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earnings | IST

Castrol saw pent-up demand in March quarter, business sentiment positive going ahead: MD Sandeep Sangwan

Castrol India reported a 114 percent year-on-year jump in net profit to Rs 140.0 crore for the quarter ended June 30. Its revenue grew 81.33 percent to Rs 889.6 crore, and margins expanded by 300 basis points.

Castrol India posted a strong set of earnings for the quarter ended June 30.
The company reported a net profit of Rs 140.0 crore for the first quarter of the financial year 2021-22, as against Rs 243.6 crore in the January-March period, and Rs 65.4 crore in the three-month period ended June 2020.
Castrol posted revenue growth of 81.33 percent to Rs 889.6 crore, and a 300-bps expansion in margins.
Speaking on the company's quarterly performance, Managing Director Sandeep Sangwan told CNBC-TV18: "Profits before tax are up about 100 percent. But if you compare on a quarter-to-quarter basis, I think in the first quarter this year there was pent-up demand and the sentiment was as if there is no Covid. So the business sentiment was very positive."
In the following quarter, which ended on June 30, the pandemic the company saw the impact of one and a half month. "We went through the severity of the second wave which impacted the business. While there was no national lockdown, there were various state lockdowns and almost the whole country was shut down for almost about a month. That is why you see a quarter-on-quarter drop in revenue,” he explained.
“Our business if you look at the first half of CY21 is actually slightly above 2019 which was the pre-pandemic period. From that perspective, we are very satisfied with the results that we have posted for this quarter.”
Speaking on business sentiment, Sangwan said, “If there is no third wave, or it is not very significant, and let us hope it is that way, the business sentiment is positive and we should see the momentum continue as a business.”
The company has a pricing strategy in place and keeps monitoring the market continuously, said the company official on raw material prices. "Whether it is input material costs or the competitive situation, we take pricing as per that context. We have taken a few price increases in the first half. I think I cannot comment on any price increases for the future because it will depend on where the raw material costs go, what the environment is, and what the availability is, and will take appropriate action accordingly," he said.
"I think the bottom line is, we want to continue delivering the value to our customers, and give them products and services that they value,” Sangwan said.
For full management commentary, watch the video.