Chennai plant to add capacity; diesel engine oil biz seeing growth: Gulf Oil Lubricants

Gulf Oil Lubricants reported a good set of third quarter numbers. The revenues were up 34 percent year on year (YoY) at Rs 355.9 crore versus Rs 264.9 crore. The YoY EBITDA was up 51 percent at Rs 61.6 crore versus Rs 40.8 crore. Margins were up at 17.3 percent as against 15.4 percent for the same quarter last fiscal. The volume growth in Q3 was 22 percent.

Ravi Chawla, Managing Director, Gulf Oil Lubricants said the volumes this quarter compared to same quarter last year look very good on back of base effect of demonetisation.

The volume growth usually trends around 11-12 percent, said Chawla. However, going forward hope to achieve closer to 22 percent growth.

The company has seen a double–digit growth in diesel engine oils, which is 35-40 percent of the portfolio, he said. It usually grows in single-digits.

Similarly, motorcycle which is around 14-15 percent has gone to 35 percent this quarter, said Chawla, adding that the demand scenario is very positive in the market.

Hope to maintain margins around 17-18 percent, said Chawla.
He said the company has added a new plant in Chennai, which will add capacity of 40,000 Kilo Litre (KL), which sets up the company to cater to new customers, and look at new segments which so far had lower presence.

Moreover, as distribution grows, they plan to add new products like greases, coolants, said Chawla.