Gulf Oil Lubricants India Limited — Q2 FY26 earnings call

Call held 6 Nov 2025

Management summary

Gulf Oil Lubricants delivered a robust Q2 and H1 FY26, marked by strong volume growth across key segments like B2C, rural, and OEM franchisee workshops, significantly outperforming industry averages. The EV charging business, Tirex, showed exceptional growth, reinforcing its strategic importance. While profitability was slightly impacted by rupee depreciation and a one-time forex loss, management remains confident in achieving its 12-14% EBITDA margin band and 2-3x market growth, driven by positive H2 market dynamics and strategic initiatives. Cash flow generation was lower due to seasonal factors.

Highlights

  • Q2 Lubricants volume grew 9.5% to 40,500 KL, significantly outpacing the market's 3% growth.

  • H1 FY26 saw double-digit volume growth for lubricants (10.1%) and revenue growth of 12.6%.

  • AdBlue volume surged 24% in Q2 to 36,000 KL, with H1 growth at 10.4%.

  • Tirex, the EV charger subsidiary, reported H1 revenue of Rs. 42 Cr, a 75% growth YoY, with a target of Rs. 300-400 Cr top line in 3-4 years.

  • Q2 EBITDA grew 10.56%, contributing to double-digit H1 EBITDA growth, despite a Rs. 6 Cr mark-to-market forex loss impacting PAT (3-3.5% growth).

  • The company maintains its EBITDA margin guidance in the 12%-14% band, expecting improvement in H2.

  • Cash flow from operations for H1 FY26 was Rs. 24 Cr, a significant decrease from Rs. 131 Cr in the prior year, attributed to seasonal impacts.

Key financials

3 periods

Headline

  • Lubricants Volume
    40,500 KL
    YoY +9.5%
  • AdBlue Volume
    36,000 KL
    YoY +24%
  • EBITDA Growth
    10.6%
  • PAT Growth
    3%

Q2

  • Mark-to-market Forex Loss
    ₹6 Cr

H1

  • Revenue Growth
    12.6%
  • Lubricants Volume Growth
    10.1%
  • AdBlue Volume Growth
    10.4%
  • EBITDA Margin
    12.3%
  • Tirex Revenue
    ₹42 Cr
    YoY +75%
  • Cash Flow from Operations
    ₹24 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.

Segment breakdown

  • B2C Personal Mobility
    — Growth
  • Agri Sector
    — Growth
  • B2B (Industrial, Infrastructure, Mining)
    — Growth
  • OEM (Franchisee Workshops)
    — Growth— Volume

Guidance & targets

Profitability

  • EBITDA Margin Profitability · full year · Medium confidence 12% to 14%
    Margin-wise, we always keep guiding that our EBITDA margin will be in a band of 12% to 14%.

    — Manish Gangwal

  • EBITDA Margin Profitability · H2 · High confidence 12% to 14%
    We continue to hope to deliver our 12% to 14% band of margin and grow 2x to 3x the industry.

    — Ravi Chawla

Volume

  • Market Growth Multiplier Volume · ongoing · High confidence 2 to 3x
    We will continue growing 2 to 3x. In some segments, obviously, we have low market share, we try to grow, and that's how the overall growth comes to 2 to 3x.

    — Ravi Chawla

Revenue

  • Tirex Top Line Revenue · 3-4 years · High confidence Rs. 300-400 Cr
    There is a good trajectory, we see as we have been talking about it, that we see this business as a Rs. 300-400 Cr top line at least in 3-4 years' time.

    — Manish Gangwal

Capex

  • Tirex Investment Capex · H2 · High confidence Rs. 38 Cr
    Our holding will go up from 51% to 65% in Tirex Transmission. Overall, a very strong quarter on operational side with a little headwind of rupee. We would like now to take some questions from investors, please. Thank you.

    — Manish Gangwal

Risks & concerns

  • Rupee depreciation and forex volatility

    medium

    A 3.5% rupee movement in Q2 led to a Rs. 6 Cr mark-to-market forex loss, impacting PAT. Management notes that forex volatility can affect margins.

    Management acknowledged

  • Crude oil price movement and base oil supply challenges

    medium

    Crude oil price volatility and global demand/supply challenges in base oil markets can impact margins, although some reduction in base oil prices was observed in October.

    Management acknowledged

  • Seasonally impacted cash flow generation

    low

    Q2 is typically a monsoon quarter with lower vehicular movement and construction, leading to elongated collection cycles and lower cash flow from operations (Rs. 24 Cr in H1 vs Rs. 131 Cr last year).

