Cummins India's recent range-bound spell dissipated on Thursday as the company notched up a net profit growth of 56.8%.
The scrip of the diesel engines making multinational company spurted 6.8% to Rs 51.05 on BSE in afternoon trades. It hit a high of Rs 51.65. Around 94,000 Cummins shares were exchanged on the counter on BSE by mid-afternoon trades.
The scrip surged soon after the company's results trickled in during early afternoon trades. The scrip was range bound on the bourses over the last few weeks, moving in a band of Rs 46-51, close to its 52-week low of Rs 45.
For Q3 ended 31 December 2002, CIL has announced a 56.8% rise in net profit to Rs 24.49 crore compared to Rs 15.61 crore in the corresponding period of the previous year. Total income surged 37.6% to Rs 241.66 crore (Rs 2.41 billion) from Rs 175.59 crore (Rs 1.75 billion).
However, a part of the surge in net profit is due to the substantial rise in other income. Besides, Q3 results are not comparable due to the merger effect. Power Systems India Ltd and Cummins Power Solutions Ltd, the erstwhile wholly owned subsidiaries of the Company were merged into Cummins India on 24 January 2003 with retrospective effect from 1 April 2002. Thus, while the Q3 ended 31 December 2002 results include the results of the merged entity, the Q3 December 2001 results do not include the results of the two merged subsidiaries .
Other income has surged sharply to Rs 16.21 crore in Q3 December 2002 from Rs 8.80 crore in Q3 December 2001. According to footnotes to the results, other income for nine months ended December 2002 includes interim dividend received from the company's subsidiary, Cummins Diesel Sales and Service (India), amounting to Rs 10.20 crore.
CIL has warned that the sluggish trend in exports will continue for the next two quarters due to stagnant global demand.
Cummins India manufactures diesel engines in the 200- 2000 hp range and filtration equipments. The diesel engines manufactured by the company have applications covering a wide range of market segments such as power generation, construction and mining, oil fields, marine, locomotive and automotive. The company derives a major chunk of its revenues from the power sector. CIL also manufactures turbochargers in collaboration with Holset Engineering, UK, and flame-proof diesel engines (used in hazardous industries) in collaboration with Pyrobahn, UK.
Cummins India Ltd was incorporated in 1962 as a JV with Cummins Engine Company, US, to manufacture internal combustion diesel engines. In the year 1996-97, Cummins Engine US increased its stake from 50% to 51% and the name of the company was changed to Cummins India.
CIL's erstwhile subsidiary Cummins Infotech Limited was merged with KPIT Infosystems on 10 January 2003 with retrospective effect from 1 January 2002.
BSE Code: 50480