Castrol Q3 profit up 30% to Rs197 crore
New Delhi: Castrol India Ltd on Tuesday reported 30% jump in the December quarter net profit to Rs196.7 crore as volumes grew at the fasted pace in a decade.
In contrast, the company’s net profit in the October-December period of 2016 was Rs151.3 crore. Castrol India managing director Omer Dormen said sales volumes have picked up in second half of 2017 after the impact of demonetisation and goods and services tax (GST) waned.
“We recorded the strongest volume growth in 10 years,” he said. Sales was up 7.7% in the fourth quarter to Rs970.3 crore. Castrol follows calendar year as its financial year. Its income from operations during the quarter under review is not comparable with the previous year numbers due to changes in treatment of indirect taxes post the implementation of the GST, which kicked in from 1 July 2017.
Excluding this impact, net sales increased by 24% over the year-ago quarter, and by 6% for the entire year. For the full year, Castrol posted 3.2% rise in net profit on almost unchanged turnover of Rs3,851.5 crore.
The company’s board of directors at its meeting on Tuesday recommended a final dividend of Rs2.5 per share (2016: final Rs4.5 per share and a special dividend of 2 per share) for 2017. This is in addition to an interim dividend of Rs4.5 per share paid in September.
Castrol, Dormen said, witnessed a remarkable turnaround during the second half of last year. “The performance is indeed even more creditable considering the strong headwinds we faced from the external environment for large part of the year,” he said.
“The strong volume growth for the second successive year, in a really challenging environment, gives us the confidence to believe that our growth strategy is well on track.” The company, he said, continues its focus on personal mobility and power brands, combined with aggressive distribution expansion and customer acquisition, underpinned by consistent investment in brand, technology and customer service and advocacy.
While the personal mobility segment continues to contribute significantly to the bottom line, the company also saw a market share growth in the commercial vehicle segment where industry volumes have been largely flat or declining.
On the future outlook, he said the momentum would continue with the stabilisation of the business environment post GST. “We are beginning to see signs of recovery in the Indian economy and with the structural reforms continuing, we should see an increase in sales of vehicles as well as freight movement,” he said.