Castrol India Limited — Q1 FY26

Castrol India Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=2bekGF4u2TA Published: 9 months ago

0:01 1 second Ladies and gentlemen, welcome to our two Q and one edge earnings conference call for Castrol India Limited. Please note that all participant lines will be in 0:10 10 seconds the listenon mode and you can ask your questions after the opening statements. 0:14 14 seconds If you need assistance during the call, please press star then zero on your touchstone phone to reach the operator. 0:21 21 seconds Please note that this call is being recorded. Also, please note that this conference call may contain certain forward-looking statements which are 0:28 28 seconds based on the belief, opinions, and expectations of the company as on date of this call. These statements are not a 0:35 35 seconds guarantee of future performance and involve risk and uncertainties that are difficult to predict. 0:42 42 seconds We have with us today Mr. Kdar Lelayle, managing director, Castrol India Limited and Miss Mirini Shiniasan, Chief Financial Officer, Castrol India 0:50 50 seconds Limited. I now hand the conference over to Mr. Lele for his opening remarks. Thank you and over to you sir. 0:59 59 seconds Good afternoon and namaskar uh to everyone. Welcome to Castrol India second quarter and first half analyst 1:07 1 minute, 7 seconds call for 2025. Thank you very much for joining us today. As you might already be aware our reporting follows the Jan 1:14 1 minute, 14 seconds to December calendar year. Hence it is the first half and Q2. But before we start, I'm happy to introduce Miss Sinas 1:22 1 minute, 22 seconds to you today. Uh she's our CFO who's been on board for over a week now and she comes to us with over 17 years of 1:30 1 minute, 30 seconds experience at PNG India where she held a range of finance leadership roles across business units and geographies including Asia, the Middle East and Africa. 1:41 1 minute, 41 seconds Welcome Rali and uh could you introduce yourself? 1:45 1 minute, 45 seconds Thank you K. Hi everyone. I'm very excited to be here. Uh my first week has been a very warm and welcoming week 1:51 1 minute, 51 seconds indeed. In my last role, I served as the chief financial officer for Proctor and Gamble hygiene and health in I was also 1:59 1 minute, 59 seconds the group controller for PNG group in India. I look forward to interacting with all of you over course. Back to you G. 2:06 2 minutes, 6 seconds Thanks. Welcome once again. Uh that said, let's get into the caps for India's performance in the 2Q and first half of 2025. 2:16 2 minutes, 16 seconds 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 2:24 2 minutes, 24 seconds continued focus on innovation across products and services, broadening our distribution footprint and investment in 2:31 2 minutes, 31 seconds our brand has really translated into growth in volumes despite the macroeconomic challenges and volatilities that you all know. 2:40 2 minutes, 40 seconds This demonstrates the company resonance and diverse portfolio that helps us navigate these various market cycles. 2:49 2 minutes, 49 seconds Some key points revenue from operations from the second quarter 25 grew 7% year 2:56 2 minutes, 56 seconds on year to 1497 crit stood at 349 cr representing a growth of 3:05 3 minutes, 5 seconds 8%. Pass in this quarter increased 5% yearon year coming in at 244 cr. And 3:14 3 minutes, 14 seconds these numbers translate to half year in this manner that the revenue for the first half of the year also grew 7% to 3:24 3 minutes, 24 seconds 2,919 cr. Edit stands at 657 cr up 7%. patch 3:33 3 minutes, 33 seconds grew at 6 and a half% adds to that 477 cr. Additionally delighted that board 3:41 3 minutes, 41 seconds has recommended an interim dividend of rupees 300 rupees three and 505 three 3:47 3 minutes, 47 seconds and a half rupees per share subject to shareholders approval. 3:53 3 minutes, 53 seconds The growth in top line is primarily being driven by expanding reach across rural markets and our increasing 4:00 4 minutes presence in industrial segment. This was further supported by trending associations with OEMs. Our disciplinary 4:08 4 minutes, 8 seconds expense management and operational efficiency help maintain margin which reflects our ability to execute growth 4:15 4 minutes, 15 seconds strategies without compromising on profitability despite headwinds from input cost volatility and of course the 4:23 4 minutes, 23 seconds competitive market. Overall, our strategic focus is on bolstering our product portfolio as well as distribution network and developing 4:31 4 minutes, 31 seconds end-to-end solutions that combine service delivery with product sales. 