Gulf Oil Targets 7-10% Annual Volume Growth Over The Next Decade

Gulf Oil Lubricants India Ltd. is confident of sustaining 7–10% volume growth annually over the next decade, even as the electric vehicle segment continues to expand and raise demand concerns. Speaking to NDTV Profit, the company's Chief Financial Officer, Manish Gangwal, said that the Indian lubricant market is expected to grow at a rate of 3-4% annually over the next decade.

The projections are based on the studies conducted by Gulf Oil and other global experts in the areas of lubricants, Gangwal explained.

"Everybody seems to be suggesting that the lubricant market will continue to grow in India, especially with the same rate of 3-4% over the next decade and beyond, despite decarbonisation efforts and EVs coming up in certain pockets. Buses will get partially converted," he said.

“Our trajectory and our target of growing two to three X (industry rate) of that, which means again 7-10% volume growth, remain intact and we are quite confident on that,” the top executive added.

Gulf Oil aims to achieve the targetted growth rate with a focus on innovation and acquisition of market share, the CFO noted.

Gangwal also highlighted the company's strong performance in the Indian lubricant market, consistently growing at two to three times the market rate over the past 15 years.

The company released its quarterly earnings for the December quarter, reporting a net profit increase of 21.6% year-on-year to Rs 98 crore from Rs 81 crore. Revenue from operations rose 10.7% YoY to Rs 905 crore from Rs 817 crore in Q3 of last financial year. Ebitda jumped 10% YoY to Rs 122 crore in Q3 from Rs 111 crore. Ebitda margins expanded to 13.5% from 12.62% in the year-ago quarter.

Commenting on the results, Manish Gangwa said that Gulf Oil Lubricants India Ltd. will continue to focus on margin expansion with an enhanced emphasis on premium products.

“Currently, we are operating in a 12-14% margin band at the Ebitda level. With these efforts, particularly around product mix improvement and premiumisation, we aim to move to a higher trajectory of 14-16%. Additionally, with the increase in volumes, operating leverage will continue to support growth at the Ebitda level,” he explained.

Gulf Oil Lubricants India ended Monday's trade nearly flat, down by 0.92% at Rs 1,113.45 apiece on the NSE in comparison to the benchmark Nifty 50's decline of 1.6% to 22,553.35 points.