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    Castrol India Limited

    CASTROLIND
    Oil, Gas & Consumable Fuels·29 Apr 2026
    Management Summary

    Castrol India delivered a strong Q1 FY26, achieving 9% revenue growth and 7% EBITDA growth, marking its 12th consecutive quarter of stable performance. Growth was driven by robust rural expansion and double-digit growth in premium brands and industrial segments. However, the company acknowledges increasing macro uncertainty, geopolitical headwinds, and rising raw material costs, which are expected to impact margins more significantly from Q2.

    Highlights

    10

    • Revenue of ₹1,545 crores, up 9% YoY.

    • EBITDA of ₹329 crores, up 7% YoY.

    • PAT of ₹242 crores, up 4% YoY.

    • Overall volume growth of 7-8% for the quarter.

    • Gross profit grew about 11%.

    • Rural portfolio growing at high double-digit rate, with distribution expanded to 40,000 outlets and 700 Rural Service Express added.

    • Premium brands portfolio delivered double-digit volume and value growth.

    • Industrial business continues double-digit growth.

    • Signed MoU with HPCL to explore Re-Refined Base Oil ecosystem.

    • Strong cash flows and a robust balance sheet maintained.

    Concerns

    5

    • Continued macro uncertainty and early signs of external headwinds from Middle East conflict.

    • Currency movements and raw material prices have started to reflect impact.

    • Geopolitical developments impacting operations, leading to increased pressure on sourcing costs and unpredictability of lead times.

    • EBITDA margin at ~21% for Q1, slightly below the target range of 21-24%, with short-term volatility expected.

    • Raw material price increases are expected to show up more significantly from Q2 onwards.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹1,545 Cr+9%YoY
    2. 02EBITDA₹329 Cr+7.0%YoY
    3. 03PAT₹242 Cr+4%YoY
    4. 04EBITDA Margin21.3%
    5. 05Volume Growth0.075 yoy_pct

    Capital allocation

    1
    medium confidence
    CategoryHeadline
    Liquidity

    Liquidity disclosed

    The company continues to maintain strong cash flows and a robust balance sheet.

    Guidance & targets

    3
    CategoryTargetPriority
    Profitability
    Operating EBITDA Margin
    21-24%
    		High
    Profitability
    Operating EBITDA Margin
    21-24%
    		High
    Operating Expense
    One-time costs
    Go down
    		Medium

    What to watch in Q1 FY27

    5

    Raw material cost impact on COGS

    Q2 FY26
    CurrentMinimal impact in Q1 due to inventory cycle
    TargetIncreased impact on COGS from Q2 onwards

    Why it matters

    This will directly affect gross margins and overall profitability, as management indicated the full effect of rising raw material prices will be visible.

    But 2Q onwards, even the raw material prices will start showing up.

    Risks & concerns

    5
    RiskSeverity

    Macro uncertainty

    Continued macro uncertainty observed during the quarter. — Management acknowledged

    medium

    Geopolitical conflict (Middle East)

    Early signs of external headwinds driven by the conflict in the Middle East, impacting currency movements and raw material prices. — Management acknowledged

    high

    Raw material price inflation

    Raw material costs increased, with significant impact expected from Q2 FY26 due to inventory cycles. — Management acknowledged

    high

    Sourcing pressure and lead time unpredictability

    Increased pressure on sourcing, both in terms of cost and unpredictability of lead times due to geopolitical situation. — Management acknowledged

    medium

    Margin volatility

    Short-term volatility in margins is expected due to rising costs, though structural margins are aimed to be maintained. — Management acknowledged

    medium

    Q&A highlights

    8

    “Now in quarter 1, you are very fair in asking whether it indicated impacted my cost or not. Given the inventory cycle, we saw minimal impact of these raw material increases into the COGS that we reported in quarter 1. I spoke about it in my comments. The currency fluctuation definitely impacted us. Many of these are imported for us and we pay in dollar, and the dollar rate versus last year is down -- I mean, the rupee is down by about 6.5%, 7% versus same period last year. So, to that extent, my COGS in Q1 was impacted, but the majority of the cost increases that we are talking about, we are now pending 2Q. But our strategy is relatively simple. Saugata spoke about it. Top priority is to secure our customers, and make sure that the entire pipeline that goes into making the final product is ready. And we are really working on that with urgency. Saugata spoke about it. We will have diversified supplier network so that we can minimize any supply gap. ... Structurally, the objective of the company is we want to maintain our structural margins in the medium to long term. In the short term, we may see a little bit of [inaudible 0:12:11]. Long term, we want to go back. Saugata spoke about it. We had [inaudible 0:12:15] at the beginning of April, actually towards the end of March. [inaudible 0:12:20].”

    Addresses a key investor concern about rising input costs and the company's strategy to manage margins through pricing and cost control.

    asked by Nitin Tiwari

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

    Castrol India reported its 12th consecutive quarter of stable revenue and volume growth in Q1 FY26. Revenue increased by 9% YoY to ₹1,545 crores. EBITDA grew 7% to ₹329 crores, and Profit After Tax (PAT) rose 4% to ₹242 crores. The company achieved an overall volume growth of 7-8% for the quarter, with gross profit growing approximately 11%.

    02

    Strategic Focus on Rural, Premium, and Industrial Segments

    The rural portfolio continues to be a strong growth driver, expanding at a high double-digit rate. Distribution has been extended to 40,000 outlets, and 700 Rural Service Express points have been added, catering primarily to bikes. In urban markets, the premium brands portfolio delivered double-digit volume and value growth. The industrial business also maintained its strong performance with double-digit growth for multiple quarters.

    03

    Raw Material and Margin Outlook

    The company's COGS in Q1 saw minimal impact from recent raw material price increases due to inventory cycles, though currency fluctuations did affect costs. However, management anticipates that the majority of cost increases, particularly from crude oil and packaging materials, will reflect from Q2 FY26 onwards. While Q1 EBITDA margin was around 21%, the company aims to maintain its structural operating EBITDA margin within the 21-24% range in the medium to long term, despite expected short-term volatility.

    04

    Geopolitical Impact and Sourcing Strategy

    The evolving situation in the Middle East has introduced macro uncertainty🌐, leading to increased pressure on sourcing costs and unpredictability of lead times for key inputs like feedstocks. Castrol India maintains a diversified sourcing strategy globally, importing a percentage of base oil from regions like Singapore and South Korea for specific quality requirements, alongside domestic sourcing. A 60-day hedging policy is in place for approximately half of the imported COGS to mitigate currency risks.

    05

    EV and Auto Care Portfolio Expansion

    Castrol India is actively preparing for the future of electric vehicles (EVs) through partnerships, such as with Ather Energy for 2-wheelers and Tata Mobility for transmission fluids in EV vehicles. The company is also expanding its Auto Care portfolio and has signed an MoU with Hindustan Petroleum Corporation Limited (HPCL) to explore the Re-Refined Base Oil ecosystem in India, aiming to enhance sustainability and supply chain resilience.

    06

    Data Center Opportunity

    The company is engaged in trials for cooling solutions in the emerging data center market, working closely with developers and OEMs. While acknowledging the competitive and fast-evolving nature of this space, management views it as a long-term opportunity. Products deployed in trials are already used globally, but specific market size or contribution guidance is not yet available due to the preliminary stage of development and long capital investment cycles.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.