ICICI Securities's research report on Gulf Oil Lubricants India
Gulf Oil (GOLI) delivered 8.9%/9.8% YoY growth in EBITDA/PAT to INR 1.27bn/INR 0.97bn (I-Sec: EBITDA/PAT INR 1.28bn/INR 0.99bn). Better product/segment mix and premiumisation drove gross margin up 140bps YoY; however, higher advertisement and promotional expenditure drove decline in EBITDA margin to 12.7%, down 40bps YoY and below I-Sec’s estimate of 13.5%. Double-digit growth in mobility and B2B segments with steady AdBlue volume reflected in core lubricant/AdBlue volume of 41mn/38mn litres (+10.8/+flattish YoY in line with I-Sec est.). We remain positive on GOLI’s prospects over the next 2–3 years, given steady volume growth, stronger margins and limited threat from EVs, at least, for the next 3–5 years.
Outlook
Valuation of 12.4x FY27E PER/8.8x EV/EBITDA remains quite attractive. Maintain BUY with a TP of INR 1,715 (unchanged).
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