Castrol India Ltd — Call Transcript 2025

Aug 11, 2025

castrol.co.in

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11 August 2025

To, BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G, Dalal Street, Bandra Kurla Complex, Bandra East, Mumbai – 400 001 Mumbai – 400 051 Scrip Code: 500870 Scrip Symbol: CASTROLIND

Dear Sir,

Sub.: Transcript of audio recording of the Post Earnings Call for 2Q FY 2025

Pursuant to Regulation 30 and 46 read with Para A Part A of Schedule III to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the transcript of the audio recording of the Company's post earnings call for 2Q FY 2025 with analysts/investors held on Wednesday, 6 August 2025 is enclosed. The same is also available on the website of the Company.

The transcript of the audio recording can be accessed on the following link: https://www.castrol.com/en_in/india/home/investors/information-for-shareholders.html under Investor Call Details --- 2025 --- 2Q FY 2025

Kindly take the same on record.

Thank You.

Yours faithfully,

For Castrol India Limited

HEMANG Digitally signed by HEMANGI I YATEEN YATEEN GHAG Date: 2025.08.11 GHAG 14:18:11 +05'30' Hemangi Ghag

Company Secretary & Compliance Officer

Encl.: A/a

Registered address: Castrol India Limited CIN: L23200MH1979PLC021359 Technopolis Knowledge Park, Mahakali Caves Road, Andheri (East), Mumbai – 400093 Tel: +91 22 7177 7111/ Fax: +91 22 6698 4101 Customer Service Toll Free No: 1800222100 / 18002098100

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“Castrol India Limited

2Q & 1H Earnings Conference Call”

6 August 2025

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– – MANAGEMENT: MR. KEDAR LELE MANAGING DIRECTOR CASTROL INDIA LIMITED – MS. MRINALINI SRINIVASAN CHIEF FINANCIAL – OFFICER CASTROL INDIA LIMITED

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Castrol India Limited 6 August 2025

Moderator:

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Ladies and gentlemen, welcome to our 2Q and 1H Earnings Conference Call for Castrol India Limited. Please note that all participant lines will be in the listen-only mode and you can ask your questions after the opening statements. If you need assistance during the call, please press star then zero on your touchtone phone to reach the operator. Please note that this call is being recorded.

Also, please note that this conference call may contain certain forward-looking statements, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict.

We have with us today Mr. Kedar Lele, Managing Director, Castrol India Limited; and Ms. Mrinalini Srinivasan, Chief Financial Officer, Castrol India Limited.

I now hand the conference over to Mr. Lele for his opening remarks. Thank you, and over to you, sir.

Kedar Lele:

Good afternoon and Namaskar to everyone. Welcome to Castrol India's Second Quarter and First Half Analyst Call for 2025. Thank you very much for joining us today. As you might already be aware, our reporting follows the Jan to December calendar year, and hence, it is the first half and Q2.

But before we start, I'm happy to introduce Ms. Srinivasan to you today. She is our CFO, who has been on Board for over a week now, and she comes to us with over 17 years of experience at P&G India, where she held a range of finance leadership roles across business units and geographies, including Asia, the Middle East and Africa.

Welcome, Mrinalini, and could you introduce yourself?

Mrinalini Srinivasan:

Thank you, Kedar. Hi, everyone. I'm very excited to be here. My first week has been a very warm and welcoming week indeed. In my last role, I served as the Chief Financial Officer for Procter & Gamble Hygiene and Health Care Company, and I was also the Group Controller for P&G Group in India.

I look forward to interacting with all of you over the due course. Back to you, Kedar.

Kedar Lele:

Thanks, Mrinalini. Welcome once again. That said, let's get into the Castrol India's performance in the 2Q and first half of 2025. We are happy to announce that we have continued our momentum from the beginning of the year into the second quarter with healthy performance.

Our continued focus on innovation across products and services, broadening our distribution footprint and investment in our brands has really translated into growth in volumes despite the macroeconomic challenges and volatilities that you all know. This demonstrates the company's resilience and diverse portfolio that helps us navigate these various market cycles.

