Castrol India conducted conference call on 03 August 2021 to discuss the financial results and performance of the company for the quarter ended June21. Managing Director Sandeep Sangwan and Chief Financial Officer & Whole time Director Mr Deepesh Baxi addressed the call

Highlights of the Concall

• The quarter saw challenges in the form of localized lockdowns, muted demand, as well as a sharp rise in input costs owing to the Covid second wave,

• Volumes in Q2CY21 was up 55% compared to Q1FY21 but was down 26% compared to Q4FY21 stood at 45 million liters. Personal Mobility formed around 40% of total volume, Commercial Vehicles 40-45% whereas Industrials accounted for the remainder. The industrials business was hit in the second wave and subsequent lockdowns and is recovering now.

• The company has recently launched a new concept of Castrol Express Oil change outlets which offer quick oil change service for consumer's on-the-go.

• The company also leveraged digital platforms to continue building engagement with the biker community with its high performance synthetics range of Castrol POWER1 ULTIMATE two-wheeler engine oils through performance imagery led impact properties including Bollywood movie launch Toofaan.

• The company indicated that volumes have recovered strongly in July 2021 as economic activity resumed and demand is expected to remain robust in H2CY21 if there is no impact from a third wave of Covid in the coming months

• The company took pricing hike twice in April and June in Q2CY21 along with a price hike taken in Jan'21.

• Castrol has also been focused on ESG (Environmental, Social, and Corporate Governance) with the parents' Path 360 Programme, which aims to turn net carbon free by 2050. The company is looking at plastics reduction, and renewables as key measures to start with. In order to lower energy consumption, Castrol is looking at blending at lower temperatures.

• The company expects operating margin to be 25–26% going forward.

• The company continues to invest in its brand to reinforce higher brand recall among customers. It spent Rs 35–40 crore on advertising in Q2CY21

• The company expects capex of Rs 100-120 crore in CY21.

• The company has paused its pilot with 3M in light of the pandemic and is making certain changes across its portfolio on the basis of the same. The pilot should resume in Sep-21 and launch over a few more cities from the six originally launched in the pilot

• As per Nielsen, Castrol's market share in the bazaar segment stands at 22-23%, while the second closest player stands at 7%. In two wheeler, four wheeler and commercial vehicles Castrol had around 26-27%, 35% and 18% market share respectively.

• The company remains confident of its strong business fundamentals and longer term profitable business growth as the situation returns to a normal state.