Shares of Cummins India, an engineering firm, rallied 10% to ₹1,618 apiece on Thursday after the company reported impressive Q3FY23 results.
The results showed a marked improvement in the company's performance compared to the same period last year. Cummins India reported its highest-ever quarterly consolidated net profit of ₹414 crore in the October-December quarter, compared to a net profit of ₹250 crore in the year-ago quarter.
The company is delivering steady growth in its net profit, quarter after quarter. In the first two quarters of the current fiscal year, it posted a net profit of ₹198 and ₹267 crore, respectively.
Cummins India also recorded its highest-ever revenue for the December quarter at ₹2,185 crore, a growth of 23.30 percent compared to ₹1,772 crore in Q3 FY22.
The company said the domestic sales were up 27 percent at ₹1,603 crore compared to the same quarter last year, while export sales stood at ₹541 crore during the reporting quarter.
The company's record quarterly revenue was aided by strong domestic and export revenue coupled with prudent cost management, resulting in record quarterly profit, said Ashwath Ram, Managing Director, Cummins India.
The operating profit during the quarter came in at ₹413 crore, an increase of 51.28% compared to ₹273 crore, while the EBITDA margin stood at 19%, an expansion of nearly 300 bps YoY and 400 bps QoQ.
In reaction to the strong Q3 show, company shares opened positively at ₹1,540 apiece as against the previous closing price of ₹1474.30 and gained further to mark a new all-time high of ₹1,618, up 10%.
The stock has been performing well ever since reaching its 52-week low of ₹904 apiece in March last year, and has gained 74% to date. In addition, it soared 445.75% from its March 2020 low of Rs. 296.45.
Cummins India is a leading manufacturer of diesel and natural gas engines. The company is engaged in the business of manufacturing, trading, and selling of engines and allied activities. It presently operates in three business segments: engines, power systems, and distribution.
In November last year, Cummins Inc. and Tata Motors joined hands to offer solutions in the hydrogen-powered commercial vehicle space. Under the pact, the two partners will collaborate on the design and development of low- and zero-emission propulsion technology solutions for commercial vehicles in India, including hydrogen-powered internal combustion engines, fuel cells, and battery electric vehicle systems.
22 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.