In order to unlock value for the stakeholders, in April 2014, GOLIL was formed as a separately listed pure play lubricants company through the demerger of the Lubricants Division of Gulf Oil Corporation Limited.
Lube Industry and Business Overview
Today, India is the 3rd largest and also one of the fastest-growing lubricants markets in the world. It is a highly competitive market with the presence of nationalized oil companies, numerous multinational companies, and unorganized players. Broadly, the Indian market can be segmented into three major categories – Automotive, Industrial including marine applications and Process oils /White oils.
GOLIL operates mainly in the Automotive and Industrial segments with a leading presence as one of the top players in the open market (B2C/Bazaar channel) through the distributor network and also directly supplies to OEMs & other B2B customers (Industries, Infrastructure, Mining & Fleet Customers, State transport and Government Undertakings). The company has over 7% market share in the Bazaar/replacement market and an estimated 5% share in the overall Auto & industrial lubricants market.
GOLIL manufactures and markets a complete range of lubricants used in automotive, industrial and marine applications. These products have approvals from bodies like API, JASO, ACEA and have been approved by leading OEMs globally.
With 10-12% CAGR volume growth in the last decade, GOLIL has recorded more than 3x-4x times growth of the lube industry. The strategy to build its brand & reach and offer products with differentiated value propositions has enabled the company to record one of the fastest volume growths amongst the top lube players.
Alliances with OEM and B2B Customers
GOLIL works in close coordination with several OEMs and has adopted & pioneered several go-to-market models in the automotive industry, including genuine oils, co-brand oils and approved oils. Some of the company’s OEM partners include Ashok Leyland, Mahindra, Swaraj, Bharat Benz, Schwing Stetter, Tata Motors, Force Motors, Kobelco, Piaggio & Bajaj.
The company provides customized service and technical solutions to its B2B customers and has thus built strong-long standing relationships with its customers in the Infrastructure Mining and Fleet Segment, with volumes growing at above 20% on a yearly basis in this focused vertical formed in 2008. It supplies lubricants to more than 300 prestigious B2B customers like L&T, JSW, etc.
Brand Initiatives
Besides leveraging Gulf Oil International’s global motorsports associations in India, GOLIL built the Gulf brand in India around the cricketing platform — by sponsoring teams in the Indian Premier League and appointing the Indian team captain Mahindra Singh Dhoni as the brand ambassador. Famous cricketer Hardik Pandya was appointed as the company’s 2nd brand ambassador in 2018. Consistent investment in the brand has resulted in strong brand awareness and usage of the Gulf Brand in India.
Based on an internal market research extensively covering a wide reach of consumers, mechanics and retailers, ‘Gulf’ oil brand is positioned amongst the Top 3 lubricant brands in terms of brand awareness, purchase consideration and other parameters as well.
Gulf Oil International’s global partnerships with McLaren and other associations are being leveraged by Gulf Oil in India.
Long Drain Prowess
The company has pioneered Long Drain Lubricants for the Commercial Vehicles Segment and established strong positions in Diesel Engine Oil and 2 Wheeler Motor Oil segments.
Gulf Oil’s global R&D center of excellence is situated in Chennai, India which helps the company in providing customized solutions as per Indian conditions.
Network & Operations
The company has two fully automated, ISO certified Blending plants with a capacity of 140000 KL situated in Chennai (South India) and Silvassa (Western India). It has a Pan India network of 300+ Auto distributors, 50+ Industrial Distributors and over 75000 touchpoints, 300+ marquee customers in B2B, Infra, Mining & Fleet, backed by the logistics support of ~30 depots, 4 regional offices and corporate office in Mumbai.
Electric Vehicle Threat — and mitigation
As the world is moving towards cleaner energy sources, the electric vehicle sector in India is gaining traction and is expected to grow faster in the coming years. The evolution of EVs in India is taking a different path when compared to the western countries, USA and even China. Major thrust in India is coming from e-three wheeler and e-two wheelers (personal and delivery fleet), followed by eBuses and Govt Cars. EVs especially eCars are not yet preferred by personal buyers due to charging and range anxiety issues, and eCommercial Vehicles are still not viable — several hurdles to overcome.