Some key points. Revenue from operations from the second quarter '25 grew 7% year-on-year to INR1,497 crores. EBITDA stood at INR349 crores, representing a growth of 8%. PAT in this

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quarter increased 5% year-on-year, coming in at INR244 crores. And these numbers translate to half year in this manner that the revenue for the first half of the year also grew 7% to INR2,919 crores.

EBITDA stands at INR657 crores, up 7%. PAT grew at 6.5% and stood at INR477 crores. Additionally, delighted that Board has recommended an interim dividend of INR3.50, INR3.5 per share, subject to shareholders' approval.

The growth in top line is primarily being driven by our expanding reach across rural markets and our increasing presence in industrial segment. This was further supported by strengthening associations with OEMs.

Our disciplined expense management and operational efficiencies helped maintain margins, which reflect our ability to execute growth strategies without compromising on profitability despite headwinds from input cost volatility and, of course, the competitive market.

Overall, our strategic focus is on bolstering our product portfolio as well as distribution network and developing end-to-end solutions that combine service delivery with product sales. Aligned with the Viksit Bharat goals, the industrial segment is a major focus area for us, and it is seeing a robust double-digit growth for the company.

We have been able to establish strong customer relations and acquisitions through value-led engagement. We brought our globally acclaimed metalworking fluids Hysol MB 50 and Hysol 20 XBB range to the Indian market through local production. This would enable faster delivery and superior value creation.

Product launches such as Rustilo and Hysol serve now more than 100 customers across automotive, tube, bearings and metal manufacturing sectors. Our chemical management services, what is called as CMS, offering is gaining strong momentum, is now operational at multiple sites, and this model goes beyond selling lubes and chemicals.

We take end-to-end responsibility across the chemical life cycle, delivering efficiency, compliance and value to our customers. This value-added service is being received very well amongst the customers.

Now let me touch upon our Bharat portfolio. Our Bharat strategy that we've been talking about for the last few quarters is serving well because in this strategy, we laid out 2 pillars. One is to make our brand and our product more relevant for the belly of the market. So larger consumer franchise gets exposed to Castrol brand and then taking the brand to a wider distribution network to rest of the country. So, it means the more Mofussil towns of India as well as in rural areas.

We've also digitized our distributor management system to the next level across our distributors as well as rural Castrol sub-distributors who help us deliver this reach consistently. Let me also talk about widening our market access through our multichannel approach. You would remember, I kept talking about over 140,000 outlets in the past.

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Now we are present in over 160,000 outlets, including 32,000-plus bike points, over 11,000 multi-brand car workshops and a wider dealer network. We continue to expand our Castrol auto service network to offer reliable services in the aftermarket.

At present, we support over 730 workshops in over 340 cities. Our entire Auto Care product range and Auto Care product range includes shiners, sponges, cloths and so on are now available across e-commerce, modern trade and over 50,000 outlets in India.

Volume growth has been seen across segments with steady volume performance in core sectors or core categories where we have either maintained or expanded our market share. Our overall market share stands at over 20% and the key growth categories included commercial vehicles, specialties, bikes, cars, auto care products, B2B and especially industrial, where we have now seen consistent growth for 9 quarters and Q2 growth in industrial being at 13%.

We are looking at building Castrol into a service-led digitally enabled mobility brand because we continue to leverage tech for both customer convenience and mechanic empowerment. Very, very important and relevant is the flagship mechanic Connect app called Fast Scan, which is being used by over 1 million mechanics in India.

And on many days in this quarter, over 200,000 transactions were recorded by these mechanics who are our big advocates in the market. We upgraded our distributor management system to enhance agility and transparency across channels. And we also advanced our OEM relationships, sustainability and circularity agenda being the core.

We are the first, in my opinion, a large lubricant manufacturer who have been able to not just develop but commercially produce first-of-its-kind RRBO-based engine oils for BS-IV vehicles. And this we have done in partnership with a leading OEM, and it will keep growing with more partners coming in to develop circular and redefining ecosystem.

In terms of initiatives towards our brand and consumer connect, we concluded our Castrol Activ Relaunch campaign. You remember, I spoke about it with SRK, Garmi Mein Bhi 3X Protection that more than 250 million consumers in mass media.

