Castrol India gains after decent Q4 numbers

Castrol India rose 0.91% to Rs 299.90 at 9:34 IST on BSE after net profit rose 7.04% to Rs 126.20 crore on 7.80% increase in total income to Rs 836.60 crore in Q4 December 2013 over Q4 December 2012.

The result was announced after trading hours on Monday, 17 February 2014.

Meanwhile, the BSE Sensex was up 51.65 points, or 0.25%, to 20,515.71.

On BSE, so far 5,499 shares were traded in the counter, compared with an average volume of 26,867 shares in the past one quarter.

The stock hit a high of Rs 302 and a low of Rs 299 so far during the day. The stock hit a record high of Rs 371.45 on 4 June 2013. The stock hit a 52-week low of Rs 286 on 30 January 2014.

The stock had outperformed the market over the past one month till 17 February 2014, falling 0.13% compared with the Sensex's 2.85% fall. The scrip had, however, underperformed the market in past one quarter, sliding 0.47% as against Sensex's 0.32% rise.

The large-cap company has an equity capital of Rs 494.56 crore. Face value per share is Rs 10.

Castrol India's net profit rose 13.68% to Rs 508.60 crore on 2.20% increase in total income to Rs 3263.20 crore in the year ended December 2013 over the year ended December 2012.

Commenting on the full year results, Ravi Kirpalani - Managing Director, Castrol India said: "Despite the challenging economic environment, Castrol India recorded higher profit after tax for the full year 2013, through improved gross margin and effective cost management."

Mr. Kirpalani added: "The weak macro-economic environment, depreciating rupee, persistent high inflation, rising fuel prices and high interest rates, have impacted both demand and costs. New vehicles sales, except two-wheelers and tractors, registered a double digit decline - the worst performance in over a decade. Slowdown in infrastructure, building and construction segments, coupled with flat to declining Industrial production further impacted demand. Despite these challenges, the company delivered strong underlying profit growth, driven largely by our personal mobility business which includes passenger car and two-wheeler oils. The micro-marketing approach in passenger cars and the use of digital and social media were strong enablers in these segments. This was complemented by strong growth in our distribution network."

Mr. Kirpalani continued: "The Industrial business faced an even tougher environment with circa 20% demand shrinkage in the core manufacturing sector. Despite this, volumes were higher than last year, driven mainly through new customer acquisition, delivering enhanced value and production cost efficiencies."

In its outlook, Castrol India said the strong headwinds of 2013 are likely to continue into 2014. The first half is likely to remain both volatile and uncertain owing to the macro-economic weaknesses and upcoming national elections. The company's response is to build on the momentum that we have generated in 2013, especially a sharp focus on growing our personal mobility business and improving advocacy, availability and affordability. In the longer run, we continue to remain optimistic about the lubricant market and our business growth. The company is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.

Castrol India manufactures and markets a range of automotive and industrial lubricants. It markets its automotive lubricants under two brands - Castrol and BP. The company has leadership positions in most of the segments in which it operates including passenger car engine oils, 4-stroke oils and multigrade diesel engine oils. Castrol India has the largest manufacturing and marketing network amongst the lubricant companies in India. The company has three manufacturing plants, including a state-of-the-art plant in Silvassa. The company reaches its consumers through a distribution network of over 270 distributors, servicing over 91000 retail outlets.

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