Gulf Oil Lubricants India Limited — Q4 FY25 earnings call

Call held 22 May 2025

Management summary

Gulf Oil Lubricants India Limited reported a strong Q4 and record FY25 performance, driven by robust volume growth significantly outpacing the industry. The company achieved its highest-ever revenue and EBITDA, supported by an improved product mix and strategic execution. Strong cash generation led to a record cash balance and a higher dividend payout. The EV charger subsidiary, Tirex, also showed impressive growth and profitability, contributing to the company's diversification strategy.

Highlights

  • Q4 core lubes volume reached a record 39,500 kl, contributing to a 7% FY25 volume growth, more than double the industry rate of 3%.

  • Q4 revenue hit an all-time high of INR915 crore, while full-year FY25 revenue surpassed INR3,500 crore.

  • EBITDA for Q4 was a record INR124.47 crore, with the EBITDA margin improving to 13.6%.

  • FY25 EBITDA grew by 12% and PAT increased by nearly 17.5%.

  • Cash from operations for FY25 was INR423 crore, leading to a historic high cash balance of INR1,027 crore on the balance sheet.

  • The company declared a total dividend of INR48 per share for FY25 (INR28 final + INR20 interim), representing a 65% payout ratio.

  • The EV charger subsidiary, Tirex, delivered INR78-79 crore in Q4 revenue, marking a 300% YoY growth, and achieved positive EBITDA.

  • AdBlue segment volumes reached 140,000 kl for FY25, growing significantly from 16,000 kl previously.

Key financials

  1. Revenue ₹915 Cr
  2. EBITDA ₹124.47 Cr
  3. EBITDA Margin 13.6%
  4. Core Lubes Volume 39,500 kl
  5. PAT Growth 17.5% +17.5%YoY
  6. Cash on Balance Sheet ₹1,027 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

  • Diesel Engine Oil
    -2% Q4 Volume Change
  • Personal Mobility
    24% Q4 Volume Change24% Overall Component
  • Factory Fill
    0% Q4 Volume Change-10% FY25 Volume Change
  • AdBlue
    37,000 kl Q4 Volume1,40,000 kl FY25 Volume₹45 Average Realization
  • Battery (Tirex)
    ₹80 Cr FY25 Revenue₹78 Cr Q4 Revenue3% Q4 Revenue Growth
  • Exports
    7% Volume Mix

Guidance & targets

Profitability

  • A&P Expenses Profitability · ongoing · High confidence 3-4%
    We usually have our A&P's in the range of around 3% to 4%, and we intend to continue with that.

    — Manish Gangwal, CFO

Volume

  • Volume Growth Volume · ongoing · High confidence 2x industry growth rate
    We are very confident of continuing this 2x growth because there are some segments, obviously, where we have close to double digit.

    — Ravi Chawla, MD and CEO

  • AdBlue Volume Growth Volume · next few years · High confidence 10-15%
    We believe that now our growth in AdBlue will continue to be in the range of 10% to 15% in terms of volume.

    — Manish Gangwal, CFO

Margin

  • EBITDA Margin Band Margin · ongoing · High confidence 12-14%
    We should see some elevated A&P expenses in the current quarter, but we will still maintain our EBITDA guided band of 12% to 14%.

    — Manish Gangwal, CFO

Revenue

  • Tirex Turnover Revenue · next 3-4 years · Medium confidence INR400-500 crore
    We intend to keep increasing our revenues at a very fast pace and are continuously looking at how we can attain INR400 crore to INR500 crore turnover in next 3 to 4 years is what we are looking at.

    — Manish Gangwal, CFO

Capex

  • Annual Capex Capex · annual · High confidence INR50 crore
    Besides our current business, we'll continue to require some cash, around INR50 crore annual capex is required.

    — Manish Gangwal, CFO

Dividend

  • Dividend Payout Ratio Dividend · FY25 · High confidence 65%

    Previously 55-57% → 65%

    The Board of Directors of the company have been very enthusiastic and happy about that and declared a higher payout ratio at 65%, announcing INR28 final dividend for the year, in addition to the INR20 interim dividend, which was paid in February. The total dividend for the year now stands at INR48, which works out to nearly 65% payout.

    — Manish Gangwal, CFO

Risks & concerns

  • Rupee depreciation impacting import costs

    medium

    Rupee depreciated to INR88 briefly in Q4, impacting gross margins, though it retracted to INR85.6 by March end. 70-80% of base oil is imported.

