Gulf Oil Lubricants India Ltd's Q2FY19 standalone net profit declines 0.32% yoy to Rs40.3cr : In-line with Estimates

The company’s standalone revenue stood at Rs417.21cr, up 29.19% yoy and 6.88% qoq.

Nov 12, 2018 06:11 IST India Infoline Research Team

Gulf Oil Lubricants India Ltd Q2FY19

Standalone Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 417.21 29.2
EBITDA 71.41 15.3
EBITDA Margin (%) 17.1 [205]
Net Profit (adjusted) 40.29 [0.3]
***EBITDA margin change is bps
Gulf Oil Lubricants India Ltd's revenue for the quarter came in at Rs417.2cr, up by 29.2% yoy. The operating profit for Q2FY19 came in at Rs71.4cr, which increased by 15.3% yoy. EBITDA margin declined by 205bps yoy to 17.1% yoy, however, increased ~59bps qoq in Q2FY19. The net profit after tax for the quarter stood at Rs40.3cr, which remained flattish on yoy basis. The operating profit beat the consensus estimate of Rs60cr by 19%. However, the net profit is in-line with consensus estimate due to higher than expected finance cost during the quarter.

• Gulf Oil Lubricants India achieved growth in volumes of 30% yoy in Q2FY19. Its core business witnessed an overall volume growth of 22% yoy during the quarter. There has been double-digit volume growth across product categories like Diesel Engine Oils (DEO), Passenger Car Motor Oil (PCMO) and Motorcycle Engine Oil (MCO).
• The core volume growth of 22% yoy beat the industry volume growth by more than four times during the quarter.
• New OEM tie-ups and other B2B customer acquisitions have also aided volumes across all focus segments, leading to an increase in market share.
• Gross margin declined by ~427bps yoy to 44.9% in Q2FY19 on account of likely fluctuation in base oil prices and rupee depreciation resulting into a lag on cost push towards customers.
• Finance cost increased to ~Rs5.6cr in Q2FY19 vs. ~Rs2.2cr in Q2FY18. The short term borrowing has increased to Rs314.7cr as on September 30, 2018 as against Rs248.1cr as on March 31, 2018.
• The effective tax rate of the company remained unchanged during the quarter as against previous year at 35%.
• Management, in its press release, has stated that the net profit during the quarter has been impacted by during the quarter mainly due to:
o forex losses (largely MTM on unhedged foreign currency exposures) on steep rupee depreciation
o higher depreciation yoy for its recently commissioned Chennai plant.

Technical View:

Gulf Oil Lubricants India Ltd is currently trading at Rs. 760, down by 0.15 points or 0.02% from its previous closing of Rs. 760.15 on the BSE.
The scrip opened at Rs. 752.05 and has touched a high and low of Rs. 761.05 and Rs. 750 respectively. So far 25,182 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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