Castrol India Q4 PAT decline 31% YoY to Rs 188 cr

Castrol India reported 30.8% drop in net profit to Rs 187.70 crore on a 7.6% fall in net sales to Rs 935.20 crore in Q4 December 2020 over Q4 December 2019.

Profit before tax in Q4 December 2020 stood at Rs 249.80 crore, down by 26.3% from Rs 338.80 crore in Q4 December 2019. Current tax expense during the quarter declined by 11.6% year-on-year (YoY) to Rs 61.80 crore.

The company's net profit declined by 29.6% to Rs 582.9 crore on a 22.7% fall in net sales to Rs 2,996.9 crore in the year ended in December 2020 as compared to the year ended in December 2019.

Sandeep Sangwan, managing director, Castrol India, said: Castrol India Limited delivered a resilient financial performance for FY 2020 in a difficult year marked by the pandemic and ensuing external challenges.

2020 has been a story of two halves. While we continued with our priorities through the year, keeping safety and wellbeing of our people and supporting communities we operate in at the fore, we gained good momentum in the second half with the partial revival of demand. In 2H 2020, revenue improved by 54% at Rs 1,818 crore while profit from operations was 122% higher at Rs 501 crore versus 1H 2020.

In 4Q 2020, we continued to invest in our key brands with a significant increase in our marketing and advertising spends year-on-year (Rs 65 crore in 4Q 2020 versus Rs 11 crore in 4Q 2019), which helped in achieving a top-line growth of 6% versus 3Q 2020. We expect the positive impact of this investment to continue going forward.

We have also taken actions to prepare the business for growth in the future including corrective pricing actions for our commercial vehicles portfolio which has yielded double digit volume growth in the last quarter as well as inventory reduction for distributors to help improve their working capital.

We continued to invest in digital technology and efficiency programmes leading to robust working capital management and judicious cost management thus generating healthy cash flow from operations for FY 2020 of Rs 893 crore which is 1.5 times of Profit After Tax."

Castrol India manufactures and markets automotive and industrial lubricants and specialty products. The company's products include lubricating oils, greases and brake fluids.

The scrip rose 1.98% to Rs 129.05. It traded in the range of 128.05 and 134.20 so far during the day.

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