And our brand-building initiatives have continued this quarter with our participation in NATRAX and Valley Run 2025, where Castrol EDGE powered the 300KMPH club of super cars, reaching about 3 million biking and racing enthusiasts at an overall level.

We've always taken pride in being at the forefront of cultivating industry-leading norms. And consequently, we are well recognized for upholding these high standards. Our Patalganga plant has received the Golden Peacock Award for occupational health and safety.

In fact, Patalganga plant was last time. This time, our Silvassa plant has received the Golden Peacock Award correction there, but it tells you that consistently, our plants keep receiving awards for being best on quality or safety.

Last but not least, I should also talk about our annual report, which all of you did appreciate and did take a look at. Last year's annual report won Platinum at the LACP Spotlight Awards. All

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these initiatives support our strategy that revolves around our core strength, Castrol's brand value and the way the industry is evolving in general.

We expect robust growth coming in from our industrial segment, supported by our rural outreach that I spoke about. Performance in the first half of the year gives an optimistic indication for the full year. Looking ahead, our focus shall remain on delivering high-quality products and services to the automotive and industrial sectors.

Our expanding network is really a testament to Castrol becoming more and more accessible and affordable for consumers through the length and breadth of our country. Our overarching strategy is to leverage the opportunities in industrial Bharat and service-driven delivery, which we are confident, will build sustainable value over the longer term. That's all that I would like to update you about at this.

Thank you for your attention. We now invite you to share any questions, feedback or views as we open the floor for discussions. Thank you.

Moderator: Thank you. We will now begin the question and answer session. We take our first question from the line of Nitin Tiwari from PhillipCapital India.

Nitin Tiwari:

I have two questions. The first is around your volumes. So, if you can give us the volume number for the quarter and provide some more color on how the different segments have grown in this quarter in terms of automotive, non- automotive I understand that you gave a broad overview in your initial comments, but some more details would be appreciated? That is one. And I'll ask my second after that?

Moderator: Nitin, can you please mute your line? There's some background disturbance on your connection.

Nitin Tiwari:

Yes, sure.

Kedar Lele: Nitin. As you remember, I spoke about it last time also, our overall growth has been at 8%. And to give a little more color to how each of the segments have grown, our bikes and cars have been in high single digits. Our CBO has been at 8% again, and our industrial has been at 13%. And with that, we've been able to get to the overall number being at 8%.

And you were also interested last time in rural and this time as well, the rural has continued to grow at 12%. So with 2 of the speedboats in rural and industrial and with high single digit in automotive, we've been able to deliver an 8% volume growth.

Nitin Tiwari: So, 8% overall volume growth on a Y-o-Y basis, right? That's what you mentioned. So are we looking at roughly about 66 million liters of oil? That's the right number.

Kedar Lele: That's correct. Absolutely right.

Nitin Tiwari: Yes. Okay. Great. My second question is around the media news, which was around like carving out of Castrol by BP and divestment in Castrol. So just wanted to understand that what part of Castrol Global's business is Castrol India in terms of volume and profitability? And what is the update on that front, if any?

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Kedar Lele:

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Okay. See, Nitin, at an overall level, we do about a little over 10% of the volume of global Castrol and a little better than that in terms of profitability because our business is structured around 2-wheelers and cars, which is really more profitable part of the business versus the average trucks and the average profitability that you see in the segment. And hence, our profitability is a little better than the 10% or thereabouts for the global.

So it is indeed a very important part of Castrol Global being in South Asia and being in India. And we are also the listed entity. Now BP's decision to carve out Castrol is driven by the global compulsion that a large oil and gas major faces. And it is, the global CEO of BP has said this that they would want to retire the debt and they see in Castrol a good asset that can be monetized.

We do believe that it is good for BP, and it is good for Castrol because Castrol has significant growth ambitions, including growing our core mobility business, expanding our participation in industrial lubricants and of course, enhancing our mobility services and diversifying into data center fluids.

All of these businesses are different from the oil and gas business. And with this, there will be a focus on value creation for Castrol. And hence, it's a good opportunity for the business to become more effective and innovative. So, I have only that much information as it becomes visible, the stock market and you'll be the first person to get to know about it.

