CASTROL INDIA LTD. Result Update (PARENT BASIS): Q3 CY15 CMP 440.20 th Target Price 505.00 NOVEMBER 9 , 2015 BUY ISIN: INE172A01027 12th h, 2013 Index Details Stock Data SYNOPSIS Sector Oil Marketing Castrol is one of the world’s leading manufacturers BSE Code 500870 and marketers of premium lubricating oils, greases, Face Value 5.00 metal working fluids, control fluids and related 52wk. High / Low (Rs.) 544.00/409.00 services to automotive, manufacturing, mining, marine Volume (2wk. Avg.) 39000 etc., across the world. Market Cap (Rs. in mn.) 217722.92 The company’s Net profit rose by 21.46% y-o-y in Q3 Annual Estimated Results (A*: Actual / E*: Estimated) CY15 and stood at Rs. 1432.00 million against Rs. YEARS CY14A CY15E CY16E 1179.00 million in the corresponding quarter of the Net Sales 33923.00 34043.39 36222.17 previous year. EBITDA 7648.00 10042.34 11160.57 In Q3 CY15, Net Sales stood at Rs. 7843.00 million as Net Profit 4745.00 6285.94 6951.02 compared to Rs. 8023.00 million in Q3 CY14. EPS 9.59 12.71 14.05 EBITDA or Operating profit was at Rs.2308.00 million, P/E 45.88 34.64 31.32 an increase of 23.03% y-o-y in Q3 CY15 as against Shareholding Pattern (%) Rs.1876.00 million in Q3 CY14. (QUARTERLY) As on Sep-15 As on Jun-15 During the quarter, other income grown by 29.57% y- PROMOTER 71.03 71.03 o-y of Rs. 149.00 million as against Rs. 115.00 million in the corresponding period of the previous year. FIIs 6.52 5.68 DIIs 7.31 8.12 In Q3 CY15, Profit before Tax grew by 24.19% y-o-y of Rs. 2213.00 million compared to Rs. 1782.00 million in OTHERS 15.14 15.17 1 Year Comparative Graph Q3 CY14. For the nine month period Jan–Sep 2015, Net Profit was up by 38.51 % to Rs. 4744.00 million as against Rs. 3425.00 million for the same period previous year. The company received a number of external awards during the quarter under review and was ranked #12 on the list of Brand Z® India’s Top 50 Most Valuable brands. Operating Profit and PAT of the company are expected to grow at a CAGR of 13% and 12% over 2013 to CASTROL INDIA LTD. S&P BSE SENSEX 2016E respectively. PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%) Castrol India Ltd. 440.20 217722.92 9.59 45.88 43.83 150.00 Indian Oil Corp Ltd. 409.95 997038.70 40.18 10.22 1.40 87.00 Petronet LNG Ltd. 210.70 156750.00 12.79 16.34 2.76 20.00 Gulf Oil Lubricants India Ltd 483.00 23943.50 16.96 28.48 12.80 275.00 QUARTERLY HIGHLIGHTS (PARENT BASIS) Results updates- Q3 CY15, Castrol India manufactures and markets a range of automotive and industrial lubricants. The business continues to be driven by strong performance in personal mobility segment with Castrol Active increasing its market share and strengthening its leadership position in the two-wheeler engine oil category. Continuing on the automotive performanc has reported its financial results for the quarter ended 30th September, 2015. MONTHS Sep-15 Sep-14 % Change Net Sales 7843.00 8023.00 (2.24) PAT 1432.00 1179.00 21.46 EPS 2.90 2.38 21.46 EBITDA 2308.00 1876.00 23.03 The company has achieved a turnover of Rs. 7843.00million for the 3rd quarter of the calendar year 2015 as against Rs. 8023.00 million in the corresponding quarter of the previous year. Net profit rose by 21.46% y-o-y in Q3 CY15 and stood at Rs. 1432.00 million against Rs. 1179.00 million in the corresponding quarter of the previous year. EBITDA or Operating profit was at Rs.2308.00 million, an increase of 23.03% y-o-y in Q3 CY15 as against Rs.1876.00 million in Q3 CY14. EPS of Rs. 2.90 for the 3rd quarter of CY15 as against an EPS of Rs. 2.38 in the corresponding quarter of the previous year. Break up of Expenditure: Rs. Millions Break up of Expenditure Q3 CY15 Q3 CY14 Chg % Cost of Materials Consumed 3352.00 4204.00 -20% Depreciation 94.00 84.00 12% Employees Benefit Expenses 467.00 445.00 5% Other Expenditure 1398.00 1338.00 4% Purchase of Stock-in-Trade 549.00 402.00 37% Segment Revenue COMPANY PROFILE Castrol India Limited is a Public Limited Company with 70.92% of the equity held by Castrol Limited UK (part of BP Group). From a minor oil company, with a share of about 6% in 1991, Castrol India has grown to become the second largest lubricant company in India with a market share of around 25%. Castrol India manufactures and markets a range of automotive and industrial lubricants. It markets its automotive lubricants under two brands - Castrol and BP. The company has leadership positions in most of the segments in which it operates including passenger car engine oils, 4-stroke oils and multi-grade diesel engine oils. Castrol India has the largest manufacturing and marketing network amongst the lubricant companies in India. The company has three manufacturing plants, including a state-of-the-art plant