Cummins India Q2 net profit jumps 23% to Rs 329 crore; stock rises 4%

Shares of Cummins India jumped nearly 4 percent in trade on November 8 as the diesel engine company manufacturer reported a 23 percent spike in Q2 net profits. At 10:51 am the Cummins India stock was trading at Rs 1757.33 on NSE.

Diesel and natural gas engine maker Cummins India Ltd posted a 23 percent rise in its second-quarter consolidated profit after tax on November 7, supported by robust demand in domestic and international markets.

The company reported a consolidated profit after tax (PAT) of Rs 329.09 crore in the quarter ended September 30, 2023, compared to Rs 267.31 crore in the year-ago period. Income from operations fell 1.8 percent to Rs 1,893 crore.

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Management view

The quarter ended September 2023 marks the third quarter in a row when Cummins India has been able to take advantage of the uptick in demand created by growth in private and public capital expenditure along with an easing of execution issues to post strong revenues.

Last quarter, the management said that the company was well-positioned to tackle any challenges with its strong balance sheet and prudent investments in technology.

The management’s remarks came at a time when the Central Pollution Control Board (CPCB) announced that after December 31, 2023, the sale of CPCB II generators will be prohibited and only the sale of CPCB IV+ norms generators will be allowed.

However, the CPCB has now revised the deadline for the sale of CPCB II generators and will now allow the sale of these generators till June 30, 2024, with certain conditions.

Also Read: Cummins India Q2 results: Net profit jumps 23% to Rs 329 crore

Cummins India management, at the end of Q1 2023-24, said it is now fully prepared to meet the demand despite uncertainty in the next few quarters.

Market experts have said that the switch to new emission norms may hit the topline of generator makers as geo-political and supply chain conditions remain unpredictable and getting new motors to meet CPCB IV+ norms will be difficult.

The company appointed Jennifer Bush as the Chairperson of the Board with effect from November 07, 2023. Bush currently serves as the Non-executive and Non-Independent Director of the company.

Also Read: Delhi air back in ‘severe’ category: Anand Vihar ‘hazardous’, Greater Noida ‘most polluted’

Cummins is engaged in manufacturing engines for power generation, industrial and automotive sectors, reported an uptick in demand for its diesel engines, benefitting from strong vehicle sales by automotive companies as COVID-related disruptions and chip shortages eased.

Cummins India stock call: Check brokerage views, target prices

Brokerage firm Prabhudas Lilladher has recommended a ‘hold’ rating on Cummins India stock with a target price of Rs 1,788 in a recently released report.

Cummins India stock performance

Cummins India stock has given a return of 5.18 percent over the last six months. The benchmark Nifty50 index has given a return of 6.28 percent over the same duration.

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