Castrol India Limited profits down in first quarter of 2012
The first quarter of 2012 has proved to be challenging for Castrol India Limited. The company announced their first quarter results and the news was not all that promising. While Net Sales increased by 4.1% to Rs.781.7 crores, profits after tax were down by 10% to Rs.122.9 crores and profit before tax also fell by 9.6% to Rs.183.6 crores.
Since the second half of 2011, lubricant market growth has been on a downward swing affecting sales, profits and market position. This is primarily due to sway in the economic situation prevalent in India at the moment coupled with the ebb of inflationary strain is what is bringing down profits in this sector. Rupee devaluation and rising input costs are also adding to the already depressing situation.
Despite these factors, Castrol is continuing with their investment and development besides launching of modern technology brands and marketing activities. The company launched Castrol GTX Modern Engine with sludge busters which have been developed for the new generation of petrol engined cars in the market. Besides this, Castrol has also relaunched Castrol CRB Plus and Castrol CRB Turbo with Durashield Boosters which will help in extending the lift of engine twofold.
CASTROL INDIA ANNOUNCES LIMITED REVIEW FINANCIAL RESULTS
FOR THE FIRST QUARTER ENDED 31ST MARCH 2012
Castrol India Limited today announced its first quarter results for the period January – March 2012.
During the quarter under review, Net Sales were up by 4.1% to Rs. 781.7 crores, Profit After Tax decreased by 10.0% to Rs 122.9 crores whilst Profit Before Tax reduced by 9.6% to Rs. 183.6 crores.
Commenting on the results, Mr. Ravi Kirpalani, Chief Operating Officer and Automotive Sales Director, said, “We continue to operate in a challenging environment. Since the second half of last year, the lubricant market growth has been slower due to the economic slow down and inflationary pressures. This has been compounded by continuing input cost pressure and rupee depreciation which have impacted margins.
Despite the difficult environment, the company continues its investment in its people, technology, brands and marketing activities. During the quarter under review, the company launched Castrol GTX Modern Engine with sludge busters – developed specially for new generation petrol engine cars. It also relaunched its flagship brands Castrol CRB plus and Castrol CRB Turbo with “Durashield Boosters™” that provide up to two times engine life. The company is also focusing on driving volume growth through increasing distribution reach and strengthening advocacy amongst key stakeholders”.
Outlook: In the short term, the rising raw material cost and volatility of the Indian rupee remains a concern. However, we remain optimistic of long term growth potential for Castrol India. This is based on both the growth prospects for the automotive and non automotive lubricants in India as well as the strong competitive position that Castrol enjoys based on its technology leadership, strong brands and distribution and the commitment of its people.