The net profit for the June quarter stood at Rs 198 crore against Rs 247 crore in the same quarter in FY22. Revenue stood at Rs 1,696 crore in the quarter.
A change in revenue mix, increased commodity prices, and a lag in price pass-through impacted the company's margin for the first quarter. The margin was at 12.6 percent compared to 12.4 percent in the June quarter of FY22.
Talking to CNBC-TV18, Ajay Patil, chief financial officer at Cummins India, said that the company had taken multiple price hikes in 18 months. "We have tactically responded from a pricing standpoint, keeping in mind where the commodity inflation has been," he said.
Going strong on exports
Cummins reported a 58 percent year-on-year jump in exports. Patil said the company had seen fairly stable and steady demand from the end markets over the past few quarters.
"And the demand is fairly broad-based across all parts of the world. Within that, Asia Pacific continues to be fairly steady. What we are seeing is an uptick in demand from West Asia, Europe and Latin America," he said.
Patil added that Cummins was looking at clocking Rs 500 crore exports every quarter if the supply chain normalises. "We have maintained that run rate (Rs 400 crore) over the last three quarters. Can we go towards Rs 500 crore of exports a quarter? Obviously, all our actions are in those directions."
The stock was trading 1.76 percent up at Rs 1,261 at BSE at the time of writing.
Credit Suisse maintained an 'outperform' rating on shares of Cummins India with a target price of Rs 1,475 per share, up from the previous target of Rs 1,150 per share. The brokerage house said that the stock continues to look attractive.
Jefferies raised the target price on the shares of Cummins India to Rs 970 per share, up from the previous target of Rs 850 per share. The brokerage house raised the earnings per share estimates for the financial year 24-25 by 14 percent.
First Published: Aug 12, 2022 12:28 PM IST
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