OPM was flat at 29.8% leading to a 3% rise in operating profits to Rs 263.3 crore as cost of material consumed as a percentage of net sales decreased 70 bps to 40.1% in the quarter ended March 2017 from 40.8% in the corresponding previous year period while employee benefit expenses rose 40 bps to 5.5%, and other expenses fell 90 bps to 18.1% and purchase of stock in trade increased 180 bps to 7.3%.

Other Income decreased 1% to Rs 18.5 crore in Q1CY17 from Rs 18.7 crore in Q1CY16 while interest cost was negligible at Rs 0.3 crore and depreciation rose 43% to Rs 12.3 crore. As a result PBT was up 2% to Rs 269.2 crore. The effective rate of tax fell to 33.5% from 34.9% leading a 4% increase in PAT to Rs 179 crore.

For CY'16 Net Sales of the company was up 2% at Rs 3370.4 crore compared to corresponding previous year while bottomline rose 10% to Rs 674.9 crore. OPM rose 270 bps to 29.8% leading a 12% rise in operating profits to Rs 1004.9 crore. Other income decreased 9% to Rs 87.3 crore while interest cost was up 88% to Rs 1.5 crore and depreciation up 15% to Rs 45 crore. PBT as a result rose 10% to Rs 1045.7 crore. Effective rate of taxes rose to 35.5% from 34.3% leading a 10% increase in PAT to Rs 674.9 crore.

Commenting on the results, Omer Dormen, Managing Director, Castrol India Limited, said: "We are delighted to announce that Castrol India delivered a strong set of results for the quarter ended March 2017 despite the lingering effects of demonetization and the rising cost of goods. We also managed to hold volumes in a market which showed a decline compared to previous year."

"The performance continues to be driven by growth in the personal mobility segment led by power brands which now contribute significantly to the overall volumes. The industrial business also continues to deliver double digit growth in volumes in a market which is flat."

The strong results for the quarter have been achieved in an environment which continues to be challenging as the country is going through some major structural changes in its economy, including the upcoming GST implementation. Though these may lead to short term performance pressures, we are confident these measures will positively impact the economy as well as the lubricant industry in the long term.

Castrol is already in a strong position to benefit from these growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.

The scrip is currently trading around Rs 418 on the BSE.