Castrol India Q2 results: Net profit rises 5% to ₹244 cr on higher demand

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Castrol India reported a 5.1 per cent rise in second-quarter profit on Tuesday, fuelled by steady demand for its automobile and industrial lubrication products.

The engine oil and industrial lubricants maker, majority-owned by BP, posted a profit after tax of ₹244 crore ($27.8 million) for the quarter ended June 30, up from ₹232 crore a year ago.

Revenue from operations grew 7.1 per cent to ₹1,497 crore, while total expenses rose 6.6 per cent, driven by a 3.2 per cent increase in raw material costs.

India's retail vehicle sales rose nearly 5 per cent year-on-year during in the quarter, lifting demand for companies like Castrol, which generates roughly 80 per cent of its revenue from the auto sector.

Two-wheeler sales were up 5.02 per cent, while passenger vehicles and commercial vehicle sales grew by about 3 per cent and 1 per cent, respectively.

Castrol India supplies lubricants to major auto manufacturers in the country, including Maruti Suzuki and Hero MotoCorp.

In its latest annual report, the company detailed plans to expand its geographic reach by broadening its product portfolio, enhancing its workshop network and investing in premium lubricant brands.

"Industrial is a long-term growth area for us, and we've seen encouraging traction in the first half," said Managing Director Kedar Lele in a statement.

Shares of the company are up 1.6 per cent higher after results were reported, having gained 9.3 per cent in the reported quarter.

In comparison, shares of smaller peer Gulf Oil Lubricants India jumped 10.2 per cent in the same period.