Castrol India's quarterly profits drop due to higher costs and one-time charges
The lubricant maker Castrol India reported a 9.9% decline in its fourth-quarter profit on Tuesday. This was due to higher raw material costs and an unforeseen?charge, which outweighed the boost from a sustained demand.
Profit after tax for the company fell from 2.71 billion rupees to 2.45 billion (about $27.2 million) during the quarter ending December 31.
The results include a?one-time charge of 225.3 millions rupees related to?India’s newly enacted labor code.
Castrol India is a major supplier of lubricants for automakers such as?Maruti Suzuki, Hero MotoCorp and?Hyundai.
The demand for its products was boosted by the 17.6% increase in India's car sales during the third quarter.
The company's revenues from operations increased 6.4%, to 14.4 billion rupies, but its total expenses rose by 9.2%. This was primarily due to an increase of 8% in the price of raw materials and packaging.
In late December, the engine oil manufacturer announced that Canada Pension Plan Investment Board (CPPIB) and U.S. Private Equity firm Stonepeak will?launch an?offer to purchase?upto 26% of Castrol India. This follows their agreement to 'acquire' the business from BP. Stonepeak now has majority control over the company.
(source: Reuters)
