MOSL: CASTROL INDIA (Buy)-EBITDA beat led by higher volumes and realization
​Castrol India: EBITDA beat led by higher volumes and realization
(CSTRL IN, Mkt Cap USD2.9b, CMP INR394, TP INR467, 18% Upside, Buy)
- CSTRL’s 3QCY17 revenue grew 13% YoY (declined 1% QoQ) to INR8.6b (our estimate: INR8.4b), driven by (a) higher volumes at 49.1m liters (our estimate: 48.5m liters; +8% YoY, -3% QoQ), and (b) better realizations at INR175/liter (our estimate: INR173/liter; +5% YoY, +3% QoQ).
- Reported EBITDA of INR2.5b (+19% YoY, +21% QoQ) was significantly above our estimate of INR2.2b, benefited by sequentially lower raw material cost. EBITDA margin was 29.4% in 3QCY17 v/s 24.1% in 2QCY17 and 32.5% in 3QCY16.
- PAT grew 27% YoY and 29% QoQ to INR1.8b (our estimate: INR1.5b), further aided by higher other income at INR333m (our estimate: INR212m; +115% YoY, +115% QoQ).
- Volumes up 7.5% YoY: CSTRL’s total volumes grew 7.5% YoY, led by double-digit volume growth in PCMO segment (~45% volume share) and recovery in CVO segment (~40% volume share).
- Management has recommended issue of bonus shares by capitalization of free reserves in the ratio of 1:1.
Castrol India is a manufacturer, distributor and marketer of lubricating oils, greases and related services to automotive, industrial, marine, aviation, oil exploration and production customers across the world. For automotive lubrication (including motorcycles 2-stroke and 4-stroke engines, car petrol and diesel engines), Co.'s products include a range of manual and automatic transmission fluids, chain lubricants and waxes, coolants, suspension fluids, brake fluids, greases, cleaners and maintenance products. Co. also produces products for agricultural machinery, plant, general industry and marine engineering uses.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.