Castrol Net Dips 8% Despite Turnover Spurt
Castrol India's net profit fell eight per cent for 1996 on a 24 per cent jump in turnover. Earnings per share, too, fell from Rs 16.6 to Rs 15.3.
The company announced a dividend of 55 per cent taking total dividend to 85 per cent for the year. The interim dividend was 30 per cent. The share price yesterday closed at Rs 428.5 a small rise from Monday's close of Rs 428.
After a board meeting in Mumbai yesterday, Castrol announced that 1996 turnover rose to Rs 888.25 crore from Rs 714.20 crore for 1995. Gross profits rose from Rs 123.67 crore to Rs 143.81 crore (before interest).
Castrol's performance was affected by a 53.57 per cent fall in other income, high taxes and rise in interest.
From Rs 37.31 crore in 1995, other income fell to Rs 16.72 crore. Interest costs rose to Rs 16 crore from Rs 11 crore, while the company paid high taxes of Rs 53.10 crore.
Despite the performance, Castrol said its volumes have grown more than the market and it has managed to increase market share. Chairman, S M Datta said market share for 1996 was 18 per cent against 17 per cent for 1995 and volume growth at 11 per cent has been faster than the market rate of four per cent.
"Profit fall is due to extra income in the previous year and write back of depreciation," he explained. Margins have fallen at both operating and net levels. From 18.9 per cent, operating margin has slid to 18.1 per cent, while net margins have fallen from 14.4 per cent to 10.6 per cent.
Castrol is the largest private sector lubricant player with a share of 18 per cent.