Hem Securities has recommended a buy rating on Castrol India with a price target of Rs 419 in its May 1, 2008 research report. "The company has posted excellent results for the quarter ended Q1FY08. The net sales for the company jumped to Rs 4,929 million for the Q1FY08 as against the net sales of Rs 4,421 million for the Q1FY07 with the growth rate of 12%. The operating profit for the company gone up by 77% to Rs 1,134 million for the Q1FY08 as against the operating profit of Rs 641 million for the Q1FY07. The operating profit margin stood at 23.01% for the Q1FY08 versus the operating profit margin of 14.49%."

"The company with unique business model catering towards the most important sector of the economic growth like automobile, industrial and marine & energy is strongly driving on its growth path through organic approach and thereby emerging as one of the fastest growing company in the lubricants sector. The stock at the current market price of Rs 303 is trading 14.65 times to its earnings of Rs 20.21 and 7.27 times to its book value of Rs 41. The stock is having huge upside potential in medium to long-term. Therefore, we are putting ‘BUY’ recommendation on the stock with the target price of Rs 419 which is approximately 38% up from the current market price of Rs 303," says Hem's research report.

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