Castrol India - High Advertising Spends Hit Q4 Margins: IDBI Capital
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IDBI Capital Report
Castrol India Ltd. reported weaker than expected results for Q4 CY20 as sales/Ebitda were 13%/29% below our forecasts.
Net sales decreased by 7.6% YoY to Rs 9,352 million mainly led by lower volumes (down 3.7% YoY) and lower realization at Rs 180/litre (down 4.0% YoY).
Ebitda fell 24.5% YoY to Rs 2,576 million; Ebitda margin fell by 618 basis points YoY to 27.5% as the company’s promotional expenses jumped nearly six times YoY to Rs 650 million.
Its net profit fell 30.8% YoY to Rs 1,877 million as depreciation increased 21.9% YoY to Rs 223 million.
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