Unaudited Financial Results For The First Quarter Ended 31st March 2009

Release date: 27 April 2009

CASTROL INDIA NET UP 5%

In Rs. crores
	January - March 2009	January - March 2008	% increase
Net Sales	505.9	492.9	3
Profit Before Tax	117.2	117.8	-
Profit After Tax	76.3	72.8	5

Castrol India Limited today declared its unaudited results for the first quarter ended 31st March 2009. The results reflect a good performance, especially in context of the challenging economic environment.

Net Sales for the quarter under review were up by 3% to Rs. 506 crores compared Rs. 493 crores during the same period last year. Profit before tax was flat at Rs 117 crore whilst Profit After Tax was up 5% at Rs.76 crores compared to Rs.73 crores during the same period last year.

Commenting on the first quarter results, Mr. Kshatriya, Managing Director, said, “Considering the acutely adverse economic environment in January - March 2009, with slowdown across industries, the company’s financial results are satisfying, especially in view of the fact that Q1 2008 as a reference base was a record first Quarter. In spite of significantly reduced volumes, we maintained profits and improved cash flow. Volumes declined during the quarter because of reduced commercial transportation and manufacturing activity, key drivers for lubricant consumption. However, the unit margins improved with the benefit of lower material costs, better product mix and improved efficiencies in value chain. With aggressive cost action, the bottom line was protected. While our strategy is fit and robust for all seasons, considering difficult economic scenario for 2009, we are focusing on two key priorities to deliver in year performance: defend margins and attack inefficiencies. The company has introduced various margin retention and cost control initiatives which are already paying dividends. Our continued focus on the personal mobility (cars & two wheelers) segment is delivering good results. We will maintain our strategy of continuous improvement of our product portfolio, offering premium value propositions for discerning customers. We continue to create innovative and engaging customer communication and compelling propositions”.

During the Quarter, the company maintained momentum on strategic growth initiatives i.e. increasing the number of Bike points and micro distribution for bike oils. Drive on advanced car oils i.e. synthetics, was also enhanced. Castrol continued its focus on bringing the benefits of "synthetic" technology to the Indian lube consumer through its flagship brand CRB and CRB Turbo. The company also undertook two high impact, innovative promotional activities – Power1 Passion Hunt for passionate bikers and Golden Spanner promotion for car mechanics. Building on its cricket credentials, Castrol successfully launched an innovative Castrol Index website. In the Business customer space, the company continued to strengthen its existing relationships with key auto manufacturers. The company has joined hands with Tata Motors to co-engineer a special oil for its new Nano. Castrol oils will be used as first fill as well as service fill for all Nano cars. The company also strengthened its position in the new European car segment with a new partnership agreement with Volkswagen.

The company continues its efforts on promoting road safety and is leading the corporate sector in developing new standards of road safety for its contractors and employees. In recognition of this effort, the company was awarded the WIAA Road Safety Award for “outstanding efforts in promoting the cause of road safety.”

Outlook

Commenting on the future outlook, Mr. Kshatriya said, “Whilst there are immediate uncertainties due to general elections and unpredictability in monsoon, the company expects the economy to gain momentum as we exit the year. Whilst demand is showing some signs of revival and trade is correcting its inventory positions, with overall market under significant pressure, we might see weakness in full year volumes. However, with the strength of our brands, distinctly superior delivery of our products and strong customer relationships, we remain confident of growing our financial performance for the year. This belief is further strengthened by the unflinching commitment of our employees, our business partners and our loyal consumers.”