Castrol India announces first half results

23 August 2017
Q2 April - June 2017
Q2 April - June 2016
Q2 % Inc/ (Dec)
1H January - June 2017
1H January - June 2016
1H % Inc/ (Dec)
Net Sales / Income from Operations
Q2 April - June 2017
1007.7
Q2 April - June 2016
1115.1
Q2 % Inc/ (Dec)
-10%
1H January - June 2017
2019.8
1H January - June 2016
2096.7
1H % Inc/ (Dec)
-4%
Profit Before Tax
Q2 April - June 2017
213.1
Q2 April - June 2016
319.0
Q2 % Inc/ (Dec)
-33%
1H January - June 2017
482.3
1H January - June 2016
583.9
1H % Inc/ (Dec)
-17%
Profit After Tax
Q2 April - June 2017
137.9
Q2 April - June 2016
206.9
Q2 % Inc/ (Dec)
-33%
1H January - June 2017
316.9
1H January - June 2016
379.3
1H % Inc/ (Dec)
-16%
Castrol India Limited today announced its results for the first half (January-June) and second quarter (April – June) of 2017. 

Profit before tax during the half year under review was down by 17% at Rs.482.2 crores whilst Profit after Tax was down by 16% at Rs.316.8 crores as compared to the same period last year, driven largely by lower volumes due to impact of GST transition and lingering effect of demonetization.

The Board of Directors of the Company has declared an Interim Dividend of Rs. 4.50 per equity share of Rs.5.00 each, payable to those shareholders whose names appear on the Register of Members at the close of business hours on 6 September 2017 (Record date). The said Interim Dividend would be paid on or before 22 September 2017.

Commenting on the results, Omer Dormen, Managing Director, Castrol India Limited, said: “The external environment during the first half of the year has been extremely challenging with the lingering effect of demonetization particularly impacting commercial vehicle oil volume, transition to the GST era and sudden unexpected increase in base oil prices due to a major supply/demand imbalance in the Asia region, all impacting the company’s performance, especially during the second quarter of the year. Despite these strong headwinds, we delivered volume growth in the personal mobility segment, power brands and industrial segment and retained our overall market shares. 

“Whilst we are confident about the long term benefits of GST, the uncertainty around its implementation severely impacted the market in the short term especially in June. We reflected the entire GST rate benefits in our consumer prices from 1 July and furthermore, supported our distributors and customers in the month of June for a smooth transition. We continued focusing on doing the right things with a long term vision to create enduring value while we provided full support to our trade partners taking into account all the costs relating to GST transition in June itself.”

During the first half of the year, we continued investing in our key strategic drivers, further strengthening our lead brand Castrol Activ through TV advertising and digital activation. We also ran an innovative mobile campaign in agri segment for Castrol CRB Plus, reaching out to over six million tractor owners. Our focus on increasing distribution reach continued with significant success in customer acquisition and expansion.”
    
The company has recently renewed a distribution agreement with Essar Oils for sale of Castrol lubricants through Essar’s retail network. The company also made some significant inroads in the industrial lubricants segment with its new product Castrol Hysol XBB.

As part of its commitment to deliver technically superior products to customers and consumers, the company has set up a new state-of-the-art technology laboratory within its Silvassa facility. This laboratory will be used to test products and provide technology insights as well as expert support to our customers. The laboratory is currently in the commissioning phase and will be fully operational in the third quarter.

Outlook

Despite the challenging external environment, we are progressing in line with our strategy. We see a positive impact of GST implementation in the long term and are confident that the actions we continue to take, will deliver results. Looking ahead, we expect that the Indian economy and the lubricant market will continue to recover, driven by the positive economic measures, improved COGS and increased vehicle sales and freight movement. 

Castrol India is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and highly committed staff.