Cummins
India hosted a conference call on May 30, 2024. In the conference call the
company was represented by Ashwath Ram, Managing Director and Ajay Patil, CFO.
Key
takeaways of the call
The
company recorded another year of record revenue and profit, driven by strong
demand across segments from the domestic market while export market demand was
soft. Standalone sales for Q4FY24 was up
20% to Rs 2269 crore [Domestic up 38% to Rs 1925 crore; Exports down 30% to Rs
344 crore] and for FY24 20% to Rs 8816 crore [Domestic up 28% to Rs 7143 crore;
Exports down 18% to Rs 1673 crore].
Sales Mix
|
Q4FY24 Sales In Rs Crore
|
YoY Var (%)
|
QoQ Var (%)
|
|
FY24 Sales In Rs Crore
|
YoY Var (%)
|
Domestic Sales
|
|
|
|
|
|
|
Industrial
|
348
|
60
|
-16
|
|
1296
|
24
|
Power Gen (PG)
|
943
|
40
|
-12
|
|
3335
|
32
|
Distribution
|
604
|
25
|
-9
|
|
2348
|
25
|
Exports
|
|
|
|
|
|
|
High HP
|
171
|
-17
|
25
|
|
817
|
-9
|
Low HP
|
142
|
-42
|
-3
|
|
699
|
-27
|
Powergen
Market: CPCBII products can be sold
until June 30, 2024. Consequentially, the market will see a demand shift to
CPCB IV+ emission norms-compliant products effective July 1, 2024. The Company launched the CPCB IV+ range of
products, which were very well received by customers. The company has a strong portfolio of CPCB IV+
emission norms-compliant products to meet customer demand across the entire
product range. Don’t expect pre-buy benefit has happened last 3 quarters and
does not expected much in Q1FY25.
The
investment in infrastructure (Public and Private) and broader economic growth
continue to drive profitable growth for the company. Internationally,
geopolitical risks and conflicts continue to pose uncertainty about global
trade and supply chain disruptions.
Exports
might see an impact in the near term due to global economic uncertainties. The
company closely monitors the results of geopolitical events unfolding in
different parts of the world and their impact on global demand and supply
chains.
Continue
to expect double digit growth in FY25.
Better
margin in Q4FY24 is due combination of various things including better sales mix, able to hold on some of
commodity gains, better control on costs. Apart from this there were some one
off to the tune of little over Rs 60 crore on account of management cross
charges as well as advantages of rates and taxes.
Overall
volume growth in FY24 is about 30%. Seeing
across the board demand growth for powergen business.
Construction
that is lagging for quite some period has bounced back. Similarly compressor
have also bounced back.
The
company continues to have a strong balance sheet and liquidity and is
well-positioned to support its operations and growth plans.
Also, the company has a diversified portfolio
of products and is striving for a recovery in exports. The company has a
trusted brand, incredible product range, access to cutting-edge technology,
valued stakeholder relationships, world-class manufacturing capabilities,
best-inclass talent, and a customer-centric service organization with an
extensive distribution and service network throughout the country and
neighboring regions. Data centre segment is close to account for about 10% of powergen business of the company and continue to see strong traction.
|