Castrol India's Q1 profit rises on new product launches, resilient demand

Engine oil maker Castrol India reported a 6.8% rise in first-quarter profit on Tuesday, boosted by new product launches and resilient demand for its automobile lubrication products.

The company, in which oil major BP has a 51% stake, said profit after tax rose to Rs 2.16 billion (nearly $26 million) in the January-March quarter, from Rs 2.03 billion a year ago.

A significant rise in sales of two-wheelers and passenger vehicles during the quarter along with steady demand from existing vehicles benefited Castrol, which derives more than 80% of its revenue from automobile lubricants.

The company, which also manufactures industrial lubricants like turbine oils, said in a statement that the launch of new products significantly expanded its market share across segments.

Revenue from operations grew 2.4% to Rs 13.25 billion , despite soft consumer demand initially in the quarter, Managing Director Sandeep Sangwan said.

Total expenses grew 2.9%, as compared to a roughly 9% growth a year earlier, while the cost of raw materials and packing materials stayed flat in the quarter.

Castrol India's shares closed 0.6% down ahead of its results. They have risen 17.3% so far this year, while those of smaller peer Gulf Oil Lubricants India Ltd have jumped 43.2%.