Castrol India reported a sequential decline in revenue and profitability for the third quarter, as rising raw material costs and adverse currency movements put pressure on its operating performance.
The company’s revenue fell 7.3% quarter-on-quarter (QoQ) to ₹1,734.7 crore from ₹1,871.5 crore in the previous quarter.
Net profit declined 49.3% to ₹176.4 crore from ₹347.7 crore, while earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped 47% to ₹262.3 crore from ₹494.5 crore.
EBITDA margin contracted to 15.1% from 26.4% in the previous quarter.
Saugata Basuray, managing director of Castrol India, said the company navigated a challenging operating environment during the quarter, marked by a sharp rise in raw material costs and unfavourable currency movements. He said pricing actions implemented earlier in the year helped cushion the impact on margins, while the company continued to invest in expanding its rural distribution network and strengthening its industrial business.
The industrial business recorded another quarter of double-digit volume growth, Basuray said.
Chief Financial Officer Mrinalini Srinivasan said pricing actions taken earlier in the year supported profitability, with EBITDA growing 11% over the first nine months of the calendar year. However, she cautioned that the operating environment was likely to remain volatile and inflationary.
The company will continue to respond to margin pressures through pricing and cost measures, while maintaining its focus on expanding market share across its businesses, Srinivasan said.
Castrol India expands distribution and service network
Castrol India expanded its national distribution footprint to approximately 1.67 lakh outlets, including 46,000 rural outlets, as it continued to strengthen its reach across markets, according to the exchange filing.
Its Auto Care portfolio is now available across around 50,000 physical outlets, in addition to e-commerce and modern trade channels, it said.
The company also expanded its service ecosystem to more than 870 Castrol Auto Service centres, 37,000 independent bike workshops and 16,000 multi-brand workshops. Its Rural Service Express network now covers more than 1,000 locations.
Shares of Castrol India ended 1.39% lower at ₹194.64 on Friday, October 23. The stock has gained 0.6% over the past month and is up 1.8% so far this year.