Castrol India's profit for the second quarter rises due to higher demand
Castrol India announced a 5.1% increase in its second-quarter profits on Tuesday. This was fueled by the steady demand for their automotive and industrial lubricants.
The company, which is majority owned by BP and produces engine oil and industrial lubricants, reported a profit of $27.8 million after taxes for the quarter ending June 30. This was up from $23.2 billion rupees a few months ago.
Total expenses increased 6.6% due to a 3.2% rise in raw materials costs.
India's retail car sales increased nearly 5% on an annual basis during the third quarter. This boosted demand for companies such as Castrol, whose auto industry generates about 80% of their revenue.
Sales of two-wheelers increased by 5.02%. Meanwhile, sales of passenger cars and commercial vehicles grew about 3% and 1 percent, respectively.
Castrol India is a major supplier of lubricants in India, including Maruti Suzuki, Hero MotoCorp and Maruti Suzuki.
In its most recent annual report, the company detailed its plans to expand geographically by expanding its product portfolio, improving its workshop network, and investing in premium brands of lubricants.
Kedar Lele, Managing Director of the company, said in a press release that "Industrial has been a long-term area of growth for us. We've seen encouraging progress in the first half."
After the results were announced, shares of the company rose 1.6% after gaining 9.3% during the reported quarter.
Comparatively, the shares of Gulf Oil Lubricants India, a smaller competitor, rose 10.2% during the same time period. ($1 = 87.7940 Indian rupees) (Reporting by Meenakshi Maidas in Bengaluru; Editing by Sumana Nandy)
(source: Reuters)
