Cummins affirms mid single digit growth outlook in export market
Despite some softening in the Europe and Latin America business, Cummins is optimistic about its domestic prospects and aims to achieve impressive double-digit growth.
Cummins India, a manufacturer of engines and related parts, announced a significant increase of 58.6 percent year-on-year in standalone net profit, amounting to Rs 315.7 crore, for the first quarter ending on June 30, 2023.
Despite some softening in the Europe and Latin America business, Cummins is optimistic about its domestic prospects and aims to achieve impressive double-digit growth. To counterbalance the softness in export demand, Cummins India is taking proactive measures by expanding its product portfolio and diversifying revenue streams.
In the same quarter of the previous year, the company had reported a net profit of Rs 199 crore, as per their regulatory filing. The predictions by CNBC-TV18 Polls had anticipated a profit of Rs 291 crore for the reviewed quarter.
In an interview with CNBC-TV18 Ashwath Ram, managing director of Cummins India discussed the company's growth prospects and strategies in the context of global economic trends. Despite facing challenges in some international markets, Cummins remains optimistic about its domestic growth and is taking proactive measures to navigate the uncertainties.
Ram expressed confidence in Cummins India's potential to achieve robust growth, even in the face of the gross domestic product (GDP) growth rate. He stated that the company aims to outpace the GDP growth by expanding at an impressive rate.
“We are guiding to grow better than 2x of GDP which means if GDP is 6 percent we will grow better than 12 percent,” said Ram.
While Cummins India remains bullish about its domestic growth prospects, it acknowledges some softening in its Europe and Latin America business segments. Economic fluctuations and changing market dynamics in these regions have presented challenges for the company's export-oriented operations.
Therefore, to offset the impact of reduced export demand in certain regions, Cummins has implemented a proactive strategy of increasing its product offerings. By pushing out more products, the company aims to diversify its revenue streams and tap into new markets to mitigate the effects of softening demand in specific regions.
Despite the challenges, Cummins is committed to its growth plans in the export market. The company's management maintains a growth guidance target in the mid-single-digit range.
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