4:36 4 minutes, 36 seconds Aligned with the Vix Bhara goals, the industrial segment is a major focus area for us and this is seeing a robust double-digit growth for the company. 4:46 4 minutes, 46 seconds We've been able to establish strong customer relations and acquisitions through valueled engagement. We brought 4:54 4 minutes, 54 seconds our globally acclaimed metal working fluids MB50 and ISOL 20XDB range to the Indian market through local production. 5:05 5 minutes, 5 seconds This would enable faster delivery and superior value creation. Product launches such as 5:12 5 minutes, 12 seconds highol serve now more than 100 customers across automotive tube bearing and metal 5:20 5 minutes, 20 seconds manufacturing sectors. Our chemical management services what is called as TMS offering is gaining strong momentum 5:29 5 minutes, 29 seconds is now operational at multiple sites and this model goes beyond selling lubes and chemicals. We take end to end 5:36 5 minutes, 36 seconds responsibility across the chemical life cycle delivering efficiency compliance and value to our customers. This value 5:45 5 minutes, 45 seconds added service is being received very well amongst the customers. 5:50 5 minutes, 50 seconds Now let me touch upon our bhat portfolio. Our bhat strategy that we've been talking about for last few quarters 5:57 5 minutes, 57 seconds is serving well because in this strategy we laid out two pillars. One is to make 6:06 6 minutes, 6 seconds our brand and our product more relevant for the belly of the market. So larger consumer franchise gets exposed to cash 6:15 6 minutes, 15 seconds brands and then taking the brand to a wider distribution network to rest of the country. So it means the mafal towns of India as well as in rural areas. 6:27 6 minutes, 27 seconds We've also digitized our distributor management system to the next level across our distributors as well as rural 6:36 6 minutes, 36 seconds cast subdistributors who help us deliver this reach consistently. 6:42 6 minutes, 42 seconds Let me also talk about widening our market access through our multi- channelannel approach. Uh you remember I 6:49 6 minutes, 49 seconds kept talking about over 140,000 outlets in the past. Now we are present in over 160,000 outlets including 32,000 plus 6:59 6 minutes, 59 seconds bike points, over 11,000 multibrand car workshops and a wider dealer network. We continue to expand our Castrol auto 7:07 7 minutes, 7 seconds service network to offer reliable services in the aftermarket. At present we support over 730 workshops in over 7:16 7 minutes, 16 seconds 340 cities. our entire autoare product range and auto care product range 7:23 7 minutes, 23 seconds includes uh shiners, sponges, cloths and so on uh are now available across 7:31 7 minutes, 31 seconds e-commerce, modern trade and over 50,000 houselets in India. 7:37 7 minutes, 37 seconds Volume growth has been seen across segments with steady volume performance 7:43 7 minutes, 43 seconds in core sectors or core categories where we have either maintained or expanded our market share. Our overall market 7:52 7 minutes, 52 seconds share stands in over 20% and the key growth categories included commercial 7:59 7 minutes, 59 seconds vehicles, specialities, bikes, cars, autocare products, B2B and especially industrial where we have now seen 8:08 8 minutes, 8 seconds consistent growth for nine quarters and due to growth in industry being at 13%. 8:15 8 minutes, 15 seconds We are looking at building Castro into a serviceled dig enabled mobility brand because we continue to leverage tech for 8:23 8 minutes, 23 seconds both customer convenience and mechanic empowerment. very very important and relevant is the flagship mechanic 8:31 8 minutes, 31 seconds connect app called fast scan which is being used by over 1 million mechanics in India and on many days in this 8:39 8 minutes, 39 seconds quarter over 200,000 transactions were recorded by these mechanics who are our big big advocates in the market. We 8:48 8 minutes, 48 seconds upgraded our distributor management system to enhance agility and transparency across channels and we also advanced our own relationships 8:57 8 minutes, 57 seconds sustainability sustainability and circularity agenda in the core. We are the first in my opinion a large 9:06 9 minutes, 6 seconds lubricant manufacturer who've been able to not just develop but commercially produce 9:13 9 minutes, 13 seconds uh first of its kind RBO based engine oils for DS4 vehicles and this we've 9:19 9 minutes, 19 seconds done in partnership with the leading OEM and it will keep growing with more partners coming in to develop circular 9:28 9 minutes, 28 seconds and redefining ecosystem in terms of initiatives towards our brand and consumer connect. We concluded our cash flow active relaunch campaign. 