Castrol India Ltd., incorporated in the year 1979, is a Mid Cap company (having a market cap of Rs 13753.75 Crore) operating in Petrochemicals sector. Castrol India Ltd. key Products/Revenue Segments include Petroleum Products, Other Operating Revenue and Scrap for the year ending 31-Dec-2020.
Financials
For the quarter ended 30-09-2021, the company reported a Standalone Total Income of Rs 1081.60 Crore, up 19.79 % from last quarter Total Income of Rs 902.90 Crore and up 20.88 % from last year same quarter Total Income of Rs 894.80 Crore. Company reported net profit after tax of Rs 185.90 Crore in latest quarter.
Investment Rationale
Castrol India’s (Castrol) Q3CY21 EPS was down 9% YoY despite rise in volumes, hit by steep fall in margins. EPS was up 33% QoQ driven by rise in volumes as offtake improved compared to covid-hit Q2 and margins due to benefit of price hike in Jun’21. High input cost, which the company indicated has almost doubled YoY, does not appear to have been fully passed on. The brokerage has cut both CY21-CY22E EPS by 6% each as hit from cut in margin to 25.8-27% (28-29% earlier) exceeded gains from upgrade in volumes by 4%-1%. Cut in CY22E EPS has led to reduction in target price (15x CY22E EPS) by 6% to Rs124 (12% downside).
Promoter/FII Holdings
Promoters held 51.0 per cent stake in the company as of 30-Sep-2021, while FIIs owned 12.19 per cent, DIIs 16.46 per cent.
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