Gulf Oil Lubricants India Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Gulf Oil Lubricants India Limited delivered a robust Q1 FY26, marked by record financial performance and strong volume growth across its key segments, significantly outpacing industry averages. The company's strategic focus on capacity expansion, emerging EV and AdBlue businesses, and distribution network growth positions it for sustained future growth. Management expressed confidence in maintaining healthy margins and continued market leadership.

Highlights

  • Achieved highest ever quarterly volume, revenue, and EBITDA in Q1 FY26.

  • Consolidated quarterly revenue crossed ₹1,000 crore for the first time.

  • Reported double-digit volume growth of 11%, significantly outperforming the industry's 3%-3.5% growth.

  • EBITDA margin stood at 12.7%, within the guided band of 12%-14%, with gross margin improving by nearly 140 basis points YoY.

  • Core lubricant volume was 41,000 KL, and AdBlue volume was 38,000 KL.

  • EV charger subsidiary Tirex grew over 163% to nearly ₹24 crore turnover this quarter and turned EBITDA positive.

  • Board approved capacity expansion from 140 million to 240 million in Chennai and Silvassa plants with an outlay of ₹55 crore.

  • Declared a final dividend of ₹28 per share, maintaining a net debt-free status with over ₹1,000 crore cash balance.

Key financials

  1. Consolidated Revenue ₹1,000 Cr
  2. Volume Growth 11%
  3. EBITDA Margin 12.7%
  4. Core Lubricant Volume 41,000 KL
  5. AdBlue Volume 38,000 KL
  6. Battery Business Turnover ₹16 Cr

What they filed

Q1 FY27: revenue up 32.5%, net profit up 32.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue849 905 915 996 957 +13%998 +10%1,040 +14%1,320 +33%
EBITDA107 122 124 127 118 +10%130 +7%135 +9%170 +34%
Net profit84 98 92 97 87 +4%77 −21%90 −2%128 +32%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Capacity

  • Total Capacity Capacity · by March 2027 · High confidence 240 million
    By March 27, we should be ready with this 240 million capacity.

    — Manish Gangwal

Capex

  • Capacity Expansion Outlay Capex · High confidence ₹55 crore
    An outlay of Rs. 55 crore has been earmarked for this.

    — Ravi Chawla

Margin

  • EBITDA Margin Band Margin · High confidence 12%-14%
    At EBITDA level, we have still delivered 12.7% for the quarter, which is well within our guided band of 12%-14%.

    — Manish Gangwal

Volume

  • AdBlue Volume Growth Volume · full year basis, next few years · Medium confidence 10%-15%
    Overall, we believe that on a full year basis, we will continue to grow 10%-15% in AdBlue.

    — Manish Gangwal

  • Tirex Turnover Growth Volume · every year · Medium confidence almost double turnover
    We really want to almost double our turnover every year in that segment.

    — Manish Gangwal

  • Lubricant Business Growth Rate Volume · more than 15-20 years · High confidence 3%-4%
    the lubricant business will continue to grow at 3%-4% in India for at least more than 15-20 years.

    — Manish Gangwal

Revenue

  • Tirex Topline Revenue · next 4-5 years · Medium confidence ₹400-₹500 crore
    Our endeavor is that which we earlier highlighted also that we want this business to be Rs. 400-Rs. 500 crore business in terms of topline in the next 4-5 years.

    — Manish Gangwal

Other

  • A&P as % of Revenue Other · High confidence 3%-4%
    It is in the range of 3%-4% which we have been guiding.

    — Manish Gangwal

Profitability

  • EV Business EBITDA % Profitability · next 3-4 years · Medium confidence similar to lubricant business
    We are quite hopeful that with the increase in revenues we will be able to achieve the similar EBITDA percentage as lubricant in next 3-4 years.

    — Manish Gangwal

Market Share

  • Distribution Increase Market Share · Medium confidence 10%-15%
    With our brand strength, we believe we need to increase our distribution, which we are also doing by 10%-15%.

    — Ravi Chawla

Risks & concerns

  • Crude oil price volatility impacting base oil prices

    medium

    Management noted base oil was steady in Q1 but acknowledged that if crude sustains below $70, base oil might soften mid-term.

    Analyst acknowledged

  • Increased competition in the lubricant market

    medium

    Management stated that competitiveness is part of their strategy and they will continue to focus on their strengths and initiatives, while also calibrating A&P spend based on competitive scenario.

