Ref: STEX/SECT/2022

November 10, 2022

The Relationship Manager,

National Stock Exchange of India Limited

BSE Limited,

Exchange Plaza, 5th Floor,

Phiroze Jeejeebhoy Towers

Plot No. C/1, G Block,

Dalal Street, Fort,

Bandra - Kurla Complex, Bandra (East),

Mumbai 400001

Mumbai 400 051

BSE Scrip Code: 500480

NSE Symbol: CUMMINSIND

Subject: Intimation of transcript of analyst conference call held on November 07, 2022

Dear Sir/ Madam,

With reference to our stock exchange intimation dated October 27, 2022 towards investor/ analyst/ Financial Institution conference call, we are enclosing for your records a copy of the transcript of the said conference call conducted by the Company on November 07, 2022.

Kindly take this intimation on your record.

Thanking you,

Yours faithfully,

For Cummins India Limited

VINAYA ABHIJIT JOSHI

Digitally signed by VINAYA ABHIJIT JOSHI Date: 2022.11.10 15:55:15 +05'30'

Vinaya A. Joshi

Company Secretary & Compliance Officer

Encl.: As above.

(This letter is digitally signed)

Cummins India Limited

Registered Office

Cummins India Office Campus

Tower A, 5th Floor, Survey No. 21, Balewadi

Pune 411 045 Maharashtra, India

Phone +91 20 67067000 Fax +91 20 67067015

cumminsindia.com

cil.investors@cummins.com

CIN : L29112PN1962PLC012276

"Cummins India Limited Q2 FY'23 and HI Earnings

Conference Call"

November 07, 2022

MANAGEMENT: MR. ASHWATH RAM - MANAGING DIRECTOR,

CUMMINS INDIA LIMITED.

MR. AJAY SHRIRAM PATIL - CHIEF FINANCIAL

OFFICER, CUMMINS INDIA LIMITED.

Page 1 of 18

Cummins India Limited

November 07, 2022

Moderator:Good morning ladies and gentlemen. Welcome to Cummins India Limited Q2 FY 2022-'23 Earnings Conference Call. We hope you are all keeping safe and healthy.

As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing '*' and then '0' on your touchtone telephone.

I now hand the conference over to Mr. Ashwath Ram - MD, Cummins India Limited. Thank you and over to you, Mr. Ram.

Ashwath Ram:Good morning ladies and gentlemen, I am Ashwath Ram, Managing Director of Cummins India Limited. Mr. Ajay Patil, our CFO is also on the call with me. Thank you all for joining us on this call today. I hope all of you had a great and safe festive holiday season.

We are happy to announce that CIL has achieved the highest quarterly revenue and profits due to strong demand across various market segments and geographies.

Financial Results Q2 FY'23

For the quarter ended September 30th, 2022 with respect to the same quarter last year our sales at Rs. 1,922 crores were higher by 14% compared to Rs. 1,689 crores recorded in the same quarter last year. Domestic sales at Rs. 1,391 crores were higher by 11%. Exports at Rs. 531 crores were higher by 21%. Profit before Tax and exceptional items at Rs. 336 crore is higher by 15% compared to Rs. 293 crores recorded in the same quarter last year.

For the quarter ended September 30th 2022 with respect to the last quarter our sales at Rs. 1,922 crores were higher by 16% compared to Rs. 1,657 crore recorded in the same quarter. Domestic sales at Rs. 1,391 crore were higher by 19%. Export at Rs. 531 crore higher by 9%. Profit before Tax and exceptional items at Rs. 336 crores were higher by 21% compared to Rs. 278 crores recorded in the last quarter.

Segment Wise Domestic Sales Break Ups for the quarter ended September 30th, 2022:

Power Generation domestic sales were Rs. 675 crores. 6% increase over last year and 36% increase over last quarter.

Distribution business sales were Rs. 446 crores, a 22% increase over last year and 7% increase over last quarter.

Industrial domestic business sales were Rs. 250 crores, a 10% increase over last year and 5% increase over last quarter.

Page 2 of 18

Cummins India Limited

November 07, 2022

Exports, high horsepower exports were Rs. 234 crores, 3% decrease over last year, 1% increase over last quarter.

Low horsepower exports were Rs. 242 crores, 49% increase over last year and 20% increase over last quarter.

With this I now open the session for questions. Thank you.

