Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Result Update: Castrol India Ltd - BUY - TP Rs.195 - Kotak

Posted On: 2018-08-05 07:51:22

Raw material pressure: Strong volume growth resulted in decent rise in revenue but headwinds in terms of higher base oil price and weaker currency impacted the margins. The company has undertaken average ~3% hike in selling price from July 2018 to combat the raising raw material cost pressure. New product launches led to impressive volume growth. Castrol has grown higher than industry growth rate (7.5% v/s 6% in H1CY18).

Key Highlights

- Castrol's performance is lower than our expectation. Castrol reported a PAT growth of 19% yoy to Rs.1.64 bn mainly on account of higher lubricant sales volumes, better realization and higher other income.

- The company has recommended an interim dividend of Rs.2.25/share.

- Personal mobility continues to be a key strategic growth driver. With the increased focus on commercial vehicle engine oil portfolio (CRB brand commands strong consumer loyalty) is also delivering results with record volume growth driven by launch of new products and aided by a favorable economic environment, with emphasis on infrastructure development.

- The company has strengthened its specialties portfolio, introducing Castrol TRANSMAX driveline oils and Castrol SPHEEROL greases providing increased protection and reduced downtime.

- Castrol is awarded the 'Overall Performance' trophy by Maruti Suzuki India Limited. The company has also been chosen as approved supplier for Suzuki Ecstar branded lubricants in their premium NEXA channel.

Valuation & outlook

- We expect CIL to report an EPS of Rs.7.3 (earlier Rs.7.4) for CY2018 and an EPS of Rs.7.8 (earlier Rs.7.9) for CY2019. CIL is focusing on new customer acquisition, and distribution expansion to boost Castrol's volume growth. New product launches will also boost lubricant sales. On the basis of our estimates, the stock at CMP is attractively valued at 13.2x EV/EBIDTA, 21.5x P/E and 13.8x P/BV on the basis of CY19E earnings. Based on our valuation multiples model, the target price of Castrol is Rs.195/share (earlier Rs.213) and we maintain BUY rating on the stock. We value the stock at 25x CY19E EPS (earlier 27x). We have lowered our target price to reflect the key headwinds like margin pressure, higher base oil prices and weaker currency.

Shares of CASTROL INDIA LTD. was last trading in BSE at Rs.164.8 as compared to the previous close of Rs. 166.4. The total number of shares traded during the day was 113770 in over 1421 trades.

The stock hit an intraday high of Rs. 167.95 and intraday low of 163.7. The net turnover during the day was Rs. 18783334.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Karia Can Company Ltd Q1FY19 net profit slips to Rs. 1.88 crore

Result Update: Bajaj Electricals Ltd - SELL - TP Rs.545 - Kotak

Result Update: Gabriel India Ltd - BUY - TP Rs.185 - Kotak

Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.743 - Kotak

Result Update: The Phoenix Mills Ltd - ACCUMULATE - TP Rs.707 - Kotak

Result Update: NMDC Ltd - BUY - TP Rs.125 - Kotak

Result Update: National Aluminium Company Ltd - BUY - TP Rs.100 - Kotak

Result Update: PNC Infratech Ltd - BUY - TP Rs.219 - Kotak

Result Update: Insecticides India Ltd - BUY - TP Rs.892 - Kotak

Result Update: Mirza International Ltd - BUY - TP Rs.120 - Kotak

Wonderla Holidays Ltd - Kotak

Result Update: Greenply Industries Ltd - BUY - TP Rs.286 - Kotak

Result Update: Praj Industries Ltd - ACCUMULATE - TP Rs.89 - Kotak

Cholamandalam Investment & Finance Co. Ltd - Outperformer - Centrum

Initial Public Offer: CreditAccess Grameen Ltd - NOT RATED - Kotak

Result Update: Adani Ports and SEZ - BUY - TP Rs.485 - Kotak

Result Update: Carborundum Universal Limited - BUY - TP Rs.420 - Kotak

Result Update: Arvind Ltd - BUY - TP Rs.500 - Kotak

Result Update: Indocount Industries Limited - BUY - TP Rs.103 - Kotak

Result Update: Mahindra & Mahindra Ltd - ACCUMULATE - TP Rs.984 - Kotak

Initiating Coverage: Essel Propack Ltd - BUY - TP Rs.140 - Kotak

Sector Update: Natural Gas Sector - Kotak

Analyst Meet Update: Hero MotoCorp Ltd - ACCUMULATE - TP Rs.3473 - Kotak

Result Update: Time Technoplast Ltd - BUY - TP Rs.195 - Kotak

Result Update: VIP Industries Ltd - ACCUMULATE - TP Rs.570 - Kotak

Result Update: Marico Ltd - ACCUMULATE - TP Rs.375 - Kotak

Result Update: Mold-Tek Packaging Ltd - BUY - TP Rs.351 - Kotak

Result Update: Central Depository Services (India) Ltd - BUY - TP Rs.320 - Kotak

Result Update: Apollo Tyres Ltd - ACCUMULATE - TP Rs.301 - Kotak

Result Update: Akzo Nobel India Ltd - BUY - TP Rs.2200 - Kotak

Result Update: Jindal Stainless (Hisar) Ltd - BUY - TP Rs.227 - Kotak

Result Update: Tata Motors Ltd - REDUCE - TP Rs.277 - Kotak

Result Update: Bharat Electonics Ltd - BUY - TP Rs.135 - Kotak

Result Update: Bluedart Express Ltd - SELL - TP Rs.3215 - Kotak

Result Update: Supreme Industries Ltd - ACCUMULATE - TP Rs.1324 - Kotak

Result Update: Gujarat State Petronet Ltd - SELL - TP Rs.182 - Kotak

Market Strategy: Monthly Outlook for August 2018 - Kotak

Auto Industry Volume Update: July 2018 - Kotak

Result Update: Genus Power Ltd - BUY - TP Rs.58 - Kotak

Result Update: Mahanagar Gas Ltd - ACCUMULATE - TP Rs.1030 - Kotak

Result Update: Persistent Systems Ltd - BUY - TP Rs.1025 - Kotak

Q1 FY19 Result Update: Chennai Petroleum Corporation Ltd - BUY - TP Rs.373 - Kotak

Result Update: Escorts Ltd - ACCUMULATE - TP Rs.958 - Kotak

Result Update: Shree Cements Ltd - ACCUMULATE - TP Rs.18487 - Kotak

Result Update: Container Corporation of India Ltd - BUY - TP Rs.775 - Kotak

Result Update: NIIT Ltd - BUY - TP Rs.125 - Kotak

Result Update: Petronet LNG Ltd - BUY - TP Rs.267 - Kotak

Optiemus Infracom Ltd launches BlackBerry® Evolve and BlackBerry® EvolveX

Result Update: Quess Corp Ltd - BUY - TP Rs.1302 - Kotak

Result Update: ITC Ltd - BUY - TP Rs.330 - Kotak

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018