Castrol India conducted conference call on 01 November 2021 to discuss the financial results and performance of the company for the quarter ended September21. Managing Director Sandeep Sangwan and Chief Financial Officer & Whole time Director Mr Deepesh Baxi addressed the call

Highlights of the Concall

• Volumes increased 6% to 50 million litres in Q3CY21 compared to Q3CY20 while it was up 11% compared to previous quarter. Two wheelers formed 45% of volumes, with scooters forming 5-10% of total two wheelers. Commercial vehicles oils form 25% of volumes and cars form 20-25% of volumes with industrials forming the balance.

• Pricing action taken in Jan-21, Apr-21 and Jun-21 resulted in realisation growth of 9% QoQ (14% YoY).

• The company mentioned that the three price hikes taken taken in January21, April21 and June21 are sufficient to cover base oil prices till September. The company will continue to accrue some benefits of previous price hikes in Q4CY21 as well and may further consider taking incremental price hikes if base oil prices start rising again.

• The company launched new products with the latest BS-VI ready technology such as Castrol MAGNATEC for cars. For commercial vehicles, it launched four BS-VI ready variants such as Castrol CRB Turbomax and CRB Minitruck.

• 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.

• The company has signed agreements with MG Motors and Tata Motors for the supply of electric vehicle fluids in India. It is further exploring options for development of electric vehicle fluids with two wheeler EV manufacturers.

• The company expects electrification to be sooner in scooters than motorcycles and two wheelers more than personal vehicles. It ascertains 25-30% of its 2W portfolio to be electric by 2030.

• The company's products are available at over 1,400 Jio-BP retail outlets. Further expansion into Jio-BP retail outlets (to more than 5,500 sites) over the next couple of years would help strengthen its network. It continues to expand its ‘Express Oil Change' service at Jio-BP fuel stations.

• The ongoing chip shortage has not impacted the company as much owing to a stronger presence in the aftermarket.

• The company restarted its pilot with 3M India across 10 cities and has seen demand rise across the vehicle care category. It plans to implement the learnings from the same and launch in additional cities.

• The company expects sustainable EBITDA margin at around 24-27%.