While vol growth moderated to 7.5%, it remains well ahead of the industry. Realisations at Rs 149/KL grew 5% YoY due to better product mix and price hike taken in Mar-19. Revenue/EBITDA/PAT grew by ~13/21/21% YoY. Gross margins at 48.8% expanded 280bps YoY due to higher growth in the PCMO segment and stable commodity prices. However, this was partially offset by increased other expenses (+22% YoY) due to higher ad spends (cricket world cup).
Outlook1QFY20 operating performance was healthy as EBITDA margins expanded ~120/70bp YoY/QoQ to 17.7% driven by an improved product mix. We expect Gulf Oil to deliver 3-4x the industry growth as the co expands into new segments and ramps up its distribution reach. We have a TP of Rs 1,050 based on 22x FY21 EPS.
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