Castrol India Q3 Net Profit Down 23% YoY

Financial Performance - Q3 FY26

Revenue from operations: ₹1,735 crores, up 27% year-on-year, down 7% sequentially
EBITDA: ₹262 crores, down 19% year-on-year and 47% sequentially
EBITDA margin: Approximately 15% for the quarter
Profit after tax: ₹176 crores, down 23% year-on-year and 49% sequentially

Financial Performance - 9M FY26

Revenue from operations: ₹5,151 crores, up 20% year-on-year
EBITDA: ₹1,086 crores, up 11% year-on-year
EBITDA margin: Approximately 21% for the 9-month period
Profit before tax: ₹1,043 crores, up 10% year-on-year
Profit after tax: ₹766 crores, up 9% year-on-year

Key Operational Highlights

Raw material costs increased by over 60% year-on-year in Q3
Adverse currency movements added further cost pressure
Company maintained market leadership across categories
Industrial business delivered double-digit volume growth
Expanded national footprint to approximately 167,000 outlets
Rural distribution expanded to 46,000 outlets in small town India
Auto Care business now available across 50,000 physical stores
Service ecosystem includes 870 Castrol Auto Service centers, 37,000 independent bike workshops, and 16,000 multi-brand workshops
Rural Service Express expanded to over 1,000 locations
Added close to 400 net new industrial customers over 9 months

Product Launches and Innovations

Launched Magna CTX, a range of circulating oils for demanding industrial lubricant applications
Localized products including Hysol 35 XBB and Hysol 61 XBB, boron-free metalworking fluids
Strengthened Castrol MAGNATEC proposition with non-stop protection messaging
"Freedom to Ride" community program expanded to Mumbai, Pune, and Hyderabad
Fast Scan platform now has 180,000 verified mechanics, up 24% year-on-year

Manufacturing and Operational Excellence

Silvassa and Paharpur facilities won Gold at regional Convention of Quality Concepts
Plants running at 70-80% utilization levels
Historical capex range of ₹100-150 crores annually
Focus on operational excellence and supply chain resilience

Strategic Priorities and Outlook

Medium-term EBITDA margin guidance framework maintained at 21-24%
Focus on protecting margin per liter rather than percentage margins
Expect operating environment to remain volatile and inflationary
Overall volumes may remain soft in short to medium term
Growth engines (rural and industrial) expected to grow ahead of market
Priority on recovering margins, disciplined execution, and cost management
Long-term ambition to evolve from lubricants company to broader mobility solutions partner

Management Commentary

According to Managing Director Saugata Basuray: "In a quarter marked by a sharp rise in raw material costs and adverse currency movements, we delivered a resilient performance with revenue up 27% year-on-year. While third quarter profits were down 23% year-on-year, over the 9 months revenue has grown by 20% to INR 5,151 crores."

CFO Mrinalini Srinivasan stated: "The pricing actions that we took early in the year in anticipation of the raw material inflation helped moderate the impact on margins. In this time of extreme volatility, for us, margin per liter is a true measure. And on that basis, we have fully absorbed cost inflation. Margins are steady to slightly higher."

Q&A Session Highlights

Management declined to provide specific volume guidance due to unprecedented raw material volatility
Confirmed ongoing Stonepeak acquisition process from BP requires licensing approvals across 50+ countries
Industrial business margins remain healthy and higher than last year
Data center cooling solutions business remains in pilot phase with NVIDIA-certified products
Pricing strategy varies across channels with some B2B contracts having price flex arrangements
Company uses diversified supplier network, localization, and reformulation to manage costs

Accolades and Recognition

Received ET Brand Equity Award
Ranked in top 10 Supply Chain Planning Champions
Placed seventh in Supply Chain Excellence by Institute of Supply Chain Management