Gulf Oil Lubricants India (GOLIL) rose 2.58% to Rs 714 after net profit jumped 14.6% to Rs 64 crore on 14.2% increase in net sales at Rs 481.86 crore in Q3 December 2020 over Q3 December 2019.
Profit before tax (PBT) soared 16.5% to Rs 85.73 crore in Q3 December 2020 as against Rs 73.59 crore in Q3 December 2019. Tax expense for the quarter rose 16.6% to Rs 21.93 crore as against Rs 18.80 crore in Q3 December 2019. The Q3 result was declared after market hours on Friday, 5 February 2021.
On the back of significantly improved demand conditions across segments, both B2C and B2B and aided by improved OEM demands, Gulf Oil Lubricants India has delivered nearly 16% volume growth Y-o-Y (year-on-year) during Q3. Profit after tax (PAT) has grown inspite of rising pressure from input costs side but helped with continuing cost initiatives and margin management strategies initiated, the firm stated. While the vehicle movements especially public transportation, etc. are still not at pre-COVID 19 levels, there is an overall improvement in the economic activities and lubricant consumption increase is a good reflection of the same and the company has continued its trajectory of delivering 2-3x industry growth in these challenging times.
Barring PCMO (passenger car motor oil), for which major metro cities are key markets, all other segments in after-market saw a return to normalcy for the industry. For the B2C segment of the company, all key product categories recorded good growth, majorly so in MCO and CVO where the company managed to bring in handsome double-digit growth. Even B2B related and industrial businesses saw strong growth and record sales in this quarter. The company's robust supply chain and distribution strengths combined with its strong demand sensing strategies resulted in record level volumes in key sub segments. Innovative programs engaging trade partners, influencers and consumers alike, which leveraged its association with Chennai Super Kings (CSK) during this season's premier league, significantly contributed to the growth of Bazaar Sales.
Ravi Chawla, the managing director (MD) & chief executive officer (CEO) of GOLIL, said: "I am delighted to share the historic quarterly results for the company where we have surpassed all our previous records of volumes, revenues and profits. With the significant pick up in economic activities and restoration of normalcy in most of the businesses, lubricants demand witnessed good comeback. Improvement is new vehicle sales including in commercial vehicles segment, where we have first fill exposures, all business verticals achieved their respective record numbers during the quarter. The strength of our brand equity, innovative product offerings, network and team's passion have once again proved to be key differentiators that reflect in our Company's continued outperformance. I must add that while demand side situation is quite positive, there are rising pressures from supply and input costs sides and we are taking necessary steps well in advance of the market to continue the margin management strategies for the coming quarters."
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The board will pay an interim dividend of Rs 7 per equity share (i.e. 350% on face value of Rs 2 per equity share) for the year 2020-21. It set 17 February 2021 as the record date for the payment of interim dividend.
Meanwhile, the board of GOLIL has approved to enter into an agreement with Gulf Oil International (GOI) to participate and co-invest in GOI's recent investment along with the Clean Growth Fund (CGF - a UK venture capital fund) in Indra, the UK Based Electric vehicle (EV) and smart energy technology company developing innovative charging and energy storage solutions for home and commercial use.
GOLIL will acquire 7.85% stake of Indra Renewable Technologies. The deal will be executed for a cash consideration of GBP 15,00,000. The transaction is said to be executed within a period of 2-3 months.
Indra Renewable Technologies (Indra), founded in 2013, manufactures a range of smart energy products, including electric vehicle Smart Charger and a bi-directional 'Vehicle to Grid' (V2G) charger designed for both residential and light commercial use. Investment in Indra is a key stepping-stone for Gulf into the e-mobility sector, with the view to accelerate investments and partnerships in this space in future.
With this investment, Gulf India will get access to an established technology in EV charging space to adopt the same for Indian conditions and leverage its wide distribution and brand strengths to extend Gulf Branded residential and commercial charging points as per the evolving needs of Indian consumers. Gulf India will become a shareholder with CGF and GOI in Indra, alongside OVO Group, which had provided seed capital and technical support to Indra via Kaluza, its technology business.
GOLIL, 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.
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