Moderator:Thank you very much. Ladies and gentlemen, we will now begin the question-and-answer session. This first question comes from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal: My first question is on gross margin. So, despite such strong performance we are still almost 300 to 400 basis points lower than our standard gross margin, so just wanted your view level of pricing, has it receded, are you still not able to absorb the commodity inflation? Or have you rolled back some price increases, because a large part of EBITDA margins is getting justified because of operating leverage, but you still are not able to get back to our historical levels of gross margin of 35% to 36%. Just your views on that, that's my first question.

Ashwath Ram:I think the main factor here is that commodities while they have started softening, we have still not caught up. So, we anticipate gross margin continuing to improve over subsequent quarters. We haven't rolled back any price increases. As a matter of fact, some more price corrections are on the way, which have been planned ahead of time. So, there is that lag effect of commodities, and we are catching up, it's going to continue to improve.

Parikshit Kandpal: Second question is on, you have been highlighting the supply chain issues as being impacting us to the extent of 10% to 15% of demand. So, given the strong growth momentum, robust revenue, so if you can just touch up on the operational side, what is the current capacity utilizations? And also, when do you think you will reach the optimal capacity utilization that will call for a CAPEX, if you can address this question?

Ashwath Ram:We continue to be constrained by the supply chain. I would say that the situation has not really improved very much since the previous quarter. It's been getting better. So, we are able to get more output out from the existing suppliers and try to draw down our strategic inventory, etc. But the problems we are facing on some of the critical electronics or some of those critical parts, especially in the higher horsepower nodes of our business, we continue to see those challenges. So, with that, our capacity is somewhere between, I would say 70% to 80% utilized somewhere in that range, depending on which nodes we are talking about, which products we are talking about.

And we are working there have been war rooms now going on for two years, that work is continuing. So, we do expect to see the situation gradually keep improving, but unfortunately,

Page 3 of 18

Cummins India Limited

November 07, 2022

we have no news which tells us that this problem is just going away right now. So, we are likely

to see continued similar challenges even moving forward.

Parikshit Kandpal:

What about the capacity expansion now, I mean because you said we are close between the range

of 70% to 80%, and we have seen other MNCs expanding in India, so given the strong demand,

both in local and export markets. So, when do you think is the right time for you to start looking

at the capacity augmentation?

Ashwath Ram:

We are looking at it. And based on the types of forecasts we have and the future demand, we

will take the right calls at the appropriate time, but it's not yet there. So, we still have plenty of

muscle to flex even at 70% to 80% utilization, lot more can be done with just manpower

balancing, etc. So, we still have lot more ability to sweat these very assets before we will need

capacity expansion.

Parikshit Kandpal:

The last question on this CPCB-4 Plus are you seeing any part of

(Inaudible

00:09:11) coming

in during the 2nd quarter, or was there any one-off like a data center kind of product getting

booked in this quarter? So, any one-offs and how do you read the second half the

(inaudible

00:09:25) happening on the CPCB front?

Ashwath Ram:

So, the good news is that all this time we have been talking about CPCB-4 Plus that is going to

be announced is likely to be announced all of that. So, there was a lot of worry that what happens

if it doesn't get lost, get notified on time. It's been notified now that GSR is out as of last week,

and so the timelines are frozen. And typically because there is such a major technology

transformation, there is a major cost impact likely for end customers. So, we do think there will

be a strong pre-buy sometime in the latter half of 2020 or the early half of 2023. And we are

planning and preparing for that.

So, it's a double challenge. One, as you can see, we are already supply chain constrained. And

then we are going to have to plan for a pre-buy and build inventory for that, and then plan out a

transition where everything fades away. So, it's quite a bit of tricky and a challenging situation.

But we are also optimistic that now there is clarity and things will move forward smoothly.

Parikshit Kandpal:

And any one-off during this quarter on data center order, I mean the numbers look quite robust

from the revenue point.

Ashwath Ram:

Yes, so those are, data center orders, you get in a lumpy manner, so if we had similar kinds of

orders last year, and we have orders this year as well. We were able to execute a few in this

quarter and there are many more in the pipeline. Data centers is one of those segments which is

going very well for us and is growing very well in the country. And we are likely to see more

demand coming out in the future.

Moderator:

Thank you. Our next question is from the line of Deepak Krishnan from Macquarie. Please go

ahead.

Page 4 of 18

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Cummins India Limited published this content on 10 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2022 11:47:06 UTC.