Castrol India slips after net profit shrinks 32% in Q1

Castrol India lost 3.04% to Rs 118.20 after the company's net profit fell 32.3% to Rs 125.20 crore on 29.5% decline in net sales to Rs 688 crore in Q1 March 2020 over Q1 March 2019.

Profit before tax stood fell 41.1% year-on-year (YoY) to Rs 169.50 crore in Q1 CY20 from Rs 287.60 crore in Q1 CY19.

The company's profitability in the first quarter of the current year 2020 (CY20) was aided by lower total expenditure (down 25.7% YoY to Rs 515 crore) and lower current tax expense (down 56.6% YoY to Rs 45.10 crore). Depreciation costs, however, rose 37% to Rs 22.20 crore in Q1 CY20 over Q1 CY19.

Sandeep Sangwan, managing director, Castrol India, said: "The first quarter of 2020 has been unprecedented with an overall slowdown in the economy, liquidity crunch as well as the break-out of the global Covid-19 pandemic. As a result of which, the overall lubricant industry in the country has been hit by severe demand and supply disruptions.

We continue to work on numerous cost control actions, working capital management as well as efficiency programmes to drive margins and protect our finances. We renewed our long-term partnership with JCB, the largest off-road vehicle manufacturer in India.

Readying ourselves for a low carbon future, we entered into agreements for EV fluids with OEMs in India including MG Motors and Tata Motors, as well as to supply lubricants to various OEMs for their BS-VI compliant vehicles.

We continue to monitor the dynamic nature of the ongoing crisis. Our current strong liquidity position gives us confidence to be able to meet the near-term challenges."

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

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