Gulf Oil Q4 results: PAT rises 66% to Rs 60 crore

MUMBAI: Lubes maker Gulf Oil on Friday reported a 66.4 per cent growth in profit after tax (PAT) at Rs 59.79 crore in the March 2021 quarter.

The Hinduja Group company had posted a PAT of Rs 35.94 crore in Q4FY20, according to a release.

The revenue during the period under review grew 43.9 per cent to Rs 517.43 crore, the highest ever in any quarter, as against Rs 359.64 crore clocked in the March quarter of the earlier fiscal.

During Q4 FY’21, on the back of improved demand conditions across segments, the company delivered a significant revenue growth crossing Rs 500 crore topline for the first time-ever with record quarterly volumes but margins came under severe pressure due to sharp rise in input costs, which takes time to pass on to the customers, Gulf Oil said.

The growth in both revenue and PAT was achieved in spite of rising pressure from input costs but helped with continuing cost initiatives and margin management strategies initiated, it said.

For the financial year 2020-21, PAT declined by 1.2 per cent to Rs 200.09 crore in the previous fiscal as against a PAT of Rs 202.52 crore in FY2019-20, the company said.

However, net revenue stood almost flat at Rs 1,652.21 crore in FY21 as compared to Rs 1 ,644.15 crore in the financial year ended March 31, 2020, in spite of the year being impacted by Covid-19 and spiralling input costs, a sign of significant resilience in company’s business model, Gulf Oil said.

There has been an overall improvement in lubricant consumption in Q4 due to better economic and industrial activities, while personal mobility movement though improved but was still not at pre-Covid levels, the company noted.

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It said there has been good demand traction till the middle of March when the second wave started to show up in Western region states and the resultant lockdown in Maharashtra and parts of MP, Gujarat, which lead to some moderation on the business sentiments/achievements.

Despite these, both B2C and B2B segments of the company and all key product categories recorded good growth including in the CVO and agri segments.

B2B, OEM related and industrial businesses also saw strong growth and record sales in this quarter on the back of significantly improved manufacturing activities and in particular auto industry productions, it stated.

“The company has been progressing very well right from June’20 onwards by overcoming the market closure challenges caused by the first wave and the teams have delivered increased volumes with a fantastic comeback month-on-month. The sales and supply chain delivered record breaking Q2 and Q3 performances and we continued this momentum in Q4 as well,” said Ravi Chawla, Managing Director and CEO, Gulf Oil Lubricants India Ltd.

This focus on robust volume and top Line growth rolled on even as the company faced an unprecedented sharp and sudden rise in cost of key raw materials and packaging leading to considerable increase in overall input cost which led to gross margin pressures in Q4, he said.

“While margin management initiatives have been taken up, it usually takes some time to recover the costs. We invested in our ATL brand initiatives during Q4 with a new campaign,” he added.

“The company is fully geared up for the current challenges posed by rising input costs and managing the second wave of Covid while keeping the safety of its employees and associates as our top priority. I am quite sure that the company will bounce back quickly like last year once things start to settle down on the second wave front throughout the country,” Chwala said.

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