Castrol India Ltd Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript. (Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session) Question: Sahil Kanade - Asian Market Securities - Analyst : Just wanted to understand more on the data center. So you said the cooling fluids are ready. Just wanted to understand what is the status and what is the potential revenue that we should expect out of this? Question: Sahil Kanade - Asian Market Securities - Analyst : Right. And sir, so just to have some clarity on that. So is it that while you're working on this globally, is this primarily done for customers in India? Or this will begin more as an offering to outside of India and then gradually percolate into India? Question: Ashwini Damani - Manyavar Family Office. - Analyst : Sir, just wanted to get your thoughts on two things, a, we have started spending on advertisement as a customer myself, my service center decides on what lubricant is going. And I have little or no choice, or maybe I don't even bother. So how do you think these advertisement spend will help you in when to take us, say, hiring the Shah Rukh Khan, et cetera? And the second question is, I think for the first time that we have done a lateral hiring at the senior level, Mr. Kedar Lele. If we look at the history of Castrol, it's always been someone who is from within the Castrol team or some big petroleum that has become a managing Director or as a senior person. What is the thought process in hiring someone who is not from the industry, or who is not from the family itself? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : Congratulations for a very good set of numbers. Can you give the volume number? Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : So what should be equate to in tonnages, if that is possible? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : And sir, second question relates to pricing. So how our pricing stand vis-a-vis competitors? So if you can make some qualitative comments, it will be highly useful. Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : So we have a market share in premium and mass market, if you can quantify? Question: Chintan Modi - Haitong Securities India Private Limited. - Analyst : Sir, as we can observe that last couple of years, our focus has been improving on the volume side to generate a lot of volume. However, if I look at your last decade, like 2011 to '20, our volume CAGR has been quite slow. Is this a change in strategy? And if you could highlight like, what is leading to this change? Question: Chintan Modi - Haitong Securities India Private Limited. - Analyst : Sure, sure. Apart from automotive, we are also present into industrials. How large could be in that industry? And would that be also similar margin profile? And do we have any aggressive plan to expand considering that lot of manufacturing activities picking up in India? Question: Nitin Tiwari - PhillipCapital - Analyst : Sir, my question was actually related to your product mix in this quarter. So how should we look at it in terms of how was the sales distribution between, say, CV and two-wheeler, et cetera? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Nitin Tiwari - PhillipCapital - Analyst : Actually, I'm looking for national distribution of sales in percentage terms across three segments, so if you could help with that. Question: Nitin Tiwari - PhillipCapital - Analyst : So secondly my second question was actually on pricing and margins. So if we look at our margin in terms of what we are making on rupees per liter terms, right? So that's roughly about INR50, INR55 odd, which translates into about making on INR69 sense per liter, right? So how is this margin looking globally, if we look at international markets and then what Castrol sales globally. So how is that number there? So why I'm asking this is that I want to understand that where perhaps taken the market in India could head in premiumization in terms if at all, like we move in that direction. Question: Nitin Tiwari - PhillipCapital - Analyst : So that's helpful. But the reason for asking this is that we have the premium player in the market. And our -- I mean, EBITDA margins have been in the range of about INR50 to INR55 per liter for quite some time. So do you see this number expanding from here? Is there a scope for this to more expand from here on as well? Question: Nitin Tiwari - PhillipCapital - Analyst : That's very helpful. Question: Nitin Tiwari - PhillipCapital - Analyst : Understood. That's very helpful. And a final question, one more. So just wanted to understand that across different product categories, and I'm talking about the broad category, which is two-wheeler, cars, et cetera. How many products are available in each category? And what would be a typical price range for these products? Very broad numbers would be okay. Question: Nitin Tiwari - PhillipCapital - Analyst : Right. And what would be a typical price range, if we look at these products? Question: Anuj Sharma - M3 Investment - Analyst : And I'm not sure if this was answered earlier. But between a like-to-like hybrid vehicle and a normal ICE vehicle, what is the intensity of lubricants, which goes into it? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Anuj Sharma - M3 Investment - Analyst : All right. That's helpful. And the second question is, given the evolution of ICE engine, do you see a change in the drain intervals over the next three, five years? Or do you think it is little bit pretty much similar to what has been in the past? Question: Anuj Sharma - M3 Investment - Analyst : That's helpful. Just a question, the trend change in drain interval remains the same as in past? Is that a correct assessment? Question: Anuj Sharma - M3 Investment - Analyst : The rate of change in drain interval in future won't continue to be, let's suppose, what's been in the past 5 years. Is that a correct assessment? Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : My question is the opportunity related to the data center, I hear you talking about that, maybe it's early to speak about it but just some technical aspects that we want to understand, one is, if you have to look on a usage of this fuel per megawatt capacity, how should we look at -- Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Okay. Is this better? Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Yes, sir. Sir my question regarding the opportunity on data center, although it's too early to size down that opportunity. But wanted to understand some technical angle to that is, if you have to look at the usage of that fuel on a per megawatt, what is the usage that it will ask for and the frequency of the intervals that it is used. And also, whenever this product is available in the market, what is the margins that we will look at considering that this is a B2B business, how different it can be from our current portfolio? Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Okay. And by when do we expect that this product could be available here in India? Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Okay. And just one other question is about the raw material availability for the base oil. At this point, given what the situation we face on the sea trade, is there any syndromes that we are facing and as such the price movement of base oil, if you can give some color on that? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Rohit Maheshwari - Tata AIG General Insurance - Analyst : Congratulations on a good set numbers. My most of the questions are answered. The one question I have is, sir, can you give some sense of users of lubricant in ICE versus hybrid versus EV? Question: Miraj Shah - Arihant Capital - Analyst : I wanted to understand the volumes that you spoke about 61 million liters for this quarter. If you could tell me what was for the previous year and the same quarter last year? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Miraj Shah - Arihant Capital - Analyst : Okay. So next is regarding in your opening -- one of the opening remarks that you gave that you're seeing stabilization in the input costs right now. So which input costs in particular are you talking about? And how do you see the margins panning out, do we see healthier from here? Or do we see more movement in the raw material costs over here? Question: Miraj Shah - Arihant Capital - Analyst : Understood, okay. That is a margin range. And just one last thing in the data center part that you gave your initial remark on like you inaugurated Technology Center in Patalganga and you are currently in the testing phase for fuels. So just wanted to understand that how long will this duration be? And if there are any significant developments, in which unit would this be produced or would you have to put in a new unit to work on this? Just want to understand that. Question: Miraj Shah - Arihant Capital - Analyst : So any developments coming from UK from the parent on that we'll be working on and then we'll be able to deploy it in our plants? REFINITIV STREETEVENTS \| www.refinitiv.com \| Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call Question: Miraj Shah - Arihant Capital - Analyst : So do we have any existing products into that are actually coming from UK or this is just an initial step?

