Castrol Net Profit Up 67% At Rs 158 Cr

Lubricants manufacturer Castrol India Ltd has recorded a 67.3 per cent jump in net profit to Rs 158.16 crore in 1997. Earnings per share amounted to Rs 25.6 per share, according to the companys annual results, announced yesterday.

Castrol, Indias largest private sector lube company, has recommended a dividend of Rs 8 per share for 1997.

This is in addition to an interim dividend of Rs 4 paid earlier.

Riding on volume growth from its newly commissioned 70,000 tonnes plant at Silvassa in Gujarat, the company increased its turnover 11.6 per cent to Rs 905.57 crore.

Total expenditure rose to Rs 792.24 crore, against Rs 736.47 crore in 1996.

Other income remained flat at Rs 17.75 crore, while interest costs declined to Rs 6.09 crore from Rs 16.98 crore.

Depreciation rose slightly to Rs 6.80 crore while tax benefits cut taxation costs to Rs 47.5 crore against Rs 53.10 crore last year. Castrols gross profit rose 39.7 per cent to Rs 212.46 crore.

According to Mumbai-based analysts, The companys performance is in line with expectations. Castrol has benefited from the tax breaks due to the recent commissioning of its lube blending plant. Lower interest and decreased tax has further pushed up Castrols bottomline.

Castrol, which enjoys a share of more than 40 per cent in the retail market, is aggressively marketing its products.

The company has introduced economy packs for garages and workshops while offering medium-sized packs for other customers. Castrol has also been offering freebies with its products.

A Castrol press release said, The increased sales volume and turnover, in the face of an economic slowdown and increased competitive activity, has been achieved through a judicious mix of cost control, better product mix, operational efficiency and optimal use of resources.

Analysts, however, indicate that Castrol will face stiff competition from public sector oil companies which have started concentrating on the lube sector.