Q3FY21 Company Update - Castrol India - ICICI Direct

Castrol India's operating revenue for Q4CY20 declined 7.6% YoY to Rs. 935.2 crore. Volumes were at 52 million litre, down ~4% YoY. Gross margins dipped 1.2% YoY to Rs. 106.8/litre due to lower realisation. Subsequently, EBITDA/ litre was at Rs. 49.5/litre, down 21.6% YoY. EBITDA came in at Rs. 257.6 crore, down 24.5% YoY. PAT was at Rs. 187.7 crore, down 30.8% YoY.

Valuation & Outlook

Although Castrol has been successful in signing agreements with many automobile and oil & gas players in the industry, its strategy to defend potential disruptions like higher drain interval, electric cars will be the key monitorable for long term volume growth, going ahead. In the near term, Castrol will report strong volume growth YoY in CY21E mainly due to low base effect. The focus on maintaining balance between margins & volumes along with growth in the personal mobility segment (~45% of total volume) will be a key factor directing the company ahead. We maintain HOLD rating on the stock. We value Castrol India at 15x CY22E EPS of Rs. 8.6 to arrive at a target price of Rs. 130 (vs. previous TP: Rs. 115).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Castrol_CoUpdate_Feb21.pdf

Shares of CASTROL INDIA LTD. was last trading in BSE at Rs.129.65 as compared to the previous close of Rs. 130.6. The total number of shares traded during the day was 114229 in over 964 trades.

The stock hit an intraday high of Rs. 133.5 and intraday low of 128.75. The net turnover during the day was Rs. 14937589.

Source : Equity Bulls

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