Highlights of the Concall

• Revenues increased 66% to Rs 1138.7 crore in Q1CY21 compared to Q1CY20 as last year quarter saw the onset of the covid-19 pandemic and resultant business slowdown which saw lockdown starting in second half of March 2020 which had an impact on demand last year

• Volumes jumped 58% to 60 million liters on low base in Q1CY21 compared to Q1CY20 while it rose 15% compared to Q4CY20. Volume growth was largely led by automotive, which formed 85% of the product mix while the balance was from industrials. Within automotive, 40% of the volumes came from personal mobility and the balance from CV and other lubricants.

• Demand remained strong in most segments during the quarter as result of positive sentiment. However, the company indicated that the second wave of Covid-19 is likely to impact volumes during the seasonally strong Q2CY21.

• Pricing action taken in January 2021 resulted in 5% realisation growth compared to Q1CY20 and 6% compared to Q4CY20.

• The company undertook a second price increase in April 2021 across products to combat the impact of higher base oil prices after the 4% increase in January 2021.

• The corrective pricing action taken in the CV oils space continued to yield volume growth in Q1CY21.

• Focused investments, interventions and actions taken in the second half of 2020 towards brand building with increased marketing and advertising spends ( the company spent Rs 65 crore in Q4 of 2020 versus Rs 11 crore in Q4 of 2019), new product introductions corrective pricing have yielded a positive impact on overall topline growth. This has been aided by improving demand trends especially in tractor and SUV sales in 1Q 2021.

• The cost efficiency programs and judicious working capital management led a healthy cash flow from operations at Rs 269 crore in Q1CY21 which is equivalent to 1.1 times of PAT

• The company entered into a strategic collaboration with ki Mobility Solutions to supply lubricant products to ki Mobility workshops in India which will also be available on goBumpr, their digital platform strengthening its network and expanding footprint, as well as building participation in digital market platforms,

• The company's plant continue to operate safely deploying Covid-19 safety processes and guidelines as laid out by local governments to ensure it meet customers demand while most of the employees continue to work from home.

• The second wave of the Covid-19 pandemic in India is resulting in a market slowdown in various parts of the country. In addition, supply disruptions on account of base oil and raw materials availability, logistics challenges and rupee depreciation are likely to adversely impact demand and supply going forward.