steps to manage inventory levels of such components, he added.
As it operate through these trying times, Cummins India priority continues to be the safety and well-being of its employees, supporting the communities, serving customers, staying on course with the product development initiatives, prudently managing cost, and conserving cash, the company said.
The company continues to take steps to introduce newer and more efficient technologies in the market and introduced several new products in power generation, industrial, and distribution segments during the previous quarter to continue to provide world-class products and technologies to domestic and export customers, it said.
On the outlook, Cummins said it is hopeful of sequential recovery in economic activities driven by factors such as the pace of vaccination around the country, stabilizing supply chain that is ramping up, increase in government and private capex cycle besides recovery in broader consumption across various market segments.
“However, market conditions remain uncertain, and the visibility of complete end-market recovery is somewhat limited, mainly due to anticipation of the third wave of COVID-19. Therefore, the company is not providing full-year revenue guidance for FY 2022,” Cummins India said.
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