Cummins India hosted a conference call on Nov 8, 2024. In the conference call the company was represented by Shveta Arya, Managing Director and  A Patil, CFO.

Key takeaways of the call

Of the Q2FY25 standalone domestic sales of Rs 2008 crore (up 47%yoy) the PowerGen sales were Rs 896 crore(up 84%yoy, 12%qoq), Distribution were Rs 658 crore (up 20%yoy, 1%qoq), Industrial were Rs 406 crore (up 35%yoy, 9%qoq). Of exports revenue of Rs 440 crore (down 13%yoy), the HHP sales were Rs 200 crore (down 24%yoy, down 1%qoq) and LHP is Rs 198 crore (down 5%yoy, up28%qoq).

Of the domestic powergen revenue of Rs 896 crore for Q2FY25 the mix is HHP is Rs 452 crore, MHP is Rs 178 crore, LHP is Rs 199 crore crore and projects is Rs 68 crore. Similarly in case of Q2FY25 domestic Industrial the construction segment contribution is Rs 146 crore, Rail is Rs 105 crore, Mining is Rs 52 crore, compressor was Rs 58 crore balance are others.

The Company has a strong portfolio of CPCB IV+ emission norms-compliant products to meet customer demand across the entire product range. All its CPCB IV+ emission norms-compliant products   certified well ahead of the time.  Complete transition to CPCB IV+ emission became effective July 1, 2024 and with strong product portfolio meeting new norms the company is well-positioned to capitalize. 

CIL has launched its CPCBIV+ products last year.  The company is first to launch its full range and market supply chain. Now completion is launching their product range  and the company is watching the market place. Seen a 15-25% increase in pricing with transition to new emission norm.  CIL expects price discovery to get established over next 2 quarters as the customers have more options.   With more options for the clients the level of price will settle soon. The company expects clear picture on price over next 3-4 months and remain confident that its products are well accepted as it is competitively priced.   

Sales guidance for FY25 to overall company, it  expects to have  double digit growth.  The company maintained a revenue growth of two times (2x) of real GDP growth over the longer term with a positive margin bias.

The company is cautiously optimistic about the export demand recovery as the economic and geopolitical events have impacted the end markets. With its diversified portfolio of products, company remains optimistic about the recovery in exports demand.

PowerGen - The company with the transition to new emission norms remains cautiously optimistic about the demand outlook for the near term and optimistic about the long-term growth prospects.

CPCB IV+ are below 800kva range of powergen products.  Supply of gensets to DC are large and are  outside of CPCB 4 norms. Channel inventory levels for CPCBIV+ products are now adequate with no inventory of CPCB 2 engines under less than 800kVA.

Projects biz is installation of heavy powergen solutions at client sites such as Data Centres etc.  Large share of project business in genset business segment and because of mix change there is an impact in margin.   Project biz is part of regular business of the company and some quarter it will be higher and some quarter it will be lower.