Gulf Oil Lubricants India's net profit dropped 24.4% to Rs 35.94 crore on 17.5% decrease in net sales to Rs 359.68 crore in Q4 March 2020 over Q4 March 2019.
Standalone profit before tax (PBT) tanked 37.2% to Rs 46.84 crore in Q4 March 2020 as against Rs 74.56 crore in Q4 March 2019. Current tax expenses slumped 57% to Rs 11.23 crore in Q4 March 2020 as against Rs 26.11 crore in Q4 March 2019. The Q4 result was announced post market hours yesterday, 17 June 2020.
EBITDA skid 25.34% to Rs 55.40 in Q4 FY20 as compared to Rs 74.20 in Q4 FY19. The company has recommended a final dividend of Rs 7 per share for the financial year 2019-20.
The lubricants industry faced many challenges during the year due to the major automotive industry slowdown for new vehicles production/saLes coupled with overall weaknesses in economy across sectors, which impacted the lubricants market demand and usage levels. Liquidity pressures in the trade also added to these lower demand levels as seen in FY 2019-20. The OEM factory fill volumes for the company were directly impacted by this de-growth in vehicle production, particularly commercial vehicles, which fell as much as 50-60% during the year versus last year. As a result, the overall lubricant industry witnessed a close to double digit de-growth after many years.
Amid such a challenging environment, the company has been able to further increase its market share across segments by achieving near similar revenues in its core lubricant sales to the previous year (excluding the effect of one- time institutional order in the previous year). The company's full year performance would have been even better but for the impact in Q4 (impacted by March-end) due to the sudden COVID lockdown and complete market and operations closures in 2nd fortnight of March, which resulted in a -13% volume de growth during Q4. This period has been especially crucial as many of the year end growth related incentive programs for the trade got impacted and sales could not happen as planned, the company said in a release.
Ravi Chawla, managing director and CEO, said: "Given the impact on overall economic scenario and vehicle mobility across the country due to the sudden COVID-19 lockdown measures towards the end of March, our Q4 numbers were impacted registering a de-growth for the first time in many years. However, our fuIl year result is still an outperformance as compared to the industry in term of market share growths. As an organisation, we are geared up for these challenging times. Our focus and efforts during these last few months to keep our strong connect with our trade partners, B2B customers and OEMs and their dealerships and even tapping into new business development initiatives have been successful to deliver higher customer satisfaction levels and also to build a strong 'pipeline' for the future."
Gulf Oil Lubricants India, part of Hinduja Group, is an established player in Indian lubricant market. It markets a wide range of automotive and industrial lubricants, greases, 2-wheeler batteries, etc.
Shares of Gulf Oil Lubricants India gained 1.40% to Rs 630 on BSE. The scrip traded in the range of Rs 600.10 to Rs 668 so far.
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