Moderator:

Sabri Hazarika:

The next question is from the line of Sabri Hazarika from Emkay Global Financial Service.

Congratulations on a good set of numbers. So, I have two questions. First question is, you have mentioned that you've grown almost like 13% in the Industrial segment. But at the same time, your margins have also held up quite well despite the view that industrial generally has got lower margins.

So, can you throw some light on the industrial segment right now, what kind of like oils you are selling and if you're getting some sort of like premium pricing for that? Because in the past, you have mentioned that metal cutting, and all these are like higher-margin products even in the industrial category. So, can you throw some more light on this?

Kedar Lele:

Sabri Hazarika:

Kedar Lele:

Okay. And is the other question, Sabri?

The second question is now that you are growing at, say, around 7%, 8%, what is the overall, it's a sectoral question, overall growth in the, on the lubricant segment as a whole? And are you gaining market share rapidly in this current scenario?

So let me answer the second question first. That's an easier one and everyone knows those numbers. If you see the automotive lubricant space as per Nielsen or some of the other rating agencies who do the audit, is expected to be in the range of 3.5% to 4.5%. That's the kind of volume growth that we've been seeing. For that, if we are growing by 8% at an overall level, of course, we are gaining shares.

So, our share growth YTD has been about 40 bps. And it's lower than what I would have expected because sometimes the audit agencies don't pick up all of your growth. It's a lagging

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indicator of your growth, and we'll see that in time to come. And hence, with 7%, 8% volume growth, I think we are well placed to keep gaining share despite being a market leader. So that's the first part or the second part of your question.

First part of your question is really interesting. And I'm really happy, Mr. Hazarika, that you kept a track on industrial being a lower margin segment. And while we are celebrating doubledigit growth on that, yet we have been able to deliver profitability. So, it comes with the destiny of being able to manage different levers of the business and then using the benign environment that we have had on the product cost side and, of course, some amount of localization.

So what we used to produce in India in the past versus what we are doing now for industrial is a different ball game because we've been able to localize, as I said in my opening remarks, some of the high-margin products being produced in our own factories and focus has been on offering CMS, which is Chemical Management Services, which are high value, high return and great amount of dependability that customers have on our teams.

That and expansion into sectors which are showing great promise in India includes from electronics, manufacturing, to aeronautical, is what has been our focus. Now as this part of the business grows, would our margin delivery suffer or would take a bit of a hit?

Answer is yes. But I want to operate between a guiding range of 21% to 24%, and we are at the upper end of that guiding range at the moment. And if we operate within that, I think we'll still be a fantastic stock in the company to look out for.

Moderator:

Dhaval Popat:

Kedar Lele:

Dhaval Popat:

Kedar Lele:

Next question is from the line of Dhaval Popat from Choice International Limited.

Congratulations on the great set of results. I have a question regarding now that the new management has taken over the company. I understand that Castrol uses strategic pricing, is a forward-looking pricing. That is what the previous CFO said and has done. So, I want to understand further color on the pricing strategy for the automotive lubricants. I understand you've already explained for industrials? That's my first question.

Okay. Do you have other questions as well, Mr. Dhaval?

So the other question, I actually have 2, but I'll restrict to only one. In the previous conference call, you did guide about the 7 to 8 tests that you are doing for the data centers or lubricants for the data centers. I wanted to understand if there is any further development as well as how do you see the overall volumes in this space, if you can provide a color on that?

Yes. Okay. So strategic pricing that Dipesh would have spoken about in the past is really strategic pricing, which means that Castrol lubricants will continue to command a premium for the quality that we offer and for the brand promise that it comes with.

So even in automotive space, the close watchers would have realized that we have taken pricing in the first half of this year, whether it is on Activ or some of our passenger car lubricants or even part of our commercial lubricants.

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So whenever we have been able to launch an innovation, which comes with additional features, we've been able to take a little bit of a pricing on with that. So that has really worked, and that will continue to be our strategic decision and pricing strategy.

