CASTROLIND Next move around 30% in next 1 monthCompany is almost debt-free.
Company is expected to give a good quarter
Company has a good return on equity (ROE) track record: 3 Years ROE 51.80%
Company has been maintaining a healthy dividend payout of 76.95%
ABOUT
Castrol India Ltd is principally engaged in the business of manufacturing & marketing of automotive and industrial lubricants and related services.
KEY POINTS
Product Portfolio
The company manufactures and sells various kinds of oil lubricants and other fluids for cars, motorcycles, commercial vehicles and others.
Distribution Channels
The company's distribution network includes 350 distributors who service ~1 lakh customers and sub-distributors.
The company also serves ~3,000 key institutional accounts directly and from distributors.
Manufacturing Capabilities
The company owns and operates 3 manufacturing plants in India which are located in Patalganga (Maharashtra), Paharpur (West Bengal) and Silvassa (Union Territory).
Jio-BP Partnership
In July 2020, the company's ultimate promoter BP plc, and Reliance Industries Ltd started their Indian fuels and mobility JV, Reliance BP Mobility Ltd. BP has already paid RIL 1 billion USD for 49% stake in JV with RIL holding the rest 51% stake. The JV aims to become a leading player in India's fuels and mobility markets.
The JV has benefited the company as it began selling fuels and Castrol lubricants from RIL's existing retail outlets.
Strong Parentage
The company is owned by Castrol Ltd UK which is a globally trusted multinational brand.
Castrol products are sold in more than 150 countries and it is a preferred lubricants partner for Volkswagen, Audi, BMW, Komatsu and many other businesses.
It was acquired by BP Plc in 2002 which is one of the 7 oil supermajors in the world.
Royalty Terms
For the use of the brand "Castrol", the company pays Castrol Ltd, U.K. (promoter) royalty @ 3.5% on annual turnover subject to a cap of 10% on profit before tax (PBT).
It paid ~80 crores and ~112 crores in royalty to Castrol Ltd U.K. in FY20 and FY19 respectively.
