Earnings Outlook
Input cost to drag Castrol Q1 PAT despite rise in sales
This story was originally published at 12:50 IST on 4 August 2026
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By Somen Bose
MUMBAI - Lubricant maker Castrol India Ltd. is expected to report a slight decline in its net profit for the June quarter as higher crude oil prices are likely to weigh on the margin. The company's revenue is expected to rise, led by growth in sales volume and strong lubricant demand across automotive and industrial segments, according to brokerages tracking the company.
The company's net profit for the June quarter is expected at INR 2.41 billion, marginally down from INR 2.44 billion in the year-ago quarter, according to the average of estimates from five brokerages. The highest estimate for the June quarter net profit is INR 2.53 billion from PhillipCapital (India) Pvt. Ltd. and the lowest is INR 2.26 billion from IDBI Capital Market Services Ltd.
The company's top line for the June quarter is expected at INR 16.42 billion, up around 10% on year and 6% sequentially. The highest estimate for revenue is around INR 17.45 billion from Kotak Securities Ltd. and the lowest is INR 15.16 billion from IDBI Capital. The company had reported net
sales of INR 14.97 billion in the year-ago quarter.
The June quarter was challenging for the energy sector, brokerages said. The war in West Asia disrupted energy markets and this affected both crude oil prices and the availability of barrels to transport the oil in.
Brokerages expect the company's sales volume to grow 6% on year to 70 million litres. The June quarter realisation is expected to fall to INR 226 per litre from INR 228 per litre in the trailing quarter. Castrol India manufactures lubricants, engine oils and fluids for automotive, commercial vehicles and industrial applications and is a part of BP PLC.
The company will release its June quarter earnings Tuesday. Investors will closely watch the management commentary on price hikes or cuts implemented during the quarter, contribution of new products, update on retail outlet expansion, and advertisement spends for the quarter. Investors are also awaiting an update on BP's December 2025 agreement to sell a 65% stake in its global Castrol lubricants business to Stonepeak, with investors seeking clarity on the deal's completion and its implications for Castrol India.
Brokerages expect Castrol India's June quarter earnings before interest, tax, depreciation, and amortisation to be INR 3.34 billion, down over 4% from INR 3.49 billion in the year-ago quarter. The highest estimate for EBITDA is INR 3.5 billion from Motilal Oswal and the lowest is INR 3.2 billion from Kotak Securities.
The company's EBITDA margin for the reporting quarter is likely to contract to 20.8-22.2% from 23.4% a year ago. The decline in EBITDA margin is due to higher raw material costs, brokerages said.
Of the two research reports on the company available with Informist, Motilal Oswal has a 'buy' recommendation on the stock with an average target price of INR 220 per share, nearly 18% higher than the current market price. IDBI Capital Market Services has a 'hold' call on the stock with an average target price of INR 220 apiece.
At 1232 IST shares of Castrol traded marginally up at INR 186.8 on the National Stock Exchange. The shares are almost flat since the company reported its March quarter earnings on Apr. 28.
Following are the April-June earnings estimates for Castrol India Ltd. from five brokerages, in descending order of the net profit estimate, in INR billion:
|
Brokerage |
Net Sales |
Net Profit |
EBITDA |
|
PhillipCapital (India) Pvt. Ltd. |
16.79 |
2.53 |
3.47 |
|
360 ONE Capital Market Pvt. Ltd. |
16.91 |
2.51 |
-- |
|
Motilal Oswal Financial Services Ltd. |
15.79 |
2.47 |
3.51 |
|
Kotak Securities Ltd. |
17.45 |
2.28 |
3.18 |
|
IDBI Capital Market Services Ltd. |
15.16 |
2.26 |
3.20 |
|
Average |
16.42 |
2.41 |
3.34 |
End
Edited by Pankaj Aher
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