In Focus: Driving Ahead | Value Research Cummins India is reaping benefits of better product mix, cost reduction initiatives
Stock Focus

In Focus: Driving Ahead

Cummins India is reaping benefits of better product mix, cost reduction initiatives

Cummins India, part of Cummins Inc, the world's largest manufacturer of diesel engines, has pioneered diesel engine technology in India. Cummins India started operations in Pune in 1962 for meeting the diverse power requirement of the country. In India, the company manufactures engines of 60-2,700 horse power capacity. Apart from diesel engines, the company also makes engines that run on natural gas and dual-fuel technology. The company's engines find use in wide variety of applications like power generation, construction and mining, compressors, locomotives, marine operations, oilfields, fire pumps, cranes and the automotive sector. It also manufactures turbochargers. The company derives a major chunk of its revenues from the power sector.

The company also recently joined hands with Indian Institute of Science (IISc) for commercialisation of biomass gasification power generation systems. As part of the agreement with the institute, the company will develop a new range of generator sets which would run on IISc technology. Good results posted by the company for the second quarter of the current financial year show that Cummins India is reaping the benefits of better product mix and cost reduction initiatives.

The company is expected to have a revenue growth of around 25 per cent over the next two years. The company posted a net profit of Rs 62.7 crore for the quarter ended September 30, 2006, as compared to Rs 37.76 crore in the corresponding period last year. Total income surged from Rs 378.86 crore to Rs 486.91 crore during the period.

Other Categories