Castrol India
Castrol India ended its year 2014 on 31st Dec and its financial performance was disappointing. Net profit for the year was down 7% at Rs.474 crore and this was despite a 7% rise in net sales at Rs.3392 crore. Lower other income and higher operating cost pulled down the bottomline. Deferred tax for the year was higher at Rs.262 crore v/s Rs.241 crore in 2013. The performance was mainly affected due to the sluggish performance of the automobile sector which contributes around 85% to total revenue of the company. Though volume growth was down, overall growth in revenue was driven by better prices.
But for the falling crude prices, the drop in bottomline could have been more pronounced. During Q4, it saw a 3% (YoY) drop in its main raw material, a derivative of crude oil but because the other costs rose or remained same, margins did not really improve. In fact its gross profit margins fell from 24.24% to 22.55%. The coming year could see the true effect of falling crude prices and with the auto sector also showing signs of improvement, 2015 could be a much better year. The company’s reserves as at 31st Dec 2014 stood at Rs.249 crore.