Castrol India clocks 9.7% rise in profit in 2016

Castrol India today announced its results for calendar year 2016 and the fourth quarter of 2016. While profit from operations during Q4 2016 is up by 2.9% at Rs 208.7 crore, profit after tax at Rs 155.8 crore is up by 10.7% as compared to Q4 2015.

For the January-December 2016 period, profit from operations increased by 12.2% to Rs 959.9 crore while profit after tax was up by 9.7% to Rs 674.9 crore as against Rs 615.2 crore in 2015.

Commenting on the results, Omer Dormen, managing director, Castrol India, said: “Despite the external challenges faced in the last few months of 2016, Castrol India delivered a strong set of results. These results have been delivered by excellent performance across both the automotive and industrial segments. The heartening part of this year’s results is the overall volume increase of over 4% for the year, driven by continued momentum in the personal mobility segments and power brands, both delivering double-digit growth. Furthermore, the efficiency and effectiveness programmes undertaken during the year, enabled us to manage our costs well, as we continued to invest in our brands, our markets and our people.

“It is good to see that our consistent investment behind our power brands and personal mobility space is delivering profitable volume growth. The industrial segment also showed significant volume growth driven by customer wins in the automotive manufacturing, metal working and wind energy segments, despite a challenging environment.”

Omer Dormen added, “We are very pleased with the strong set of results for the year, delivered against volatile market conditions, thanks to the hard work and effort of our employees and distributors and continued loyalty of our customers. We expect the volatility to increase in the first half of 2017, with rising input costs and the continued impact of demonetisation. However, we are confident that our focussed strategy, the strength of the Castrol brand and the commitment of our employees will continue to make Castrol India win in the market.”

The company was recently awarded the prestigious Ramkrishna Bajaj National Quality Award Performance Excellence Trophy, which recognises performance excellence and emphasises high integrity and quality leadership.

2016 performance and outlook for 2017
In 2016, Castrol India made strong progress on its strategic priorities, led by the personal mobility business, mainly driven by the Castrol Activ two-wheeler engine oil and Castrol Magnatec passenger car engine oil.

The company says that while it continues to increase its share in the scooter and mini truck market, it also saw a turnaround in its commercial vehicle engine oil business with the re-launch of its iconic Castrol CRB Plus diesel engine oil.

Castrol also launched a number of products like GTX Eco and GTX Ultraclean in the passenger car segment as well as Castrol Alusol SL 35 XBB, a high-performance cutting fluid for the industrial segment.

The company says Q4 2016 was particularly affected by demonetisation which impacted lubricants consumption as well as sale of vehicles. This is expected to continue in the early part of 2017. Input costs are also increasing due to rising base oil prices. Castrol says it expects 2017 to be a challenging year but remains optimistic about the Indian lubricant market and its business growth.

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