IDBI Capital: Castrol India - Operating Cash Flows Strong; Valuations Attractive
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IDBI Capital Report
Castrol India Ltd. reported better than expected Ebitda margin for Q3 CY20. The Ebitda and profit after tax were 12%/9% above our estimates.
Net sales increased by 4.0% YoY to Rs 8,831 million mainly led by higher volumes (up 9.3% YoY) although realization was weak at Rs 188 per litre (down 4.9% YoY).
Ebitda increased 17.9% YoY to Rs 2,882 million as Ebitda margin improved 384 basis points YoY to 32.6%.
Castrol’s operating cash during 9MCY20 stood at Rs 6,240 million (150% of 9MCY20 profit after tax) mainly due to robust working capital management.
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