Buy Gulf Oil Lubricants; target of Rs 1350: Emkay Global Financial

Emkay Global Financial is bullish on Gulf Oil Lubricants has recommended buy rating on the stock with a target price of Rs 1350 in its research report dated June 21, 2024.

Broker Research

June 21, 2024 / 14:19 IST

buy

Emkay Global Financial's research report on Gulf Oil Lubricants

Gulf Oil Lubricants (GOLI) hosted its FY24 analyst meet, reiterating core (exAdBlue) volume CAGR at 2-3x of industry growth (Kline estimates the Indian lubricant industry to clock 3% volume CAGR and 6% value CAGR over 2022- 32). The management presented its ‘Unlock 2.0’ strategy, which focuses on profitable growth in market share, rise in share of premium products via PCMO, EV fluids, synthetics, etc., and thrust on digital infrastructure, brand investments, and EV charging solutions. GOLI’s core EBITDA margin profile is expected at >14%, and core unit profitability is likely to be >Rs25/ltr going ahead.

Outlook

Double-digit growth in the B2B (industrial, infra, mining, fleet) segment is being driven by a dedicated sales team across sub-segments. We maintain BUY on GOLI and retain our 16.5x target P/E; Mar-25E TP stays at Rs1,350/sh.

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