Highlights of the Concall 

• Revenue dipped 8% in Q4CY21 compared to Q4CY20 as volumes declined 4% to 52 million litre partly impacted by efforts to aid distributors in reducing inventory levels by around a week. Volumes were higher 10.6% compared to previous quarter. 

• Realizations dipped 4% compared to previous quarter owing to corrective pricing action undertaken in the CV portfolio. 

• The corrective pricing action taken in the CV oils space yielded double-digit volume growth in Q4CY20. 

• Auto volumes for the company were below pre- Covid level while industrial volume has grown in Q3FY21 compared to Q3FY20. Castrol witnessed strong volume growth on CV segment front on account of price cuts. 

• The company increased Advertising & Promotion spends sharply as it had spent lower amounts in H1CY20 (at Rs 65 crore versus Rs 11 crore in Q4CY19. The company expects the positive impact of this investment to continue going forward. 

• The company launched our all new premium range of two-wheeler lubricants in 4Q 2020, Castrol POWER1 ULTIMATE, developed with full synthetic technology for bikes, sports bikes and scooters offering both protection and performance for riders 

• The company continued to invest in digital technology and efficiency programmes leading to robust working capital management and judicious cost management thus generating healthy cash flow from operations for FY 2020 of Rs 893 crore which is 1.5 times of Profit after tax. 

• The company entered into a strategic partnership in Q2CY20 with Jio-BP as the sole supplier of lubricants and access to 1,350 retail sites, which it plans to expand to 5,500 retail sites. This should result in additional touch points for customers and fresh visibility for Castrol. 

• The company believes Internal Combustion Engine-based oils will remain in vogue in the country for the next 20–30 years as current car ownership penetration is weak. However, Castrol has also entered into agreements for EV fluids with OEMs in India, including MG Motors and Tata Motors, and remains a pioneer thereof with the aid from its global parent 

• The company remains optimistic on recovery in volume growth given pickup in passenger and freight movement across the country and uptick in realizations following a blended 4% price hike in January 2021 to pass on higher RM costs