OPM rose by 280 bps to 24.1% leading to a 20% rise in operating profits to Rs 207 crore as cost of material consumed as a percentage of net sales decreased to 50.1% in the quarter ended December 2014 from 53.2% in the corresponding previous year period along with purchase in stock in trade which fell to 4.2% from 5.3% and 20 bps decrease in advertisement expenses to 6.1% and 10 bps fall in other expenses to 7.2% limited by 70 bps rise in employee benefit expense to 4.5% and 30 bps increase in Carriage, Insurance and freight to 3.2%.

Other Income decreased 60% to Rs 10.8 crore in Q4CY14 from Rs 27.1 crore in Q4CY13 while interest cost was negligible at Rs 0.6 crore and depreciation rose 33% to Rs 10.9 crore. As a result PBT was up 8% to Rs 206.3 crore. The effective rate of tax rose to 36% from 33.7% leading a 5% increase in PAT to Rs 132 crore.

Automotive PBIT margins increased 130 bps to 23.7% while non-automotive segment was up 50 bps to 20.7%.

Commenting on the results, Ravi Kirpalani, Managing Director, Castrol India Limited, said: "This is indeed a strong overall performance and we have made good progress on our strategic agenda including driving safety, employee engagement scores, brand health and market share of key brands in key geographies – all of which showed improved performance over previous year. We continued to deliver innovative, pioneering technology products for our consumers and launched the world's first carbon neutral range of engine oils in India under the Castrol Professional range.

We also led the industry by driving new category creation in the Commercial Vehicles and Scooter segments, launching two new brands – Castrol CRB Mini-truck (for Medium Light Commercial Vehicles) and Castrol Activ Scooter (for the fast growing Scooter segment)."

Commenting on the Industrial business, Mr Kirpalani said: "Despite significant demand shrinkage in core manufacturing sectors, the company's Industrial business also showed a very good performance during the year under review with volumes increasing by 8% over previous year."

For CY'14 Net Sales of the company rose 7% to Rs 3392.3 crore compared to corresponding previous year while bottomline fell 7% to Rs 474.5 crore. OPM fell 50 bps to 2116% leading a 4% rise in operating profits to Rs 716.7 crore. Other income decreased 42% to Rs 48.1 crore while interest cost was up 41% to Rs 2.4 crore and depreciation up 18% to Rs 36.1 crore. PBT before EO as a result fell 2% to Rs 726.3 crore. The company had an EO income of Rs 22.8 crore in CY'13 as it completed sale of one of its non operating plants compared to nil in CY'14. PBT after EO fell 5% to Rs 726.3 crore. Effective rate of taxes rose to 34.7% from 332% leading a 7% decrease in PAT to Rs 474.5 crore

Outlook as per company

Looking ahead, although the sharp drop in crude oil price will translate into lower base oil cost in the short term, there is likely to be continuing volatility in crude prices and currency movement. If the general economic environment improves, we expect demand to start picking up during the second half of the year. In the longer run, we continue to remain optimistic about the Indian lubricant market and our business growth. The company is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.

The promoter's shareholding remains unchanged at 71.03% as on 31^st December 2014 compared to previous quarter..

The scrip is currently trading around Rs 464 on the BSE