Robust financial delivery with the right strategies in place will see the company move ahead despite the slowdown triggered by the second wave of the pandemic
Castrol India Ltd. reported a strong financial delivery in Q1 2021 building on a resilient second half performance for FY 2020. The company delivered robust revenue and profit growth with Q1 revenue from operations at Rs. 1,139 crore (66% higher) and Q1 profit before tax at Rs. 332 crore (96% higher) versus Q1 2020 which saw the onset of the pandemic and resultant business slowdown beginning March 2020. Focused investments, interventions and actions taken in the second half of 2020 towards brand-building with increased marketing and advertising spends, new product introductions as well as corrective pricing have yielded a positive impact on overall top-line growth.
This has been aided by improving demand trends especially in tractor and SUV sales in Q1 2021. “Strengthening our network and expanding our footprint, as well as building our participation in digital market platforms, we entered into a strategic collaboration with Ki Mobility Solutions Private Ltd. to supply lubricant products to Ki Mobility workshops in India and also be available on goBumpr, their digital platform. Our cost efficiency programmes and judicious working capital management efforts led to healthy cash from operations at Rs. 269 crore in the quarter, which is equivalent to 1.1 times of profit after tax,” said Sandeep Sangwan, Managing Director, Castrol India Ltd.
According to a statement issued by Castrol India, the company will continue to focus on fundamental building blocks to deliver sustainable profitable growth keeping the safety of its teams as top priority. Its plants continued to operate safely deploying pandemic-related safety processes and guidelines as laid out by local governments. Castrol India’s Patalganga plant won recognition from the National Safety Council for the second consecutive year for its strong safety performance. “The second wave of the pandemic in India is resulting in a market slowdown in various parts of the country. In addition, supply disruptions on account of base oil and raw materials availability, logistics challenges and rupee depreciation are likely to adversely impact demand and supply. The management is keeping a close watch on the situation and responding with appropriate actions as needed,” Sangwan said.