Cummins India Ltd's Q1FY19 adjusted net profit rises 10.2% yoy to Rs183cr : In-line with Estimates

The company’s standalone revenue stood at Rs1,328cr, down 0.95% yoy

Aug 09, 2018 06:08 IST India Infoline Research Team

Cummins India Ltd Q1FY19

Standalone Results Q1FY19: (Rs. in cr)

Q1FY19 YoY (%)
Revenue 1,328 [1.0]
EBITDA 214.7 9.9
EBITDA Margin (%) 16.2 160
Net Profit (adjusted) 183 10.2
***EBITDA margin change is bps
Cummins India’s Q1FY19 numbers are in-line with estimates. Sales have decreased by 1% yoy to Rs1,328cr. EBITDA has increased by 9.9% yoy to Rs214.7cr during the quarter from Rs195.3cr in Q1FY18. EBITDA margin improved by ~160bps yoy to 16.2% in Q1FY19. Adjusted net profit (adjusted for exceptional gains in Q1FY18) grew by 10.2% yoy to Rs183cr.

• The flattish sales is a result of 7% yoy decline in domestic sales to ~Rs860cr given the strong base (pre-buy ahead of GST in Q1FY18). Exports on the other hand have grown reasonably well by 12% yoy to Rs441cr on account of recovery in different geographies (including Africa).

• In the domestic segment, Powergen sales declined 4% yoy to Rs360cr. Cummins expects powergen sales to recover to 7-8% yoy in FY19 led by infrastructure, manufacturing, data centres and retail demand.

• Industrial sales declined 9% yoy to Rs180cr due to subdued demand from compressors market. However, a healthy order book should enable double digit growth in Industrial sales in FY19 led by the rail and construction segments.

• Distribution sales declined by 8% yoy to Rs320cr as Cummins is monitoring receivables with a couple of customers.

• Total raw material cost has declined by 4% yoy owing to cost cutting measures and better product mix (higher exports).

• Other income increased by 19% yoy to Rs69.6cr owing to increase in rental income from India office campus.

• The company had exceptional gain of Rs56.1cr on sale of properties in Q1FY18. Adjusting the same for tax (assuming similar tax rate of 27.4%) as well, net profit is flat yoy.

Technical View:

Cummins India Ltd is currently trading at Rs. 699, up by 19.6 points or 2.88% from its previous closing of Rs. 679.40 on the BSE.
The scrip opened at Rs. 690.80 and has touched a high and low of Rs. 708 and Rs. 680.50 respectively. So far 7,99,556 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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