MOSL: CASTROL INDIA (Buy)-Volumes suffer-preparing for the uncertain times ahead
CASTROL INDIA: Volumes suffer; preparing for the uncertain times ahead
(CSTRL IN, Mkt Cap USD1.8b, CMP INR124, TP INR153, 23% Upside, Buy)
Net sales increased 2% YoY to INR10.4b (~7% miss) in 2QCY19. EBITDA was up 13% YoY at INR2.8b, while PAT grew 11% YoY (-1% QoQ) to INR1.8b (12% miss). Total expenditure of INR7.5b was flat YoY but increased 9% QoQ due to spending toward customer acquisition and distribution expansion.
- Volumes dragged by CV/industrial segments: Total volumes declined 3% YoY to 55.4m liters (1QCY19: 50.4m). Personal mobility continues to be the key driver, while the commercial vehicle and industrial segments exhibited a downtrend. PCMO accounted for ~45% of overall volumes, of which 2Ws contributed two thirds. 2Ws were also better in terms of the contribution to profits.
- Realization stood at INR187.7/liter in the quarter (v/s INR178.5 in 2QCY18 and INR193.7 in 1QCY19), supported by a better product mix and expansion of the customer base.
- Gross margin was in line with our estimate at INR101.1/lit, up from INR87.7 in 2QCY18 but lower than INR103.1 in 1QCY19.
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.