in Silvassa. All three blending plants of Company are certified for the environment Management system (ISO 14001) and occupational Health & Safety Management System (OHSAS 18001). Castrol is one of the world’s leading manufacturers and marketers of premium lubricating oils, greases, metal working fluids, control fluids and related services to automotive, manufacturing, mining, marine, and oil exploration and production customers across the world. Castrol couples high quality lubricant engineering with an expert technical support network and supply capability to deliver quality solutions wherever customers need them. Today, the company’s vast portfolio of high performance lubricants, including Castrol EDGE, Castrol MAGNATEC and Castrol Power1, are available in almost 140 countries worldwide. Part of the BP group, the company is headquartered in the UK. At the forefront of pioneering technology with its 13 R&D centers globally, Castrol invests every year in research and development of lubricants. Castrol’s global teams of specialists have a deep understanding of what customers need and advise on solutions designed to optimize performance and help improve quality, productivity and the environmental, health and safety profiles of their customers. The brand represents over 100 years’ experience in ‘liquid engineering’ : producing advanced lubricants for a wide range of applications, from manufacturing processes and metalworking to mining, shipping and marine activities and energy production. Castrol’s products and services play a critical role in lubricating the global economy through what is mined, made and moved around the world. Products & Services Passenger Car Oil Commercial Vehicle Oil Which Oil Specialty Range Motorcycles Castrol Professional Engine Oil Castrol Pitstop Gearless Scooter Oil Castrol Bike Point GLOBAL BUSINESSES Marine Machinery Oil & Gas Metals Automotive Manufacture Mining Aerospace Aviation Power Generation FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions) Balance Sheet as at DECEMBER 31, 2013A -2016E CASTROL INDIA LTD. CY13A CY14A CY15E CY16E EQUITY AND LIABILITIES: I. A. Shareholders’ Funds: a) Share Capital 4945.60 2472.80 2473.00 2473.00 b) Reserves and Surplus 2568.60 2495.00 3542.90 4145.19 Sub Total-Net worth 7514.20 4967.80 6015.90 6618.19 B. Non-Current Liabilities: a) Long Term Provisions 108.30 110.30 103.68 107.21 b) Other Long Term Liabilities 24.80 26.40 27.84 29.06 Sub Total-Long term liabilities 133.10 136.70 131.52 136.27 C. Current Liabilities: a) Trade Payables 4728.30 5398.60 6046.43 6651.08 b) Other Current Liabilities 1209.50 1373.50 1505.36 1625.78 c) Short Term Provisions 2565.00 3041.80 3802.25 4410.61 Sub Total-Current Liabilities 8502.80 9813.90 11354.04 12687.47 TOTAL EQUITY AND LIABILITIES (A+B+C) 16150.10 14918.40 17501.46 19441.93 ASSETS: II. D. Non-Current Assets: Fixed Assets i. Tangible Assets 1432.20 1622.10 1810.26 1955.08 ii. Intangible Assets 2.40 98.60 140.01 170.81 iii. Capital work-in-progress 318.70 156.70 81.48 54.59 a) Sub-Total- Fixed Assets 1753.30 1877.40 2031.76 2180.49 b) Deferred tax assets 529.60 618.10 692.27 761.50 c) Long Term Loans and Advances 875.90 850.30 867.31 879.45 Sub Total- Non-Current Assets 3158.80 3345.80 3591.34 3821.44 E. Current Assets: a) Inventories 3740.10 3654.70 3680.55 3776.24 b) Trade Receivables 2372.40 2715.00 3073.38 3396.08 c) Cash and Bank Balances 5942.20 4314.50 6005.78 7041.85 d) Short Term Loans and Advances 864.40 862.10 1103.49 1346.26 e) Other Current Assets 72.20 26.30 46.92 60.06 Sub Total- Current Assets 12991.30 11572.60 13910.12 15620.49 TOTAL ASSETS (D+E) 16150.10 14918.40 17501.46 19441.93 Annual Profit & Loss Statement for the period of 2013 to 2016E Value(Rs.in.mn) CY13A CY14A CY15E CY16E Description 12m 12m 12m 12m Net Sales 31796.00 33923.00 34043.39 36222.17 Other Income 836.00 481.00 854.60 1054.58 Total Income 32632.00 34404.00 34898.00 37276.75 Expenditure -24692.00 -26756.00 -24855.65 -26116.18 Operating Profit 7940.00 7648.00 10042.34 11160.57 Interest -17.00 -24.00 -7.25 -6.16 Gross profit 7923.00 7624.00 10035.09 11154.40 Depreciation -305.00 -361.00 -418.38 -476.95 Profit Before Tax 7618.00 7263.00 9616.71 10677.45 Tax -2532.00 -2518.00 -3330.77 -3726.43 Net Profit 5086.00 4745.00 6285.94 6951.02 Equity capital 4946.00 2473.00 2473.00 2473.00 Reserves 2568.00 2495.00 3542.90 4145.19 Face value 10.00 5.00 5.00 5.00 EPS 10.28 9.59 12.71 14.05 Quarterly Profit & Loss Statement for the period of 31st Mar, 2015 to 31st Dec, 2015E Value(Rs.in.mn) 31-Mar-15 30-June-15 30-Sep-15 31-Dec-15E Description 3m 3m 3m 3m Net sales 7992.00 9236.00 7843.00 8972.39 Other income 435.00 152.00 149.00 118.60 Total Income 8427.00 9388.00 7992.00 9091.00