The following is excerpted from the question-and-answer section of the transcript.

(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)

Question: Sahil Kanade - Asian Market Securities - Analyst : Just wanted to understand more on the data center. So you said the cooling fluids are ready. Just wanted to understand what is the status and what is the potential revenue that we should expect out of this?

Question: Sahil Kanade - Asian Market Securities - Analyst : Right. And sir, so just to have some clarity on that. So is it that while you're working on this globally, is this primarily done for customers in India? Or this will begin more as an offering to outside of India and then gradually percolate into India?

Question: Ashwini Damani - Manyavar Family Office. - Analyst : Sir, just wanted to get your thoughts on two things, a, we have started spending on advertisement as a customer myself, my service center decides on what lubricant is going. And I have little or no choice, or maybe I don't even bother. So how do you think these advertisement spend will help you in when to take us, say, hiring the Shah Rukh Khan, et cetera? And the second question is, I think for the first time that we have done a lateral hiring at the senior level, Mr. Kedar Lele. If we look at the history of Castrol, it's always been someone who is from within the Castrol team or some big petroleum that has become a managing Director or as a senior person. What is the thought process in hiring someone who is not from the industry, or who is not from the family itself? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : Congratulations for a very good set of numbers. Can you give the volume number?

Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : So what should be equate to in tonnages, if that is possible? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : And sir, second question relates to pricing. So how our pricing stand vis-a-vis competitors? So if you can make some qualitative comments, it will be highly useful.

Question: Vipul Kumar Anupchand Shah - Sumangal Investment - Analyst : So we have a market share in premium and mass market, if you can quantify?

Question: Chintan Modi - Haitong Securities India Private Limited. - Analyst : Sir, as we can observe that last couple of years, our focus has been improving on the volume side to generate a lot of volume. However, if I look at your last decade, like 2011 to '20, our volume CAGR has been quite slow. Is this a change in strategy? And if you could highlight like, what is leading to this change?

Question: Chintan Modi - Haitong Securities India Private Limited. - Analyst : Sure, sure. Apart from automotive, we are also present into industrials. How large could be in that industry? And would that be also similar margin profile? And do we have any aggressive plan to expand considering that lot of manufacturing activities picking up in India?

Question: Nitin Tiwari - PhillipCapital - Analyst : Sir, my question was actually related to your product mix in this quarter. So how should we look at it in terms of how was the sales distribution between, say, CV and two-wheeler, et cetera? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Nitin Tiwari - PhillipCapital - Analyst : Actually, I'm looking for national distribution of sales in percentage terms across three segments, so if you could help with that.

Question: Nitin Tiwari - PhillipCapital - Analyst : So secondly my second question was actually on pricing and margins. So if we look at our margin in terms of what we are making on rupees per liter terms, right? So that's roughly about INR50, INR55 odd, which translates into about making on INR69 sense per liter, right? So how is this margin looking globally, if we look at international markets and then what Castrol sales globally. So how is that number there? So why I'm asking this is that I want to understand that where perhaps taken the market in India could head in premiumization in terms if at all, like we move in that direction.