Second is the data center. As I said last time, and let me reinforce that data center testing are quite rigorous, and they go on for a few months. So, and I had mentioned that we have been working with a couple of data center hyperscalers and that partnership continues and the testing is on.

And this is, somebody who can do simple arithmetic could actually decide that if 10% of data centers in India were to become coolant, so you can do 2 ways. I should talk about that again, that you can do direct cooling of the chip through a coolant so that the pipes connect to the processors or you can dip all the processors into a coolant tub and you can cool it. Depending on which method is chosen, a different volume of coolant will be required.

Would we make enough margin on that? Globally, coolants make over $1 per liter kind of a margin. So that's just a number that I'm giving you from U.S. or European market. So, if the number runs in a few million liters with 10 million or 10% of data center shifting, then that would be the kind of number that you could get to.

But those are numbers that will start coming in once the industry changes, once the civil work happens in those data centers to start using coolants for temperature management. So, it's still a little far away.

And I will, of course, announce when the first customer we are able to acquire and make it happen. But suffice it to say that one, technology progress has happened. We are working very closely with the hyperscalers and the data center operators. And when they make the decision, we would be at the front line of implementing those solutions with them.

Moderator:

Shloka Mehta:

Kedar Lele:

We'll take our next question from the line of Shloka Mehta, an Individual Investor.

So, I just have two questions from my side. First, I wanted to understand where do you see your growth coming in from over the next few quarters? And secondly, what kind of work are we doing in our industrial portfolio? And what kind of margins do we make there? If you could share some light on that?

Thanks, Ms. Mehta. Where would the growth come from? See, if you look at our last few years of performance, the growth has always come from the core. And we've been able to move our business with the change in the automotive space.

What do I mean by that? 20 years ago, Castrol was known to be a truck oil company, right? So if you remember, Castrol was always equivalent to CIB. So people knew that Castrol is the CIB oil company. Then we launched the Castrol Activ because 2-wheelers are growing, aftermarket was large and then Activ and POWER1 became the mainstay.

And because it was consumer, you also saw those brands very, very often in mass media. Then we saw that the 4-wheeler were becoming more commonplace. People were, more households

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were beginning to own 4-wheelers. So, we brought in not just the GTX, which was the most well-known brand of lubricants from the U.S. to the Australia, but we also got in MAGNATEC as well as EDGE.

So, you saw MAGNATEC in offering for the last 10 years plus, and you saw EDGE being relaunched last year with SRK. So, you can see how the portfolio is shifting in favor of how the automotive space is undergoing a change. So, in the future, we will continue to stay focused on bike expansion.

And today, I spoke about it a while ago that more than 55% of the bikes sold in India are being sold in rural India. So if every household is in rural India is aspiring to have a bike, those bikes look beautiful when they run. And when they have to be taken to a mechanic, it's a mess because in rural India, you don't find mechanics like you find in urban centers.

So we are now focusing on that expansion because even if there was an EV revolution that's upon us, this large park that exists in India and the expansion that's happening beyond urban will continue to fuel the growth for the company. So that's one example of how our focus on shifting spaces in automotive and our Bharat strategy will continue to fuel the growth in the next few quarters to come.

Now industrial at an overall level, I give you macro numbers. Industrial, so for example, if we are making a gross margin, so just for sake of it, if you think about it, if an oil company makes $1 of margin, gross margin from automotive average, then will make about $0.5 margin. That's the kind of numbers that exist at a global level.

So if you were to keep expanding, so a business that grows at 2x brings in half the level of margin could still be a beautiful business to look at because the delta will be much sharper. But does that affect the overall business to a certain extent, and that's why the EBITDA pathway or the guideline between '21 to '24 could be very, very good for this company for many years to come. I hope I've been able to answer your question, Ms. Mehta.

Shloka Mehta:

Moderator:

Sana:

Kedar Lele:

Yes.

Next question is from the line of Sana, an Individual Investor.

Sir, my first question is what is the kind of investment is being pumped in our rural push that is from a marketing budget? And another question I have is what are our views and strategies on our non-lubricant products like the ancillary product portfolio, example, accessories, etcetera?

