Castrol India slipped badly in the June quarter — its revenue fell 10 per cent and profit declined a sharper 33 per cent y-o-y. The company’s performance was impacted by lower volumes due to the impact of GST transition and the lingering effect of demonetisation. The commercial vehicles oil business, in particular, was badly hit. Also, a sudden rise in the price of base oil, the main raw material, did not help.
Castrol India’s weak performance was in contrast to the decent show put up by Gulf Oil Lubricants thatmanaged volume growth and 13 per cent y-o-y growth in profit in the June quarter. Castrol India’s performance has been lagging that of Gulf Oil Lubricants for several quarters now. Consequently, the latter’s stock has done much better. Historically, the stock of Castrol India, as the market leader, commanded a valuation premium and Gulf Oil Lubricants played catch-up. Now, the latter trades at a slight premium.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.