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
IDBI Capital has maintained its Hold rating on Castol India Ltd., citing strong free cash flow generation, high return ratios and healthy dividend payouts, but noted that rich valuations limit near-term upside.
The brokerage has kept its target price unchanged at Rs 204, valuing the stock at 17x CY27E earnings, implying a potential upside of around 10% from current levels.
Castrol India reported a largely in-line performance for Q1 CY26 with revenue groeing 9% YoY, driven by ~8% YoY volume growth, supported by double digit volume growth in rural portfolio, premium segment and industrial business.
Ebitda increased by 7% YoY to Rs 330 crore. However, Ebitda margin contracted by 30 basis pointss YoY to 21.3%, impacted by higher employee costs (33% YoY, largely one-off) and higher other overheads (10% YoY), including forex loss.
Margins remained relatively insulated in Q1 CY26 due to 60-day inventory cushion. However, management highlighted headwinds from the forex volatility and base oil prices amid Middle East tensions, with elevated crude ($100+/bbl) likely to pressure margins in the near term.
IDBI Capital largely maintains its CY26E/CY27E estimates and maintain Hold rating, valuing the stock at 17x CY27E EPS to arrive target price of Rs 204.
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.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
