Castrol India
The company declared a set of very flat numbers for its first quarter ended 31st March 2013. Net sales was at Rs.781 crore, ditto as at end of Q1 of previous year and QoQ, it was up 3%. Operating expenses, YoY, it managed to bring it down 1.7%, mainly thanks to the lower raw material cost . Interestingly, Q1 seems to be seasonally the time when every year, the company hikes up its ad spend. In Current Q1, it was at Rs.54 crore, down 8% but QoQ, it rose 42%. Net profit came in at Rs.124 crore, up 0.8% (YoY) and up 5% (QoQ). As one can see, just plain flat numbers.
Despite these numbers, the stock remained strongly in the green and this excitement was generated due to the company’s decision to reduce its share capital. It is not sub-division of face value but actual reduction in paid-up share capital. The current face value is Rs.10 and the company plans to reduce the nominal value to Rs.5 by returning Rs.5 to the shareholders. This means the equity share capital which now stands at Rs.494.60 crore, will halve to Rs.247.30 crore. This will in turn enhance value for the shareholders, apart from getting back Rs.5 per share. A debt free, true blue blood company!