Castrol India announces Third Quarter 2018 results

Strong volume growth continues

31 October 2018, Mumbai:
Omer Dormen, Managing Director, Castrol India Limited: “Our focus on strategy is delivering profitable volume growth ahead of the market across segments, setting us up for higher growth in future. Operations are running well with strong focus on investment in brands, capability, distribution expansion and advocacy. Cost and working capital continue to be managed with rigor and we are introducing new, high technology products that contribute significantly to our growth. We have made very good progress with new customer acquisitions and OEM relationships having signed a strategic agreement with Mahindra Tractors recently. This progress all underpins our commitment to growing profitably.”

Generating momentum

Good operating performance

  • The business is running well, with strong volume growth driven by new products launched in last twelve months.
  • Strong profitability and cash delivery with judicious pricing actions to recover input cost.
  • Volume growth faster than market 6% year to date, comparable revenue growth 10% year to date.
  • Personal mobility continues to be a key strategic growth driver; revival of commercial vehicle business; Industrial has also seen improvement

Strategic delivery

  • Increased investment in distribution expansion, brands and advocacy
  • Increased distribution reaching 150,000 outlets across urban and rural markets
  • First time three key brands on television – Castrol Activ, Castrol MAGNATEC and Castrol CRB TURBOMAX
  • Connected with over 100,000 mechanics through Castrol Super Mechanic contest; connected with around 1,35,000 truckers with the Castrol Truck Aasana programme
  • New OEM alliance with Mahindra Tractors under the “Mileage ka Master” brand

High-grading the portfolio

  • Close to 90% of our volume growth in 2018 has come from the new products introduced in the last twelve months
  • In line with our continued commitment to deliver differentiated technologically superior products with distinctive consumer benefits, the most recent launch being Castrol POWER1 range of lubricants for bikes

Earnings:

  • Revenue from Operations for the quarter was up 8% at Rs.927 crore and for the nine month period was up by 10% at Rs.2,871 crore, compared to the same periods in the previous year.
  • Operating Profit for the quarter was at Rs.214 crore. There was adverse impact due to steep depreciation of the Indian rupee and increase in input costs leading to circa Rs.60 crore impact as compared to the same period in previous year. The company has already taken appropriate actions in the market to recover the impact in the quarter. Apart from the input cost increase, Profit After Tax at Rs.150 crore was also adversely impacted by lower ‘Other Income’ from a one-off property sale during the same quarter in the previous year.
  • Operating profit for January - September period, at Rs.712 crore, is 3% higher than that of the corresponding period in previous year, after absorbing higher input cost of Rs.116 crore. Profit After Tax during the same period is at Rs.496 crore, which is marginally higher than the same period in previous year