Capitaline

Analyst Meet / AGM 06-Nov-18

Conference Call

Castrol India

Confident of 5-7% volume growth

Castrol India conducted conference call to discuss the financial results and performance of the company for the quarter ended September 2018. Managing Director Omer Dormen and Director Finance & Chief Financial Officer Miss Rashmi Joshi addressed the call
Highlights of the Concall

Sales volumes grew 4.3% YoY to 51 million litres. Nearly 90% of the volume growth during the quarter was due to new products launched during the last four quarters. Looking ahead, the company targets to grow volumes by 4-5% over the long term

Segmental volumes remained constant with PCMO (passenger car motor oils) segment at 41% volume share, CVO (commercial vehicle operation) segment at 46% volume share and Industrial segment at 13% volume share. The PCMO segment is having a buoyant market ahead due to growing personal automobile segment and the CVO segment is expected to register high single-digit volume growth

Revenue was up 8% YoY in Q3CY19 compared to Q3CY18 led by volume growth (up 3.2% YoY) driven by new products launched and realization growth of around 4.3% YoY. For 9MCY18, revenue grew 10% YoY led by 6% volume growth (higher than industry volume growth of 2-4%) and 4% YoY realization growth.

The company has taken three price hikes in the past nine months till Sept '18, an overall 3.5% price hike across segments and 5% hike in the B2B segment alone.

Castrol India has increased its presence to 150,000 retail outlets from 105,000 in CY17. The company feels there is great opportunity to penetrate rural areas

Castrol India has spent Rs 3.5 crore in advertisements, promotional activities and customer attraction.

The company has incurred a capex of Rs 50 crore for 9MCY 18 and has maintained its annual capex guidance of Rs 100 crore

The company will continue to focus on driving volumes through product launches. 90% of the volume growth in 2018 came from new products launched in the last 12 months.

The company is confident of recording 5-7% volume growth in years to come as against 2-4% industry growth

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