OPM was down 490 bps to 24.5% leading to a 10% fall in operating profits to Rs 227.4 crore as cost of material consumed as a percentage of net sales increased 620 bps to 47.5% in the quarter ended September 2018 from 41.3% in the corresponding previous year period while employee benefit expenses fell 40 bps to 5%, and other expenses fell 110 bps to 18.6% while purchase of stock in trade increased 140 bps to 5.1%.

Other Income decreased 44% to Rs 18.6 crore in Q3CY18 from Rs 33.3 crore in Q3CY17 while interest cost was refund of Rs 0.2 crore and depreciation rose 22% to Rs 13.5 crore. As a result PBT was down 16% to Rs 232.7 crore. Effective rate of tax rose to 35.4% from 35.3% leading a 16% decrease in PAT to Rs 150.4 crore.

Operating Profit for the quarter was impacted as there was adverse impact due to steep depreciation of the Indian rupee and increase in input costs leading to circa Rs.60 crore impact as compared to the same period in previous year. The company has already taken appropriate actions in the market to recover the impact in the quarter. Apart from the input cost increase, Profit After Tax at Rs.150 crore was also adversely impacted by lower 'Other Income' from a one-off property sale during the same quarter in the previous year

For 9MCY'18 Net Sales of the company was up 10% at Rs 2871.2 crore compared to corresponding previous year while bottomline was flat at Rs 496.4 crore. OPM fell 150 bps to 26.2% leading a 4% rise in operating profits to Rs 753.4 crore. Other income decreased 13% to Rs 58.7 crore while interest cost was Rs 0.8 crore and depreciation up 16% to Rs 41 crore. PBT as a result rose 2% to Rs 770.3 crore. Effective rate of taxes rose to 35.6% from 34.7% leading a flat PAT at Rs 496.4 crore.

Commenting on the results, Omer Dormen, Managing Director, Castrol India Limited said: uour focus on strategy is delivering profitable volume growth ahead of the market across segments, setting us up for higher growth in future. Operations are running well with strong focus on investment in brands, capability, distribution expansion and advocacy. Cost and working capital continue to be managed with rigor and we are introducing new, high technology products that contribute significantly to our growth. We have made very good progress with new customer acquisitions and OEM relationships having signed a strategic agreement with Mahindra Tractors

recently. This progress all underpins our commitment to growing profitably. "

The scrip is currently trading around Rs 144 on the BSE