Cummins will set up second generator plant

Pune-based engineering firm Cummins India will set up a new power generation facility at Phaltan in Maharashtra, said chairman and managing director Anant Talaulicar.

Cummins will spend about Rs 150 crore on the plant, which will manufacture generators with capacities of 200 kVA (kilovolt-ampere) and below.

“We are looking at a capacity of 40,000 units per annum by 2013,” Talaulicar said during an earnings call on Friday.

The investment will be done in three phases, the first of which will be completed by April. In Phase I, the plant will have a capacity of 10,000-15,000 units.

Cummins’ existing generator facility at Pirangut near Pune has a capacity to produce 15,000 units a year.

The company, a subsidiary of Indiana, US-based Cummins Inc, on Wednesday got its board’s approval for the plant, which will come up at the Cummins Megasite at Phaltan, 150 km from Pune. “We will export all the units produced here,” Talaulicar noted. He added that the generators will be targeted at individual customers, restaurants and retail outlets. Exports accounted for about 25-30% of Cummins’ overall sales between April and June.

Cummins will this fiscal also commission four other facilities including a parts distribution centre and reconditioning factory at the Megasite, which it began work on over two years back. The company has spent Rs 500-600 crore along with its joint venture partners on these since last fiscal. Cummins has outlined a capex of $300 million over the next five years.

For the quarter ended June 30, Cummins India’s sales rose an impressive 45% from the corresponding period last year to about Rs 910 crore, while net profit surged 56% to Rs 140 crore.

Cummins’ stock closed at an all-time high of Rs 672.05 per share on the BSE on Friday after touching Rs 681.05 during the day.