    Analyst acknowledged

  • Geopolitical risks impacting partners (Nayara tie-up and US sanctions on Russia)

    low

    Management stated that Nayara tie-up is a very small portion of overall volumes and the impact on Gulf is small, but they are closely watching the situation.

    Analyst acknowledged

Areas of evasion (2)

  • Specific strategy for AdBlue beyond reporting separately
  • Detailed plans for data cooling products

Q&A highlights

3 direct
Capacity Expansion and Product Mix Flexibility Direct
The capacity expansion is in line with what we are doing, but projecting that we are growing in various segments, obviously there will be some flexibility on the product mix in terms of our manufacturing filling lines.

Clarifies that the significant capacity expansion is not for a product mix shift but to support growth across existing segments with manufacturing flexibility.

Asked by Nikunj Doshi

EV Charger Business (Tirex) Profitability and Growth Targets Direct
This quarter, they have turned EBITDA positive, which is a very good sign. And the quarterly turnover, as Ravi highlighted, has grown 163% to nearly Rs. 24 crore. So, overall, it is in a positive & right direction, but it is still very small in terms of base and we will have to really watch out. In the longer term, of course, we want the business to deliver almost similar EBITDA range to what lubricant business is.

Asked by Angad

AdBlue Volume Growth and Q1 Flatness Direct
Last year quarter 1, we had some special promotion schemes which were not there in this quarter so that is why it is looking flattish, but overall our trajectory and the objective is to keep growing this at 10%-15% for the next few years.

Asked by Angad

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance and Market Outperformance

Gulf Oil Lubricants reported its highest ever quarterly volume, revenue, and EBITDA in Q1 FY26. The company achieved a robust 11% double-digit volume growth, significantly outpacing the industry's 3%-3.5% growth. Consolidated quarterly revenue surpassed ₹1,000 crore for the first time, driven by strong performance across B2C, OEM franchisee workshops, and B2B industrial segments, which all recorded double-digit growth.

Margin Expansion and Financial Health

The company demonstrated improved profitability, with gross margins expanding by nearly 140 basis points year-on-year. Despite increased A&P spending due to IPL campaigns and motorcycle range promotions, the EBITDA margin stood at 12.7%, comfortably within the guided band of 12%-14%. Gulf Oil Lubricants remains net debt-free, with a healthy cash balance exceeding ₹1,000 crore, and declared a final dividend of ₹28 per share.

Strategic Capacity Expansion and Future Growth

To support its aggressive growth trajectory, the Board approved a significant capacity expansion from 140 million to 240 million in its Chennai and Silvassa plants, with an earmarked outlay of ₹55 crore. This expansion is expected to be completed by March 2027, providing the necessary flexibility and efficiency to meet projected demand, as the company is currently operating at 100% capacity and utilizing third shifts for some products.

Emerging Business Segments: EV Chargers (Tirex) and AdBlue

The EV charger subsidiary, Tirex, showed promising growth, with its quarterly turnover increasing by 163% to nearly ₹24 crore and turning EBITDA positive for the first time. Management aims to double Tirex's turnover annually, targeting ₹400-500 crore in topline within the next 4-5 years, eventually achieving similar EBITDA margins to the lubricant business in 3-4 years. The AdBlue business, while flattish in Q1 due to prior year's special promotions, is projected to grow 10%-15% on a full-year basis for the next few years.

Segment-Specific Growth Strategies

Gulf Oil Lubricants continues its segment-wise approach, aiming for 2x growth in strong segments like motorcycle and diesel engine oil, and 3x+ growth in segments with less than 5% market share, such as passenger cars and industrial lubricants. The company is also expanding its distribution network by 10%-15%, leveraging partnerships like Nayara to increase reach across its 1,500 current outlets, with a focus on both urban and rural markets.

Sustainability and Product Innovation

The company highlighted its commitment to sustainability with the Silvassa plant achieving IGBC platinum certification. Product innovation remains a focus, exemplified by the relaunch of Gulf Pride motorcycle oil with API SP specification and new packaging, which contributed to strong double-digit growth in the B2C segment. Gulf Oil Lubricants is also preparing for BS7 norms, ensuring its product portfolio is ready for future regulatory changes.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Oil, Gas & Consumable Fuels earnings calls