Buy Gulf Oil Lubricants; target of Rs 1800: Emkay Global Financial

Emkay Global Financial's research report on Gulf Oil Lubricants

We reiterate our positive stance on GOLI, led by steady core volume growth (8% core volume CAGR over FY24-27E, over 2x of industry growth), and a 13- 14% EBITDA margin profile supported by premiumization efforts, brand building, input cost management, and dedicated marketing initiatives. Deepening of OEM relationships, expanding industrial customer base, and B2C remain key focus areas. GOLI’s EV charging foray is driven by plans to double Tirex’s turnover annually for the next 3-4 years, with 5Y revenue target of Rs5- 7bnpa, combined with long-term margin profile similar to that of GOLI’s core business.

Outlook

We keep FY25-27E EPS intact and Sep-25E TP unchanged at Rs1,800, assigning 20x target P/E on the back of consistent volume-earnings growth run-rate, premiumization focus, and healthy dividend yield of ~4%.