9:38 9 minutes, 38 seconds You remember I spoke about it with Delhi 3 production that leads more than 258 9:45 9 minutes, 45 seconds million consumers in mass media and our brand building initiatives have continued this quarter with our 9:52 9 minutes, 52 seconds participation in Metraats and Valley Run 2025 where Castrol Edge powers the 300k 9:59 9 minutes, 59 seconds club of supercars reaching about 3 million biking and racing enthusiasts at an overall level. We've always taken 10:07 10 minutes, 7 seconds pride in being at the forefront of cultivating industry leading norms and consequently we we are well recognized 10:15 10 minutes, 15 seconds for upholding these standards. Our Pata plant has received the golden peacock 10:22 10 minutes, 22 seconds award for occupational health and safety. In fact was last time this time 10:29 10 minutes, 29 seconds our silvata plant has received the golden peacock award. Correct there. uh but it tells you that consistently our 10:36 10 minutes, 36 seconds plans keep receiving awards for being best on quality or safety. Last but not least, I should also talk about our 10:44 10 minutes, 44 seconds annual report which all of you did appreciate and did take a look at. Last year's annual report won platinum at the 10:51 10 minutes, 51 seconds LPT spotlight awards. All these initiatives support our study that revolve around our course 10:59 10 minutes, 59 seconds value and the way the industry is evolving in general. We expect robust growth coming in from our industrial 11:07 11 minutes, 7 seconds 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. 11:16 11 minutes, 16 seconds Looking ahead, our focus shall remain on delivering high quality products and services to the automotive and industrial sectors. Our expanding 11:25 11 minutes, 25 seconds network is really a testament to Castrol becoming more and more accessible and affordable for consumers to the length and breadth of our country. 11:35 11 minutes, 35 seconds Our overarching strategy is to leverage the opportunities in industrial bat and driven delivery which we are confident 11:43 11 minutes, 43 seconds will build customer value over the longer term. That's all that I would like to update you about at this center. 11:49 11 minutes, 49 seconds Thank you for your attention. Uh we now invite you to share any questions, feedback or views as we open the floor for discussions. Thank you. 12:00 12 minutes Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 12:07 12 minutes, 7 seconds and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 12:19 12 minutes, 19 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 12:32 12 minutes, 32 seconds We'll take our first question from the line of Nitan Tari from Philip Capital, India. Please go ahead. 12:39 12 minutes, 39 seconds Hi, good day. Thanks for the opportunity. Um, I have uh two questions. The first is around your volume. if you can give us the volume number for the quarter and provide some 12:48 12 minutes, 48 seconds more color on how the different segments have grown in this quarter uh in terms of automotive non-motive and I I 12:56 12 minutes, 56 seconds understand that you gave um give a broad overview in your incomings but some more details would be appreciated uh that is 13:04 13 minutes, 4 seconds one and I'll ask me second after that uh Nan can you please mute your line there's some background disturbance on 13:11 13 minutes, 11 seconds your connection thank you yeah Thanks. Uh as you remember I spoke about 13:20 13 minutes, 20 seconds 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 13:29 13 minutes, 29 seconds grown our bikes and cars have been in high single digits. Our CEO has been at 8% again and our industrial has been at 13:38 13 minutes, 38 seconds 13. uh and with that we've been able to get to the overall number being at 8 and you're also interested last time in 13:46 13 minutes, 46 seconds rural and this time as well the rural has continued to grow at 12%. Uh so with 13:52 13 minutes, 52 seconds two of the uh speedboards in rural and industrial and with high single digit in 13:59 13 minutes, 59 seconds automotive we've been able to deliver a 8% volume growth. 14:05 14 minutes, 5 seconds Uh thanks very helpful. So um u 8% overall uh volume growth on a y basis right that's what you mentioned so are 14:13 14 minutes, 13 seconds we uh looking at uh roughly about 66 million uh um liters of oil that's that's uh the right number 14:21 14 minutes, 21 seconds that's correct that's correct absolutely right yeah okay great um my second question is around um the the media news which was 14:31 14 minutes, 31 seconds around which was around uh like you know carving out of cash and by DP and and uh you know investment in in cash. So just 14:39 14 minutes, 39 seconds wanted to understand that um what part of uh Cashall Global's business is Cashall India in terms of volume and profitability and what is uh the update on that uh front gipping. 