Castrol India Ltd. put up a strong performance during the October-December 2014 quarter, continuing to build on operational momentum in a challenging macro-economic environment. Profit from operations was up sharply at 20 per cent, driven by a one per cent, increase in volume and a higher unit gross margin.
For the full year, profit from operations was higher at Rs. 680.6 crores, up four per cent over the previous year, despite a sharp increase in the cost of goods and a challenging environment. Profit after tax for the year was lower at Rs. 474.5 crores (Rs. 508.6 crores), largely due to significant lower other income, one-offs and exceptional items.
Commenting on the results, Mr. Ravi Kirpalani, Managing Director, Castrol India Ltd., said: “This is indeed a strong overall performance and we have made good progress on our strategic agenda, including driving safety, employee engagement scores, brand health and market share of key brands in key geographies, all of which showed improved performance over the previous year. We continued to deliver innovative, pioneering technology products for our consumers and launched the world’s first carbon neutral range of engine oils in India under the Castrol Professional range. We also led the industry by driving new category creation in the commercial vehicles and scooter segments, launching two new brands – Castrol CRB Mini-truck for medium light commercial vehicles, and Castrol Activ Scooter for the fast growing Scooter segment.”
During the year, Castrol was valued as the 15th most valuable brand across categories in India in the BrandZ study done by Millward Brown. The study valued the Castrol brand at $1.3 billion. Castrol was one of the few balanced brands wherein equity (depth of emotional connect) was at par with financial value (width / scale built). The company also received several awards, especially for the pioneering work done in the digital / social media space.
Looking ahead, although the sharp drop in crude oil price will translate into lower base oil cost in the short term, there is likely to be persistent volatility in crude prices and currency movement. If the general economic environment improves, the company expects demand to start picking up during the second half of the year. In the longer run, it remains optimistic about the Indian lubricant market and business growth.
The company is in a strong position indeed to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.