Castrol India held a conference call on 30 October 2023 to discuss the results for the quarter ended September 2023 and way forward. Mr. Sandeep Sangwan, Managing Director and Mr. Deepesh Baxi, Chief Financial Officer and Whole time Director of the company addressed the call.

Highlights of the Concall

• The end of last quarter (Q3) saw hardening crude prices, with global uncertainties, and inflationary pressures. The recent conflict in the Middle East has brought more challenges to crude price volatility.

• The company continues to focus on strategic expansion in aftercare, electric vehicles and industry partnerships for the service and maintenance of automobiles.

• The company newly launched autocare range is gaining good traction and acceptance by trade. The entire range of products is now available in over 18,000 outlets and ecommerce platforms across India.

• Castrol Magnatec 5W30 SUV continues to do well catering to high performance demands in SUVs, which accounts for 50% of personal mobility four-wheeler space.

• The company now has expanded its footprint to 1200 multi-brand passenger car workshops, over 5500 bike points and 47 Castrol Express oil change outlets at Jio-bp sites strengthening its service and maintenance network.

• After launching 100% post-consumer recycled (PCR) bottle for Power1 Ultimate last year, it has successfully transitioned all its blow molded high density poly ethylene (HDPE) bottles manufactured and distributed across its supply chain network with 30% PCR content. With this migration, Castrol India will be able to reduce its virgin plastic consumption by 1800 tonne in addition to carbon emission reduction by 2600 tonne per annum.

• The company initiative to conduct Automotive Skills Development Council (ASDC) certified EV readiness training to make care and bike mechanics in India EV ready is progressing well. It has trained over 200 mechanics across India by end of this quarter.

• The company expects lubricant category to grow till 2040 despite emergence of EV. The company is also working towards EV fluids.

• Lubricant volume sold in Q3 was 51 million litre compared to 58 million liters in previous quarter.

• Personal mobility accounts almost for about 40% of its revenues while Commercial vehicles account for another 35 percent and then balance 15% is the industrial fluid.

• The company mentioned that Q3 is always a lean period while Q2 is the strongest quarter.

• The company imports most of its base oil and raw materials from Singapore and Asia pacific. As a result it is not much impacted by current Middle East crisis.

• Base oil prices were flat compared to last quarter and was up 10-15% compared to last year quarter. The company expects prices to move up further in next 3-6 months.

• The company is seeing good growth in synthetics oil and now contributes to around 10-15% of total revenues.

• EV fluid and auto care contribution is still very small in single digits but the company expect it to grow in the future.