BENGALURU (Reuters) – Diesel and natural gas engine maker Cummins India reported a 23% rise in second-quarter profit on Tuesday as lower expenses helped offset slowing engine demand.
The Indian unit of U.S. truck engine maker Cummins reported a consolidated profit of 3.29 billion rupees ($39.52 million), up from 2.67 billion rupees last year.
The U.S. company last week also posted a 64% rise in September-quarter net profit at $656 million.
Cummins India’s total expenses fell 5.1% to 16.20 billion rupees on lower cost of raw materials such as aluminium and steel.
Income from operations marginally dipped 1.8% due to weaker demand for its newly launched and more expensive power generator sets, made to meet the revised emissions guidelines.
The new emission norms by the Central Pollution Control Board came into effect from July 1 and target a near-90% reduction in emissions of particulate matter and nitrogen oxides.
“There is expected to be some downside risk to the demand of the products given pre-buy in the months leading to the change,” the company had said in its annual report in July.
The new emission norms are applicable for generator sets with power output up to 800 kilowatts (KW).
All of Cummins’ products under 800KW, which constitutes 80% of its portfolio as per HDFC Securities, underwent significant changes and costs 20%-25% higher.
Rival Thermax reported a 45% jump in second-quarter profit last week, helped by strong industrial demand, while ABB India and Siemens are yet to report results.
($1 = 83.2410 Indian rupees)
(Reporting by Anuran Sadhu in Bengaluru; editing by Eileen Soreng)