Thursday, October 25, 2007

Castrol India Limited Announces Unaudited Financial Results for the Nine Months Ended September 30, 2007

Castrol India Limited, market leader in the retail automotive lubricant segment, today declared its 3rd quarter results for the period July – September 2007. Profit Before Tax during the period was at Rs.86 crores – an increase of 107% against a PBT of Rs. 41 crores during the same period last year. Profit After Tax was also higher by 60% from Rs.34 crores during July – September 2006, to Rs.54 crores during the same period this year. Net Sales for the quarter was up by 3%, from Rs.419 crores in 2006 to Rs.431 crores in 2007.

Commenting on the results, Mr. Naveen Kshatriya, Managing Director, said, “the results reflect the loyal patronage of our premium products by our discerning customers, trade, workshops and Original Equipment Manufacturers (OEMs). We are proud to offer the most contemporary, world class products, backed by leading edge innovation and technology. Our consumers appreciate the quality and value propositions of Castrol brands like Edge, Magnatec, Activ 4T and Power1. Castrol CRB, India’s largest selling multigrade diesel engine oil marks its 75th year in the Indian market, continuously upgrading with vehicle technology.”

Mr. Kshatriya also emphasized the increasing strength of the relationships with key partners like OEMs and channels. Speaking about the vital role of relationships in Castrol’s performance, Mr. Kshatriya said, “As much as we focus on revitalizing our products, we continuously work at rejuvenating and strengthening our win-win relationships with valued OEM partners like Tata Commercial Vehicles Division, Tata Passenger Cars, Mahindra and Mahindra, Ford, JCB and L&T. We have also entered into a new partnership agreement with Volvo Cars who have just launched their vehicles in India. Going forward, we will continue to explore more strategic alliances.

To strengthen our connect with end users like bikers, car and truck owners, we have refreshed and upweighted our campaigns in media and on ground, focusing communication on product benefits and technology. We have also recently launched Castrol Magnatec – a high technology, part synthetic engine oil for passenger cars.

The company is also moving up the service value chain through service formats like Castrol BikeZone, a chain of franchised multi-bike servicing outlets spread across the country. Castrol BikeZone customer base has doubled in the last 12 months and is now set for faster paced expansion.

Outlook for the future

The operating margins of the business have become healthier and are likely to be sustained at the current levels. The overall market outlook continues to be mildly positive with a satisfactory monsoon and good growth in the passenger car sector, contrasted by declining new vehicle sales of commercial vehicles and motorcycles. With more efficient engine technology, the volume consumption of lubricants will continue to decline. This will be offset by adoption of higher technology, high value products where Castrol has leadership positions. Castrol focus will therefore continue to remain on technology led value growth.

In addition, crude prices have increased dramatically during the quarter and this could lead to input costs going up as well as demand for commercial vehicle lubricants going down if diesel prices go up.

Naveen Kshatriya

About Castrol India Limited

Castrol India Limited is a public limited company in which 70.92 % of the paid-up capital is held by Castrol Limited, U.K which is a part of BP group of companies worldwide. Starting off as a trading unit in India, Castrol has grown to become the largest specialist lubricant company. Castrol has constantly demonstrated its commitment to Indian consumers by offering world class products, backed by the highest level of customer service. Castrol India is acknowledged as the technology leader in the Indian lubricants industry.

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