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Motilal Oswal Report
Castrol India Ltd. has taken several initiatives to strengthen its market position. Its new auto care segment is gaining traction and the company plans to add more products to its auto care portfolio. Castrol also plans to expand its service network.
The company is focusing on its Ki Mobility partnership and is expanding its existing portfolio to strengthen its auto care offerings.
Castrol India maintained robust return ratios above 40% in CY23 and a dividend payout of ~86% (~3.8% dividend yield). The stock trades at 21.7 times CY24E earnings per share of Rs 9.2 and 14.9 times CY24E enterprise /Ebitda.
We the stock at 22 times CY25E EPS to arrive at our target price of Rs 230. We reiterate our 'Buy' rating on the stock.
Castrol India, a subsidiary of Castrol Ltd. UK (part of BP Group), is the second largest manufacturer of automotive and industrial lubricants in India. It has a strong distribution network of over 105,000 retail outlets serviced through 420 distributors across India.
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