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Castrol India Q2 Review - Raw Material Price Inflation To Keep Margins In Check: Motilal Oswal

Castrol India Q2 Review - Raw Material Price Inflation To Keep Margins In Check: Motilal Oswal

<div class="paragraphs"><p>Castrol India Ltd. (Source: Company website).</p></div>
Castrol India Ltd. (Source: Company website).

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Motilal Oswal Report

Castrol India Ltd. missed our estimates due to lower-than-estimated volumes of 45 million litre (down 8% estimate; up 55% YoY / down 26% QoQ)- as the quarter was challenged by localised lockdowns and muted demand. 

The management guided that demand momentum has picked up since June 2021 and is expected to continue (although a potential third wave may be a critical development). 

Castrol India took pricing action twice in Q2 CY21 (in April and June, along with a price hike in January 2021 as well) to mitigate the surge in input cost.

This resulted in realisation of Rs 197.7/litre (in-line / up 6% QoQ), with the Ebitda margin at 22%.

Click on the attachment to read the full report:

Motilal Oswal Castrol Q2CY21 Result Update.pdf

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