We expect robust revenues from retail customer segment: Cummins India

Cummins today was up about 7%. The company has plans to enter the retail customer market by smaller power generators. What kind of volumes will you be looking at there, what would be the cost to the company in setting the distribution chain up?

Yeah, it’s a new product for us and we have been planning to get into this line for a while. We are pretty strong in the high-end and heavy-duty mid range. This is more small businesses and had made immense sense for us to tap the segment. (Watch)

Just to give you a whiff of the product, this has been developed not for US customers; it has been developed for Indian customers and have been a worldwide launch simultaneously. So we expect to export as well. The product comes in three configuration and we expect this to give us a very robust avenues as we launch it.

You have been in talks with Volvo in terms of supplying some engine part. Can you give us more details on that?

I don’t think we like to share our discussions. We are in some form of discussions and I don’t think I would like to share details.

The company has cash of about 600 Crores and has also indicated a 100 Crores capex for 2010. What are the capex plans of the company and do you intend to keep the balance amount as cash or is there any other plan for it?

Well we look at what we need to do. Our immediate expansion plans will be at Fulton which is a mega site for Cummins that we have taken about 150 kms from Pune. By the end of this year, we have about four different projects coming on the mega site, three of them actually belong to Cummins India that listed entity and one to Tata Cummins where we replicated an engine plants which we already have in Jamshedpur.

Clearly some cash will be used here but other will remain on our balance sheet. Then we take a view of this as we move on. This year we have raised dividend substantially almost doubling it from last year and the first interim dividend was declared on that basis in the close of December.

Exports have been a little sluggish so far. What do you see the picture shaping up as now that rest of Asian exports have really picked up quite well since December? Do you see that as being an area of key growth for you at Cummins?

I would not say key growth, I would say we have seen the worst, the worst is over. Very clearly we have been improving on our export revenues in the last two quarters. We expect that movement to continue upwards. Essentially it depends on what is happening in the US and other Europe economies where our export mainly goes. Africa and Middle East are doing fairly well.

What about the kind of outsourcing orders from that the company is expecting in the near future?

That’s the high horsepower exports and bigraise exports that we are talking about and it’s not going to be at previous year levels because there has been a big fall off. In fact what you would call the cliff event in the US and that’s the market there. So as there market comes back, we would expect to come back as well. I don’t think I have a firm outlook view here.

What kind of growth can we expect for the next year? Volvo is certainly one option that you would be looking at. Are there any targets that you could share with us?

On Volvo no comments from my side but we expect the domestic growth to continue what’s firing us from the domestic side is really the infrastructure and we are doing very well on the infrastructural segments which is mining, marine, locomotives and all of our engines that we have for the earthmoving equipment, construction. So all of that I see as sustaining. I don’t think it will sustain in the same clip as you see in this quarter. B