Cummins Sees Earnings Weakness Till Infrastructure Spending Strengthens
According to Cummins India CFO Rajiv Batra, it’s mainly the construction sector where things have completely slowed down.
Cummins India Ltd. expects weakness in its earnings to continue until infrastructure spending strengthens.
“Until projects approvals are restored, and infrastructure spending starts in key sectors like construction, there is likely to be an impact,” Rajiv Batra, chief financial officer and head of internal audit, government relations and facilities at the maker of engines and power generators, told BloombergQuint in an interview.
Emkay Global in a report said Cummins India missed the earnings estimates for the quarter ended September. Its revenue fell 12 percent year-on-year to Rs 1,310 crore due to a decline in domestic sales and exports. Adverse product mix and forex impact further weighed on the company’s Ebitda margins, dragging it down 520 basis points, the report said.
Batra said it’s mainly construction where things have completely slowed down. But project allocations from infrastructure projects by the government will positively impact the construction sector, among others, he said.
“We are seeing some green shoots but a couple of quarters from now, when the funds are actually received, then we’ll see the impact.”
Watch | CFO Rajiv Batra on Cummins India’s Q2 Results 2019-20