Reflecting the tough market conditions for the capital goods sector, Cummins India Ltd (CIL) has witnessed a 7 per cent fall in net sales and a 21 per cent decline in net profit in the third quarter of the current fiscal compared to the corresponding quarter last year.
Cummins India CMD Anant J. Talaulicar said that he did not see “any signs of improvement’’ in the capital goods markets though the company maintained its market share.
In the quarter ended December 31, 2013, the company posted net sales of ₹1,001 crore, which was 7 per cent down compared with ₹1,071 crore in the corresponding quarter last year.
Net profit-before-tax (excluding exceptional items) in Q3 of this year fell 21 per cent to ₹207 crore compared with ₹262 crore in the same quarter in 2012-13.
Commenting on the results, Talaulicar said that despite “very adverse market conditions, we maintained our margins compared to last year’’.
In fact, the margins have expanded compared to the preceding quarter “mainly due to our focus on improving cost efficiencies’’.
But he said: “We are not seeing any signs of improvement in the Indian capital goods market.’’
He said that the company however continued to “maintain market share leadership’’ and in spite of near term challenges, the long-term prospects “continue to look positive’’.
Advanced technologies, solutions
He said that the company was investing in advanced technologies and solutions which were of value to its customers and referred to the recent announcement of CPCBII emission compliant generator sets as an example and asserted that with the sort of investments Cummins India was making into its future, it would be well positioned to offer its customers with the “most dependable solutions’’.
Share price, interim dividend
But the results did not depress the share price which gained Rs 9.25 to trade at Rs 448.50 (share face value Rs 2) on the BSE.
Cummins board of directors also declared an interim dividend of Rs 5 per share for the financial year 2013-14 which will be paid on March 4.