Company is almost debt-free. Company is expected to give a good quarter Company has a good return on equity (ROE) track record: 3 Years ROE 51.80% Company has been maintaining a healthy dividend payout of 76.95%
ABOUT Castrol India Ltd is principally engaged in the business of manufacturing & marketing of automotive and industrial lubricants and related services.[1]
KEY POINTS Product Portfolio The company manufactures and sells various kinds of oil lubricants and other fluids for cars, motorcycles, commercial vehicles and others.[1]
Distribution Channels The company's distribution network includes 350 distributors who service ~1 lakh customers and sub-distributors. The company also serves ~3,000 key institutional accounts directly and from distributors.[2]
Manufacturing Capabilities The company owns and operates 3 manufacturing plants in India which are located in Patalganga (Maharashtra), Paharpur (West Bengal) and Silvassa (Union Territory).[3]
Jio-BP Partnership In July 2020, the company's ultimate promoter BP plc, and Reliance Industries Ltd started their Indian fuels and mobility JV, Reliance BP Mobility Ltd. BP has already paid RIL 1 billion USD for 49% stake in JV with RIL holding the rest 51% stake. The JV aims to become a leading player in India's fuels and mobility markets. The JV has benefited the company as it began selling fuels and Castrol lubricants from RIL's existing retail outlets.[4]
Strong Parentage The company is owned by Castrol Ltd UK which is a globally trusted multinational brand. Castrol products are sold in more than 150 countries and it is a preferred lubricants partner for Volkswagen, Audi, BMW, Komatsu and many other businesses. It was acquired by BP Plc in 2002 which is one of the 7 oil supermajors in the world.[5]
Royalty Terms For the use of the brand "Castrol", the company pays Castrol Ltd, U.K. (promoter) royalty @ 3.5% on annual turnover subject to a cap of 10% on profit before tax (PBT).[6] It paid ~80 crores and ~112 crores in royalty to Castrol Ltd U.K. in FY20 and FY19 respectively.[7]