Cummins India share price gained 6% intra day despite the firm reporting a 65 per cent fall in profit impacted by the coronavirus pandemic. The share rose after Cummins India surprised Dalal Street with EBITDA outperformance despite barely a month of operations/shipments in Q1FY21. EBITDA for the firm stood at Rs 2.9 crore in Q1 of current fiscal.
Positive management commentary also buoyed sentiment around the stock. In a contrast to the last few quarters, management sounded more optimistic on a sequential pickup, although a gradual one.
"It highlighted de-risking of the railway portfolio, and a cyclical pickup in construction, compressors, mining, marine engines portfolio, and robustly positioned global exports model, " a report by Edelweiss Research said.
Following the Q1 earnings, share price of Cummins India rose 5.99% intra day to Rs 448 crore against the previous close of Rs 422.90 on BSE.
Later, the stock closed 3.25% higher at Rs 436.65. The share has gained 3.2% in the last 2 days. It stands higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.
The share lost 26.15% during last one year and has fallen 20.63% since the beginning of this year.
Total 0.92 lakh shares changed hands amounting to turnover of Rs 3.97 crore. Market cap of the firm rose to Rs 12,103 crore.
The firm reported a consolidated profit after tax (PAT) at Rs 53.02 crore in the first quarter ended June 30 against PAT of Rs 152.56 crore in the same period last fiscal. Consolidated sales from operations during the quarter under review stood at Rs 488.74 crore compared with Rs 1,325.11 crore in the year-ago period.
Domestic sales in the first quarter stood at Rs 358 crore, down 64 per cent from Rs 990 crore in the same quarter last year.
Cummins India is a manufacturer of diesel and natural gas engines, generator sets and related services. The company operates through two segments: Engines and lubes. Its three businesses include engine business, power systems business and distribution business.