At the same time Lube market is expected to continue to expand at 2%+ CAGR in the next 15- 20 years horizon as per many industry experts — so the company don’t expect any demand compression for the lubricants industry in this time frame.
Few points to note from GOLIL’s points of view —
– Product Mix — Commercial Vehicle Oils 45%, Personal Mobility Oils 22-25% (Motorcycle 18-20%, Passenger Car 4-5%), Industrial 15% and Other gear Oils and greases 15%
– Personal Mobility (engine oils) will have some impact from EV conversion, but even in a 30-40% conversion scenario, the balance demand will be greater than current levels due to overall increase in market of ICE 2W/4W.
– 3W/ E-Rickshaw’s mainly use unbranded oils, so its rapid conversion to electric doesn’t have much impact on branded cos like us
– Limited/ No impact on Brake Fluids, Greases, etc. in others. Coolants (eFluids) will be required in EVs and Company has full range of the same already launched.
– Not much impact expected in CVO segment— which is 45% of its business (Buses are mainly state run/ tender based — not our target segment)
– With manufacturing push, the industrial segment shall continue to grow at a higher growth rate — 15% of its business
– Overall in the 15-20 year horizon it expects lubricants business to grow well — Gulf with its strong business model and capabilities is poised to grow in size and scale, and seize new opportunities to gain market shares across different segments
– The Lubricant Business is a High Cash Conversion business and is expected to continue the same.
EV Fluids
In 2021, the company has launched an innovative range of EV fluids that align with the new needs of mobility for hybrid and fully electric vehicles globally and in India. It looks forward to exploring this sector further in the coming years.
Entering E-Mobility Sector
While the lubricants market will continue to grow for atleast next 15-20 years as explained above, the company are focused on creating our foothold in the e-mobility space while looking at opportunities that synergise with its brand, distribution, OEM/ Infra-B2B customer relationships in India. The intention of the company is to stay ahead of the curve in order to cater to the evolving market and consumer requirements in this sector with very strong technology driven products. At present, it has two tie-ups through equity stake into Indra Renewable Technologies and ElectreeFi are enabling us to provide superior solutions related to Electric Vehicle Charging, EV Fleet Management and Battery Swapping.
Indra Renewable Technologies — EV Charging
In 2021, Gulf Oil Lubricants India also made its first strategic move in the EV charging space along with Gulf Oil International and the UK Government’s Clean Growth Fund as we co-invested in Indra Renewable Technologies, a UK based fast-growing EV and smart energy technology company. At present Indra manufacturers residential smart chargers (5% market share in UK) and bi-directional Vehicle to Grid(v2G) chargers for the Car Segment. Through this partnership, it has gained exclusive rights to the use of Indra’s technology for EV charging in India and work is on to assess the best way to bring these products into India as part of the EV value chain.
Techperspect Software Pvt Ltd (ElectreeFi) — E-Mobility SaaS Solutions
Recently, it has announced our second move in this sector with a strategic 26% equity investment in Techperspect Software Pvt Ltd (ElectreeFi) a leading E Mobility SaaS Solutions company. Techperspect, well known for its Brand ElectreeFi, are primarily a SaaS provider having expertise in the implementation of IoT based eMobility Solutions. They have created IoT based eMobility Technology Platforms that has various components and offerings both for businesses and end customers in the Electric Vehicle (EV) domain in association with the leading stakeholders in the Indian industry including OEM’s, EV charging networks and EV battery related companies. As a strategic investment, this partnership will ensure that Gulf Oil and ElectreeFi can work together to develop solutions leveraging their strengths and play a future role in the fast-changing eMobility space for two and three wheelers and cars to start with.
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