Emkay Global Financial's research report on Gulf Oil Lubricants
We reiterate our positive stance on GOLI, led by steady core volume growth (7% core volume CAGR over FY24-26E, >2x of the industry growth), and a 13- 14% EBITDA margin profile supported by input cost management, strategic pricing, and marketing efforts. GOLI has acquired stakes in EV-related businesses, including a 51% controlling stake in Tirex (a DC fast-charger manufacturer in India) for ~Rs1bn, potentially yielding ~Rs6bn in value (~Rs100/sh upside). GOLI’s tie-ups with EV OEMs has resulted in traction for its EV fluids, however revenue contribution remains in low-single digit.
Outlook
We assign 16.5x target P/E multiple (~20% discount to Castrol’s 1-yr fwd consensus P/E) vs. 15.0x earlier, and raise our Mar-25E TP by 13% to Rs1,350/sh. We affirm BUY rating on GOLI.
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