Both of them are relevant questions. So, first is, see, investment in rural push happens at 3 levels, right? Because investment is not just in terms of funds, but also resources, also people, efforts and of course, then the investments that you make in marketing.

So, when we were to expand in rural, we first appointed our sub-distributors. So now we have about 1,000 sub-distributors across India. Those 1,000 sub-distributors bring in dealers where the numbers are much larger. Of course, 1:30 ratio. So you can imagine that about 30,000, 35,000 retailers come into our reach.

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Then there is investment in creating what I call and what we very proudly call as Castrol quick lube chain stations. And these are what exists in rural India now. I'm not talking about numbers as yet, but I'll talk about numbers later in the year when they reach a sizable potential, but those are Castrol's presence in the rural area, and there's a capex involved in that.

Then comes the marketing spend that we do for Bharat. And if you look at our balance sheet and if you look at our numbers, we spend between 3% to 4% of our turnover in advertising and sales promotion.

And the third part of this investment goes into mechanic advocacy and training because most mechanics do get some amount of training from our side under Eklavya. They also get some amount of training in terms of their capability building, information on new kinds of machines and businesses that they should be handling new kinds of pollution norms and the kind of oils which are required in the latest machines. And all of that also requires investments, which gets funded from our ASP numbers, which I spoke to you about.

Now second question, non-lubricant. We are very excited about our Auto Care range of products. And last year, I can tell you that in the first half of this year, we have sold 100% more volume than what we did in the whole of last year. So that should tell you the excitement that we have had.

In the month of June, only on e-commerce, we sold about 27,000 pieces of Auto Care products, which means that the Castrol is a lot more visible, has opportunity to interact with customers beyond lubricants and will also drive brand equity in the time to come.

Moderator:

Sana, does that answer your question?

Sana:

Yes.

Moderator: We'll take our next question from the line of Nitin Tiwari from PhillipCapital India.

Nitin Tiwari:

My question is actually related to the ethanol impact on automotive engines. So there's a debate going on around how mixing of ethanol and petrol could be impacting automotive engines. So just wanted to understand are our products also evolving to address those issues?

And have you introduced any product lines or have you made any changes in the product as such, I mean, to address that concern that consumers might have. So that's one. Secondly, if you can also help us understand your sales mix right now in terms of, if you can break it down for – CV and industrial oil, as of this quarter?

Kedar Lele:

Sorry, I lost you saying sales mix, break it into?

Nitin Tiwari: Automotive between personal mobility and CV and then what portion is industrial in the overall mix right now?

Kedar Lele:

Yes. Okay. Understood. Yes, we have spoken about it in the past, and I'll do that for you. So, first is, does ethanol impact Indian performance? See, all of us as consumers and as conscious consumers must realize that ethanol mixing is a requirement that government of India has put

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forth. And if you look at some of the other countries of the world, including Brazil, ethanol goes up to 40%, 50% of the fuel. It does have an impact on engines performance, but that's what OEMs work with.

So, most of our automotive brands in India are preparing engines, which can handle flex fuel. And with that, the requirement from engine oil also changes. So, we have been working with OEMs. Our products are capable of handling e20, e30, and that description does come on the packs.

So, you can be rest assured that the evolving requirements that consumers have from their bikes in terms of ethanol mixed fuel will be taken care of as long as they are putting Castrol in their machines. So put Castrol and don't worry about the performance is what I would say.

Second is the sales mix for the latest quarter, which is Q2, or you can also take an overall level, our personal mobility has contributed to 43%, CBO is about 44% and industrial has been about 12%. That's our contribution for this year.

Moderator:

Nitin, does that answer your question? Nitin, we are unable to hear you Nitin, I think you're on mute.

Since there is no response, we'll move on to the next question from the line of Nakul Dev from ND Investments.

Nakul Dev:

Kedar Lele:

Congratulations on a good set of numbers. Just had one or two questions. Yes I just wanted to understand what your advertising expenses for this quarter. Also, have you taken any price hikes? And have you added any new OEMs? That's all I wanted to understand.

Okay. Our advertising expense for the quarter is in the same range bound and the exact amount is INR46 crores, which is actually a bit lesser than what we did in the base. But for the first half of the year, our advertising expense is higher by 20%.

