Castrol Q2 net up 2%, predicts tough year ahead

 Castrol said its board had recommended an interim dividend of Rs. 4 per share for the half year ending 30th June 2006. Castrol said its focus on the growing 4 stroke motorcycle segment has resulted in strong volume growth performance in this sector.

 The outlook for the rest of the year was limited, the company said. It cautioned that while topline outlook for the rest of the year would be positive, "the profit scenario would continue to be challenging given the risk of further escalation in input costs, on the back of rising crude oil price."

 Castrol managing director Naveen Kshatriya said raw material prices had gone up almost 40% this year.  "Castrol India has achieved significant growth in revenue in the quarter driven largely by higher price realizations. The company has successfully managed to secure higher prices in its retail automotive lubes business thereby mitigating most of the COGS increases. The company is confident of continuing to recover the increases over time and hold on to unit margins," he said.