Cummins India posts higher Q3 profit on demand recovery

BENGALURU, Feb 7 (Reuters) - Cummins India reported a 20.6% rise in third-quarter profit on Wednesday, as demand for its engines and power generator sets recovered following a hit from new emissions norms.

The Indian unit of U.S. truck engine maker Cummins posted a consolidated profit after tax of 4.99 billion rupees ($60.2 million) for the quarter ended Dec. 31 from 4.14 billion rupees a year earlier.

Sales rose 16.8% to 25.10 billion rupees on the back of stable demand for its newly launched and more expensive power generator sets.

The company said in November that it was expecting demand for engines to remain steady for the rest of the year.

Cummins India's sales in previous quarters were partly hurt by emission norms that came into effect on July 1, 2023, which made its products 20-25% more expensive, according to analysts.

The norms target a near 90% reduction in emissions of particulate matter and nitrogen oxide and are applicable to generator sets with a power output of up to 800 kilowatts (KW), which constitute 80% of Cummins' products.

Total expenses in the reported quarter rose 13.2% to 20.48 billion rupees.

The company also declared a dividend of 18 rupees per share.

Cummins' shares closed flat at 2,400.20 rupees ahead of the results. They had risen over 42% in 2023.

($1 = 82.9510 Indian rupees) (Reporting by Anuran Sadhu in Bengaluru; Editing by Anil D'Silva)