So if you're watching our results, you would have heard me say that we are going to be bumping up our advertising and sales promotion expenses in the beginning of the year in order to support the growth momentum, and we have been able to do that.

In the base, we did have SRK's campaign for EDGE. And hence, we had spent a little more in last year. But this year, in Q2, we have been able to it to about INR46 crores. So that's exactly for the advertising expense that you asked for.

Second, have we taken a price hike? Yes, we have. Selective price hikes have been taken across the portfolio. There have also been a few cases of price drops in our drivelines and specialties and coolants. But the selective price hike that we've taken has given us about 1.5% kind of a delta only coming from price in this quarter.

Having said that, a new OEM, there is no new brand of OEM, but we have started working for a range of vehicles with new motors. And with Tata, we have been working any between in that. So, we've been working with Tata in the past with them, the partnership is deeper. But there's no

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new OEM. There are not many OEMs left. We don't work with Koreans at the moment, which I hope we will be able to make an entry into in the time to come.

Moderator:

We'll take our next question from the line of Gaurav Jain from ICICI Prudential Mutual Fund.

Gaurav Jain:

I have a question on other income, sir. From a run rate perspective, what we have delivered in this quarter is on the lower side. So, if you can help us understand, and similarly, the working capital was also a little higher. So, is both linked? Or how should we be looking at both these things?

Kedar Lele:

I must congratulate you for that observation. Indeed, other income has gone down in this quarter by about INR11 crores. But you remember that when I announced the last quarter results, there was a special dividend announced by us, and that took a large part of our cash reserves being distributed to shareholders.

So, with that, our interest income came down by about INR8 crores. So that is a big impact on other income. We also had a sale of a property in the past quarter, which is not there anymore. And hence, what you're seeing is like-for-like results lower by INR11 crores on the other income. So that's your first question. What was the second question you asked? I did not make a note...

Gaurav Jain:

On working capital, if we look at…

Kedar Lele: See, 2 things are happening, Gaurav. The volume growth is upon us. And when the volume grows, you do increase the inventory. And there has been also an abnormal supply situation in Southeast Asia. Exxon has taken down their refinery for maintenance, which meant that we had to look at other sources as well as stock a little more of base oil to be able to meet the market demand. And hence, our stock went up a bit.

We've also compensated it with some amount of our trade payables, but our trade receivables have also gone up a bit because of expansion into B2B, expansion into industrial and some amount of disruption that we saw in J&K. But these are momentarily, these are temporary changes, and we will come back to our most efficient working capital that you are used to seeing in a while.

Gaurav Jain: That was very helpful and explanatory, sir. Just one follow-up on other income. So should we be expecting this to be the new run rate is one question? And second, sir, if we look at the cash position that we have, it is upwards of INR860-odd crores that we have. So INR860 crores should lead to higher than INR10 crores per quarter, sir, other income if we would have invested in any fixed deposit type of instrument also. So if you can elaborate on this, please?

Kedar Lele: Yes, sir. So, you should expect this to be a run rate in the future. And your sharp eye would have also picked up that earlier, our cash position was higher by about INR550 crores, which is the dividend -- special dividend that we paid out.

So, on an average, a large cash-generating company with the FD rates where they are and this morning the monetary policy and the 3 rate cuts that you have seen in this year would also bring

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Castrol India Limited 6 August 2025

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down the FDs to the, to a lower level than what we were all used to. But going forward, what you're seeing in other income should be the expected run rate in the future.

Moderator: We'll take our next question from the line of Vipulkumar Anopchand Shah from Sumangal Investments.

Vipulkumar Shah: Would you repeat the volume figures for this quarter? And what were the same for corresponding quarter of last year and last quarter also? Kedar Lele: So, this quarter, our overall volumes are 66 million. They are up by 5 million. So last year, same time was 61 million. And Q1, the last quarter was, I think, 62 million, correct? Moderator: Thank you. Ladies and gentlemen, this brings us to the end of the call. On behalf of Castrol India Limited, I thank you all for joining this conference. You may now disconnect your lines. Wish you a good day ahead. Thank you.

Kedar Lele: Thank you.

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