Castrol India Q3 Results Review


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Castrol India Ltd.’s Q3 CY22 operating earnings at Rs 2.57 billion (down 2% YoY; down 10% QoQ) stood below our and street estimates primarily on-

  1. weaker than estimated sales volume at 47-48 million litres and

  2. higher than estimated raw material expense; the same was partially offset by 10% YoY and 28% QoQ lower operating expense, driven by aggressive cost control measures.

Seasonally weaker demand from agri and rural segments, impacted sales during the quarter.

In addition, extreme volatility in forex and base oil prices, led to contraction in gross margins during the quarter.

Castrol undertook three price revisions over nine months CY22, to offset the increase in raw material prices.

Going ahead, the volatility in raw material prices is most likely to continue for few quarters. Personal mobility continues to be a focus area for Castrol with growth expected in the segment till 2035 and beyond, irrespective of electric vehicle adoption.

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