Castrol India Q4 Results Review : IDBI Capital Upgrades Rating To 'Buy' — Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

IDBI Capital Report

Castrol India Ltd.’s Q4 CY24 profitability was above our expectations. Castrol’s top-line increased by 7% YoY and by 5% QoQ to Rs 13.5 billion. Sales volume grew 7.3% YoY and 7.1% QoQ, driven by innovative product launches and increased visibility.

The Personal Mobility segment contributed 40-45% of revenue, while commercial vehicles contributed 40%, with double digit growth in Q4 CY24. Ebitda increased by 14% YoY to Rs 3.8 billion, and the Ebitda margin expanded by 173 bps YoY to 27.8% (up 555 bps QoQ), primarily due to higher gross margins aided by lower oil prices.

Management has re-iterated margin guidance of 22-25% and aims to outpace the industry volume growth of 3-4%. We maintain our CY25 EPS estimates and roll over to CY26E EPS estimates.

We value the stock at a PER of 20 times CY26E EPS to derive a target price of Rs 219, and we upgrade our rating to Buy from Hold on the stock.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.