    Management acknowledged

  • Lagged impact of crude prices on base oil and global supply/demand dynamics

    medium

    While crude prices are stabilizing, base oil prices react with a 1-2 month lag, and global demand/supply situations make timing difficult to predict for softening base oil rates.

    Management acknowledged

Q&A highlights

2 direct
Cash utilization and distribution strategy Direct
As we mentioned, the opportunities and M&A, both in the current business as well as in our evolving new target sector of EV-related opportunities, are in active considerations. We obviously cannot disclose anything at this stage, but we keep looking and evaluating proposals, but it has to make synergistic sense to our current businesses.

The analyst questioned the large cash balance (INR1,027 crore) and suggested special dividends or buybacks, prompting management to detail their investment plans in core business, adjacencies, EV, and capex.

Asked by Prashant Kale

EBITDA margin outlook for Q1 FY26 Partial
However, having said that, if we see the trend of last 15 years, eventually, if crude remains at these levels, the base oil, will see some softening at some point in time. The timing is difficult to predict, but it eventually happens, when the crude remains at these levels.

The analyst probed whether EBITDA margins could surpass the Q4 level of 13.6% given lower crude prices, to which management expressed optimism but cautioned on timing due to base oil lag and global supply/demand dynamics, also noting elevated A&P expenses.

Asked by Yash Nandwani

EV charger subsidiary (Tirex) growth, shareholding, and product strategy Direct
We intend to keep increasing our revenues at a very fast pace and are continuously looking at how we can attain INR400 crore to INR500 crore turnover in next 3 to 4 years is what we are looking at.

Analysts sought clarity on the ambitious growth targets for Tirex, potential increase in Gulf Oil's shareholding, and the strategy for entering the mass market for AC chargers, revealing management's focus on quality OEMs and specific revenue targets.

Asked by Prashant Kale

2 min read 5 chapters

Detailed narrative

Record Performance in Q4 and FY25

Gulf Oil Lubricants delivered a record-breaking Q4 FY25, achieving its highest-ever core lubes volume of 39,500 kl, revenue of INR915 crore, and EBITDA of INR124.47 crore, with an EBITDA margin of 13.6%. For the full fiscal year 2025, the company's revenue surpassed INR3,500 crore, driven by a 7% volume growth that significantly outpaced the industry's 3% growth rate. This strong performance was attributed to continued strategic execution and an improved product mix across segments.

Robust Financial Health and Capital Allocation

The company demonstrated strong financial health in FY25, with EBITDA growing by 12% and PAT by nearly 17.5%. Cash generation from operations was robust, increasing to INR423 crore from INR348 crore in the previous year, resulting in a historic high cash balance of INR1,027 crore. The Board approved a higher dividend payout ratio of 65% for FY25, with a total dividend of INR48 per share. Management indicated an annual capex requirement of around INR50 crore and is evaluating opportunities for expansion of the Silvassa plant.

Strategic Growth in EV Mobility and AdBlue Segments

The EV charger subsidiary, Tirex, acquired in October '23, reported a record Q4 with INR78-79 crore in revenue, representing a 300% year-over-year growth and achieving positive EBITDA. The company aims for Tirex to achieve INR400-500 crore in turnover within the next 3-4 years, focusing on quality products and OEM partnerships. The AdBlue segment also saw significant growth, reaching 140,000 kl in FY25 volumes, up from 16,000 kl, with a projected growth rate of 10-15% for the coming years, supported by partnerships like Nayara.

Market Share Expansion and Brand Investments

Gulf Oil Lubricants increased its market share by nearly 0.5% across all key segments in FY25, with all focused segments growing ahead of the market. The company continues to invest heavily in brand building, launching campaigns like 'Unstoppables' and 'Gulf Pride' for motorcycles, featuring brand ambassadors. These 360-degree campaigns aim to strengthen consumer engagement and market penetration across digital, mainline media, and retail channels, while maintaining A&P expenses in the 3-4% range.

Margin Outlook and Raw Material Dynamics

Gross margins remained stable in Q4, despite challenges from rupee depreciation which briefly touched INR88. Management expressed optimism about future base oil rates, noting that crude prices have stabilized around $65 (down from $70-75 in Q4) and the rupee has strengthened to INR85.5. While base oil prices typically react with a lag, the company aims to maintain its EBITDA margin within the 12-14% guided band, balancing raw material costs with strategic investments and market pricing.

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