Kolkata-based Tide Water Oil Company Limited (TWOCL) aims to pass on the increase in raw material cost to end consumers in order to maintain its current profit margins.
Shareholders were told at the company’s annual general meeting that the rise in raw material cost had to be passed on as far as possible through higher product prices to retain current margins.
Kallol Data, chairman of TWOCL, said that although the company reported its highest ever profit before tax of Rs 35.31 crore against Rs 12.95 crore in the previous year, it feared a slump in volume growth in the next fiscal owing to technology-related changes.
The last fiscal was tough for the petroleum and lubricant industry because of spiralling crude prices which increased the price of base oils, the main raw material for lubricants.
Because of inflationary factors, growth in the Indian automobile lubricant industry slowed in 2007-08. Notwithstanding this sluggishness, TWOCL sales rose 14 per cent.
TWOCL attributed the growth to its sustained focus on retail market segment, specially in the premium and emerging product categories.