Castrol looks well oiled

Castrol India yesterday, after market hours, reported an almost doubling of net profit a Rs.244 crore (YoY) for Q1CY21 (Jan-Dec year ending) up 95%. The lower base effect on account of the complete lockdown last year most certainly has a play on the bumper numbers.

Revenue from operations rose 66% at Rs.1139 crore and it was up 22% sequentially – this means the company has managed to revive demand, going back to pre-Covid levels.

The company’s cost efficiency programmes and working capital management efforts led to healthy cash from operations at Rs. 269 crore in the quarter, which is equivalent to 1.1 times of Profit After Tax.

Looking ahead, the company said that 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. The management is keeping a close watch on the situation and responding with appropriate actions as needed.

The market has given a big thumbs up to these numbers, with the stock opening over 5.5% higher a Rs.131.90 and rising further by 7% to hit an intraday high at Rs.134.15. Volumes are up over 3.5x. Its 52-week high is at Rs.140.35.