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Business

Cummins India sees many headwinds, says things unlikely to improve over next 2 quarters

Updated : August 09, 2019 10:39 AM IST

In addition to weak June quarter earnings, Cummins India has cut domestic as well as export growth guidance. The company also said that trade tensions and slowdown impacted exports and they do not expect a recovery for at least the next two quarters.

CFO Rajiv Batra said, "There are many headwinds, which are impacting the sectors in which we operate. One is liquidity, second is project approvals. We don’t think this will get sorted out at least for a quarter to a quarter and a half.”

“We have reduced our guidance. From our previous domestic sales guidance increase of 10-15 percent, we are saying 8-10 percent because given what is happening 5 percent moderation will happen,” he added.

“Based on what is happening in the world, economies, especially in the Middle East and Africa, have slowed down, some countries in Africa are struggling on currency,” Batra said.

“Our guidance has been impacted by the power generation sector. That has slowed down. In the industrial sector, for the past two quarters project approval has been slow and that is now beginning to impact,” he further mentioned.

In terms of revenues and margins, he said, “I would prefer to stay with the flat guidance. We are expecting margins to claw back because we would need time to assess the situation and take necessary actions. So towards the end of the year, you will see significant improvement.”

Pointers

-There Are Many Headwinds Across The Sectors We Operate In
-Don't See Things Improving Over The Next 2 Quarters
-Domestic Biz Facing Headwinds On Account Of Liquidity Crunch
-Domestic Business Facing Headwinds On Account Of Weak Investor Sentiment
-Exports Under Pressure Across Africa & West Asia-Power Gen Segment Facing The Maximum Slowdown

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