Castrol India

Castrol India held a conference call on 04 February 2025 to discuss the results for the quarter ended December 2024 and way forward. Mr. Kedar Lele, Managing Director and Mr. Deepesh Baxi, Chief Financial Officer and Whole time Director of the company addressed the call.

Highlights of the Concall

• The company registered revenue from operations of Rs1354 crore in Q4CY24, achieving a growth of 7% over Rs 1264 crore in Q4CY23. Profit Before Tax for stood at Rs 371 crore, marking a gain of 14% from Rs 324 crore in Q4CY23. The Profit After Tax for stood at Rs 271 crore, registering a growth of 12% from Rs 242 crore in Q4CY23.

• Sales volume stood at around 59 million litres, during the quarter. During the year, the same was 234 million litres.

• Volume mix during the quarter was- 45% from personal mobility, 40% from the commercial vehicle (CV) segment and the remaining from the industrial segment.

• CV segment grew by double-digit in CY24 in terms of volumes, while both industrial and personal mobility grew by single digits. Additionally, rural markets have grown by strong double-digits.

• The company has taken price hikes in certain products during January 2025

• Business-to-business (B2B) segment of the company witnessed double-digit growth, performing better than the B2C (business-to-consumer) segment which grew by single digits during the year.

• Raw material prices have been lower during Q4CY24 compared to previous quarter in per litre basis as they receive rebates on the volumes purchased every 4th quarter.

• In terms of raw material costing, around 60%-70% is towards base oil while 10%-15% is towards additives and 5%-10% towards packaging and the remaining towards others.

• The positive correlation between base oil prices (its key raw material) and crude oil prices have de-coupled since the past few quarters. Raw materials prices have remained flat during CY24 and there were no significant movements in the base oil prices. Base oil prices during the year on a per unit basis were US $1,000 while crude oil has hovered in the ranges of US $75-$80 per barrel.

• Advertisement expense & sales promotion was 8% of revenue, during the quarter. The company expect to continue spend in a similar manner, going ahead.

• Castrol EDGE continued to set high standards for lubricants in high-performance cars across SUVs, and hybrids, while TURBOMAX+ is delivering improved performance for India's trucking fleet. Additionally, for their industrial partners, they advanced rust protection through customised solutions.

• The company expanded its reach into rural Bharat, enhancing product availability to around 36,000 workshops & stores deep in India. The total store footprint across the country as of CY24 was 1,43,000 outlets.

• The company strengthened its after-market presence and expanded footprint to over 10,000 multi-brand passenger car workshops and 29,500 independent bike workshops.

• The company expects cooling fluid market in India would grow by around 20% going forward.

• The company expects to maintain EBITDA margin in the range of 22%-25% for CY25 and beyond. The margin would increase due to enhanced brand portfolio mix and increased volumes.

• The company witnessed healthy momentum in the personal mobility segment and expects the same to ramp up significantly in CY25.

• The company aim is to grow above the average industry volume growth levels which typically grow by 4%-5% annually.

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