Question: Nitin Tiwari - PhillipCapital - Analyst : So that's helpful. But the reason for asking this is that we have the premium player in the market. And our -- I mean, EBITDA margins have been in the range of about INR50 to INR55 per liter for quite some time. So do you see this number expanding from here? Is there a scope for this to more expand from here on as well?

Question: Nitin Tiwari - PhillipCapital - Analyst : That's very helpful.

Question: Nitin Tiwari - PhillipCapital - Analyst : Understood. That's very helpful. And a final question, one more. So just wanted to understand that across different product categories, and I'm talking about the broad category, which is two-wheeler, cars, et cetera. How many products are available in each category? And what would be a typical price range for these products? Very broad numbers would be okay.

Question: Nitin Tiwari - PhillipCapital - Analyst : Right. And what would be a typical price range, if we look at these products?

Question: Anuj Sharma - M3 Investment - Analyst : And I'm not sure if this was answered earlier. But between a like-to-like hybrid vehicle and a normal ICE vehicle, what is the intensity of lubricants, which goes into it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Anuj Sharma - M3 Investment - Analyst : All right. That's helpful. And the second question is, given the evolution of ICE engine, do you see a change in the drain intervals over the next three, five years? Or do you think it is little bit pretty much similar to what has been in the past?

Question: Anuj Sharma - M3 Investment - Analyst : That's helpful. Just a question, the trend change in drain interval remains the same as in past? Is that a correct assessment?

Question: Anuj Sharma - M3 Investment - Analyst : The rate of change in drain interval in future won't continue to be, let's suppose, what's been in the past 5 years. Is that a correct assessment?

Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : My question is the opportunity related to the data center, I hear you talking about that, maybe it's early to speak about it but just some technical aspects that we want to understand, one is, if you have to look on a usage of this fuel per megawatt capacity, how should we look at --

Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Okay. Is this better?

Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Yes, sir. Sir my question regarding the opportunity on data center, although it's too early to size down that opportunity. But wanted to understand some technical angle to that is, if you have to look at the usage of that fuel on a per megawatt, what is the usage that it will ask for and the frequency of the intervals that it is used. And also, whenever this product is available in the market, what is the margins that we will look at considering that this is a B2B business, how different it can be from our current portfolio?

Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Okay. And by when do we expect that this product could be available here in India?

Question: Mandar Pawar - Kotak Mahindra Asset Management Company - Analyst : Okay. And just one other question is about the raw material availability for the base oil. At this point, given what the situation we face on the sea trade, is there any syndromes that we are facing and as such the price movement of base oil, if you can give some color on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Rohit Maheshwari - Tata AIG General Insurance - Analyst : Congratulations on a good set numbers. My most of the questions are answered. The one question I have is, sir, can you give some sense of users of lubricant in ICE versus hybrid versus EV?

Question: Miraj Shah - Arihant Capital - Analyst : I wanted to understand the volumes that you spoke about 61 million liters for this quarter. If you could tell me what was for the previous year and the same quarter last year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Miraj Shah - Arihant Capital - Analyst : Okay. So next is regarding in your opening -- one of the opening remarks that you gave that you're seeing stabilization in the input costs right now. So which input costs in particular are you talking about? And how do you see the margins panning out, do we see healthier from here? Or do we see more movement in the raw material costs over here?

Question: Miraj Shah - Arihant Capital - Analyst : Understood, okay. That is a margin range. And just one last thing in the data center part that you gave your initial remark on like you inaugurated Technology Center in Patalganga and you are currently in the testing phase for fuels. So just wanted to understand that how long will this duration be? And if there are any significant developments, in which unit would this be produced or would you have to put in a new unit to work on this? Just want to understand that.

Question: Miraj Shah - Arihant Capital - Analyst : So any developments coming from UK from the parent on that we'll be working on and then we'll be able to deploy it in our plants? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2024 / 6:45AM, CAST.NS - Q2 2024 Castrol India Ltd Earnings Call

Question: Miraj Shah - Arihant Capital - Analyst : So do we have any existing products into that are actually coming from UK or this is just an initial step?


MLA:	Thomson StreetEvents. "Castrol India Ltd Q2 2024 Earnings Call Transcript" Jul 31, 2024. Alacra Store. May 15, 2025. <http://www.alacrastore.com/thomson-streetevents-transcripts/Q2-2024-Castrol-India-Ltd-Earnings-Call-T16060713>

APA:	Thomson StreetEvents. (2024). Castrol India Ltd Q2 2024 Earnings Call Transcript Jul 31, 2024. New York, NY: Alacra Store. Retrieved May 15, 2025 from <http://www.alacrastore.com/thomson-streetevents-transcripts/Q2-2024-Castrol-India-Ltd-Earnings-Call-T16060713>

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