Moneycontrol
May 18, 2017 06:17 PM IST | Source: Moneycontrol.com

Hold Gulf Oil Lubricants; target of Rs 825: ICICI Direct

ICICI Direct recommended hold rating on Gulf Oil Lubricants with a target price of Rs 825 in its research report dated May 18, 2017.

Hold Gulf Oil Lubricants; target of Rs 825: ICICI Direct

ICICI Direct's research report on Gulf Oil Lubricants


GOL’s raw material costs include crude oil derivatives like base oil and additives. With the surge in crude oil prices in the last few quarters, raw materials costs (base oil prices) have increased. However, the rise in raw material costs will be largely offset by appreciation in rupee and regular product price hikes.


Outlook


New OEM tie-ups through aggressive marketing are also expected to help GOL gain market share in the industrial segment and create shareholder value. We value Gulf Oil Lubricant at 28x FY19E EPS of Rs 29.4 to arrive at a target price of Rs 825 with a HOLD recommendation on the stock.


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