    Management acknowledged

Areas of evasion (1)

  • Tirex valuation details

Q&A highlights

2 direct
EBITDA margin target for the full year and cash flow generation from operations. Partial
Margin-wise, we always keep guiding that our EBITDA margin will be in a band of 12% to 14%... This is a seasonally impacted quarter in terms of collections because vehicular movement is low, construction activities are slower. Obviously, the collection cycle is slightly elongated in this quarter -- in the second quarter usually.

Directly addresses core profitability and operational efficiency concerns, highlighting seasonal impacts on cash flow and providing context for the significant drop in H1 cash flow from operations.

Asked by Varun from Equitree Capital

Tirex valuation, future outlook, and revenue guidance for the next 2-3 years. Direct
Valuation-wise, we don't want to comment. But obviously, in the last 2-2.5 years of our acquisition, there has been a good progress in Tirex overall... There is a good trajectory, we see as we have been talking about it, that we see this business as a Rs. 300-400 Cr top line at least in 3-4 years' time.

Provides specific revenue targets for a key growth segment and context on its performance since acquisition, offering insight into the company's strategic vision for its EV charging business.

Asked by Sabri from Emkay Global Financial Service

Treasury loans, significant cash on books, and foreign exchange borrowings. Direct
These are treasury loans given and to non-related parties. We received it back at the half year end... We have been keeping a surplus is always as a sort of strategy to have war chest where we are looking at EVs in as a global foray and more looking at opportunities in EV space, particularly of acquisitions.

Clarifies the company's treasury management strategy, the purpose of its significant cash reserves (Rs. 1,100 Cr), and the nature of its foreign currency borrowings, which are primarily buyer credit for imports.

Asked by Parin Jhaveri from JNJ Holdings

2 min read 5 chapters

Detailed narrative

Robust Q2 & H1 FY26 Performance Outpacing Market Growth

Gulf Oil Lubricants delivered a strong Q2 FY26, with lubricants volume growing 9.5% to 40,500 KL, significantly outperforming the overall market growth of 3%. For H1 FY26, the company achieved double-digit volume growth of 10.1% for lubricants and a 12.6% increase in revenue. This robust performance was driven by healthy double-digit growth across key segments including B2C Personal Mobility, the rural/agri sector, B2B (industrial, infrastructure, mining), and OEM franchisee workshops.

AdBlue and EV Charging Business (Tirex) Show Significant Momentum

The AdBlue segment continued its strong trajectory, with Q2 volumes surging 24% to 36,000 KL, contributing to a 10.4% growth for H1. The EV charger subsidiary, Tirex, demonstrated exceptional growth, reporting H1 revenue of Rs. 42 Cr, a 75% increase compared to Rs. 24 Cr in the previous year. Management has a clear strategic vision for Tirex, projecting it to achieve a top line of Rs. 300-400 Cr within the next 3-4 years, and has approved an additional Rs. 38 Cr investment to increase its holding from 51% to 65%.

Profitability Impacted by Forex, Margins Maintained within Band

Despite strong operational performance, Q2 PAT growth was slightly lower at 3-3.5% due to a significant 3.5% rupee depreciation within the quarter. This resulted in a Rs. 6 Cr mark-to-market forex loss recorded in finance costs. However, Q2 EBITDA still grew by 10.56%, contributing to double-digit H1 EBITDA growth, with H1 EBITDA margin around 12.3%. Management maintains its full-year EBITDA margin guidance in the 12%-14% band, expecting improvement in H2 if the rupee stabilizes and crude prices remain in the $65-70 range.

Strategic Initiatives and Positive H2 Market Outlook

The company's 'Unlock 2.0' strategy, focusing on premium products and segment acceleration, is yielding results, supported by programs like M-Power for mechanics and new product launches like Gulf Syntrac. Management expects to continue growing 2-3x the industry growth rate of 3-4%. The H2 outlook is bullish, anticipating strong demand from the festive and marriage seasons, positive rural sentiment, and the beneficial impact of recent GST cuts on the automotive sector, which reduced rates for commercial vehicles, petrol hybrids, and tractors.

Cash Flow and Treasury Management Strategy

Cash flow generation from operations for H1 FY26 was Rs. 24 Cr, a notable decrease from Rs. 131 Cr in the previous year, attributed to Q2 being a seasonally impacted quarter with elongated collection cycles. The company maintains a robust cash balance of Rs. 1,100 Cr, strategically deployed as a 'war chest' for potential M&A opportunities, particularly in the EV space. Foreign exchange exposure on imported products (70% of products) is managed through a Board-approved hedging policy, typically covering 50-75%.

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