|Rupees Crores||Q1 Jan - Mar 2014||Q1 Jan - Mar 2013||Q1 % Inc / (Dec)|
|Net Sales / Income from Operations||815.1||
|Profit Before Tax||153.0||185.3||(17.4)|
|Profit After Tax||100.2||124.3||
Castrol India Limited today announced its first quarter results for the period January – March 2014. The Profit After Tax was down by 19% at Rs 100.2 crores as against Rs.124.3 crores during the same period in the previous year.
Pursuant to the scheme of reduction of share capital under Sections 100 to 105 of The Companies Act, 1956 as approved by the shareholders and Hon’ble High Court of Bombay, the Company reduced the fully paid-up face value of equity shares from Rs.10/- per share to Rs. 5/- per share. Consequently, during the quarter, the Company paid Rs. 5/- per share to the eligible shareholders as on the record date of March 3, 2014.
Commenting on the first quarter results, Ravi Kirpalani – Managing Director, Castrol India Limited, said: “The lower profits for the quarter are a reflection of the continued difficult external market environment largely in the Commercial Vehicle, Building & Construction and Industrial sectors. These lower Profits were a result of weak demand leading to lower volumes, significant rupee depreciation compared to the same period last year, hardening base oil prices and increased investment behind people and advertising costs. The adverse impact of the Rupee depreciation alone was Rs. 53 crores during the quarter under review. However, we continued to grow in the personal mobility segment, which includes two-wheeler as well as passenger car engine oils, and showed robust underlying growth.”
Mr. Kirpalani said: “Despite the challenging environment, we were able to recover almost all the increase in the cost of goods through improved sales mix and judicious pricing actions. We continued to invest in our brands, pioneering technology and marketing activities and the quarter under review saw an increase of almost 14% in the Advertising & Sales promotion spend compared to the same period last year. The quarter saw the launch of two new product brands - Castrol Activ Scooter – a dedicated engine oil for scooters and Castrol Magnatec Stop Start - an engine oil for passenger cars, especially those operating in city driving conditions. The company also launched an Oil Immersed Brake Oil (OIB) for wet brake application in tractors.
As Performance Partner of the International Cricket Council, the company leveraged the ICC T20 Cricket World Cup, held in Bangladesh, with a very successful and innovative digital campaign, supporting the launch of Castrol Activ Scooter. The campaign had an online reach of 43 million and an engagement of six million.
The industrial business also delivered a good performance with over 5% volume growth despite demand shrinkage in all core manufacturing sectors. This was driven largely by new customer acquisition, distribution expansion and differentiated product & service offers. The company also won a major contract for exclusive supply of products to Ford’s new plant in Sanand, Gujarat, during the period under review.
The strong headwinds of 2013 are continuing into 2014 and the first half is likely to remain both volatile and uncertain due to the macro-economic weaknesses.
The company response is to continue its sharp focus on the personal mobility business and improving its brand advantage, advocacy and availability.
In the longer run, we continue to remain optimistic about the lubricant market and our business growth. The company is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of our staff.