OPM was up 150 bps to 29.4% leading to a 19% rise in operating profits to Rs 253.6 crore as cost of material consumed as a percentage of net sales increased 50 bps to 41.3% in the quarter ended September 2017 from 40.8% in the corresponding previous year period while employee benefit expenses fell 60 bps to 5.4%, and other expenses rose 80 bps to 19.7% while purchase of stock in trade decreased 270 bps to 3.7%.

Other Income decreased 5% to Rs 14.7 crore in Q3CY17 from Rs 15.5 crore in Q2CY16 while interest cost was negligible at Rs 0.2 crore and depreciation rose 4% to Rs 11.1 crore. As a result PBT before EO was up 18% to Rs 257 crore. The company had an EO income of Rs 18.6 crore towards gain on sale of its property compared to nil in the corresponding previous year quarter. PBT after EO was 27% to Rs 27e crore. Effective rate of tax fell to 35.3% from 35.8% leading a 27% increase in PAT to Rs 178.2 crore.

For 9MCY'17 Net Sales of the company was up 1% at Rs 2614 crore compared to corresponding previous year while bottomline fell 5% to Rs 495.1 crore. OPM fell 260 bps to 27.8% leading a 8% fall in operating profits to Rs 726.4 crore. Other income decreased 5% to Rs 48.7 crore while interest cost was down 50% to Rs 0.6 crore and depreciation up 3% to Rs 35.2 crore. PBT before EO as a result fell 8% to Rs 739.3 crore. The company had an EO income of Rs 18.6 crore towards gain on sale of its property compared to nil in the corresponding previous year period. Effective rate of taxes fell to 34.7% from 35.2% leading a 5% decrease in PAT to Rs 495.1 crore.

Commenting on the results, Omer Dormen, Managing Director, Castrol India Limited, said: "The third quarter results show a strong comeback compared to previous quarter and confirms that we are on track with our growth strategy and aspirations. The results are especially commendable given that the quarter saw the GST implementation which created considerable initial uncertainty in the market place."

"The personal mobility segment, which is the pillar of our growth strategy, saw a double digit volume growth during the quarter whilst power brands also showed similar growth, compared to same period during the previous year."

"One of the highlights of the quarter was the Golden Peacock Award commendation for Corporate Governance received by the Company in recognition of its strong focus on Ethics & Compliance.

During the quarter under review, the Company continued to make strong progress on its strategic priorities, focusing on new customer acquisition, distribution expansion and delivering premium customer experiences at each touch point. The Company entered into a new exclusive supply partnership with Piaggio and extended its existing OEM partnerships with the VW Group (Skoda, Audi and VW) and Volvo cars.

The Industrial business also achieved a strong win for its metal working fluids with TaeguTec India – a leading supplier of carbide cutting tools.

The Company also undertook a strong outreach programme connecting with over 100,000 mechanics through the Castrol Super Mechanic contest.

Despite the challenging external environment, Castrol India is progressing in line with its strategy. With the stabilization of the business environment post GST launch, the Company is confident that the actions it continues to take, will deliver results. Looking ahead, we expect that the Indian economy and the lubricant market will continue to recover, driven by the positive economic measures, improved COGS and increased vehicle sales and freight movement.

Castrol India is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and highly committed staff.

The scrip is currently trading around Rs 399 on the BSE