Castrol India Limited — Q3 FY25 earnings call

It tells us 3 things. One, consumers love the brand Castrol, and they always wanted to have it, but they couldn't afford it. Second, when you make high-quality products available at an affordable price, new consumers start coming into the franchise.

Analyst questioned the impact of the essentials range on existing customers and the strategy for accessibility. Management clarified that the new range attracts new consumers and has minimal cannibalization, contributing to overall growth.

Asked by Harsh Maru

So for that, I think we have a sort of pricing strategy in place if we need to input into the market. But the input cost that we are already seeing a hit coming through is forex.

Analyst probed on the drivers of high 4Q EBITDA margins and how the company manages input cost volatility. Management explained the role of annual rebates, forex impact, and strategic pricing interventions, while reiterating margin guidance.

Asked by Hardik

So hopefully, I think in the second half of the year, towards the end of the year, we will be able to give you a more concrete answer on where we are and what our road map is for the liquid cooling.

Analyst sought an update on a new technology area. Management confirmed ongoing global and local efforts, including an R&D center, and projected significant market growth in India, but deferred a detailed roadmap to H2 FY25.

Asked by Karthik

India as a country that doesn't have an incentive like China does to drive EV penetration at the same speed because for us, whether it be EV charging batteries or fuel or the crude oil, everything is import at the moment. So internal benefit as the evolution of vehicle technology changes from ICE to hybrid to EVs, and we will have EVs coming in, in sectors such as look at the buses in the towns or cities, look at the 2-wheeler mobility that last-mile users or salesmen and women use, now those are kind of things which should become EV very, very quickly. Rest, I think next 15 to 20 years horizon, ICE engines will continue to remain relevant.

Analyst challenged the MD on joining a company perceived to be in 'terminal decline' due to EVs. The MD provided a strong counter-narrative, emphasizing slow EV adoption in India, the long runway for ICE, and diversification into new fluid technologies.

Asked by Ashwini Damani

So I think suffice it to say that we will have access to the best and the latest from the day it gets signed off and approved with our vendors and customers.

Analyst inquired about specific R&D investments for data centers and expected revenue. Management clarified that global R&D benefits India and that revenue generation is a longer-term play dependent on market evolution.

Asked by Vipulkumar Shah

B2C, we grew single digits; and B2B, we grew double digit.

Analyst sought granular growth data. Management provided a clear distinction, indicating stronger performance in the B2B segment.

Asked by Rohan Jadhav

We want to invest in inorganic. And in fact, for a matter of fact, as you must have seen, we have declared a special dividend of INR4.5, which is the highest ever as well, in line with our if we look at distributed cash to our shareholders.

Analyst asked about strategic investments in new energy areas. Management confirmed an appetite for inorganic growth and sufficient cash, but did not disclose specific plans.

Asked by Hardik

Yes. As long as it's Castrol brand, it will be in Castrol entity. But you know, I mean, these are matters of structuring, right? I mean, it's very difficult for me to say anything on that part.

Analyst sought clarity on whether new opportunities like EV and data center solutions would be housed within the listed Castrol India entity. Management confirmed that Castrol-branded opportunities would be in the listed entity but noted structuring complexities.

Asked by Gaurav Shah