14:54 14 minutes, 54 seconds Okay. uh see uh at an overall level uh we do about uh a little over 10% of the 15:03 15 minutes, 3 seconds volume of uh of global cash flow uh and a little better than that in terms of profitability. 15:11 15 minutes, 11 seconds uh because our business is structured around two-wheelers uh and and and cars which is really more 15:20 15 minutes, 20 seconds 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 15:28 15 minutes, 28 seconds little bit better than the 10% or thereabout for the global uh so it is indeed a very important part of cash 15:36 15 minutes, 36 seconds global uh being in South Asia and being in India and we are also the listed entity Now's 15:43 15 minutes, 43 seconds decision to carve out cashrol is driven by the global uh compulsions that a large oil and gas major faces and it is 15:51 15 minutes, 51 seconds in you know the the global CEO of DP has said this that they would want to retire the debt and they see in cash a good 16:00 16 minutes asset that can be monetized. uh we do believe that it is good for uh BC and it's good for Castrol because Captor has 16:08 16 minutes, 8 seconds significant growth ambitions including growing our core mobility business expanding our participation investing dividends and of course enhancing our 16:16 16 minutes, 16 seconds mobility services and diversifying into data center all of these businesses are different from the oil and gas business 16:23 16 minutes, 23 seconds and with this there will be a focus on value creation for Castro and hence it's a good opportunity for the business to become more effective 16:32 16 minutes, 32 seconds innovator. So I have only that much information as it becomes visible uh you know the stock market and you'll be the first person to get to know about it. 16:43 16 minutes, 43 seconds Great. Uh thank you. Thank you so much for back in the queue. 16:48 16 minutes, 48 seconds Thank you ladies and gentlemen. In order to ensure that management is able to answer queries from all participants, kindly restrict your questions to two at 16:56 16 minutes, 56 seconds a time. You may join by the queue for follow-up questions. 17:00 17 minutes The next question is from the line of Sabri Hazarika from NK Global Financial Service. Please go ahead. 17:07 17 minutes, 7 seconds Yeah, good afternoon sir and uh congratulations on good set of numbers. 17:11 17 minutes, 11 seconds Uh so I have two questions. Uh first question is uh you have mentioned that you've grown almost like 13% in the industrial segment but at the same time 17:19 17 minutes, 19 seconds uh your margins have also held up quite well uh despite uh the view that industrial generally has got lower margins. So can you throw some light on 17:28 17 minutes, 28 seconds uh the uh 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 17:37 17 minutes, 37 seconds because uh in the past you have mentioned that metal cut cutting and all these are like higher margin products even in the industrial category. So can you throw some more light on this? 17:48 17 minutes, 48 seconds Okay. And is there another question uh Sam? 17:53 17 minutes, 53 seconds Yeah. Second question is now that you are growing at say around 7 8% what is the overall uh it's a sectoral question overall growth in the uh on the 18:02 18 minutes, 2 seconds lubricant segment as a whole and uh and are you gaining market share rapidly in this current scenario. 18:10 18 minutes, 10 seconds Yeah. Okay. Uh so let me ask you the second question first that's easier one and everyone knows those numbers. If you 18:18 18 minutes, 18 seconds see the uh automotive limiting space as for some of the other uh rating agencies 18:26 18 minutes, 26 seconds who do the audit uh is expected to be in the range of three and a half to four and a half that's the kind of volume growth that we've been seeing on that if 18:34 18 minutes, 34 seconds they are growing by 8% at an overall level of course we are giving shares so our share growth YTD has been about 40 18:42 18 minutes, 42 seconds bits uh and uh it's it's lower than what I would have expected because sometimes times the audit agencies don't pick up 18:49 18 minutes, 49 seconds all of your growth. It's a lagging indicator of your growth and we'll see that in time to come. Uh and hence with 78% volume growth I think they're well 18:58 18 minutes, 58 seconds placed to keep gaining share despite being a market leader. So that's the first part of the second part of your question. Now first part of your 19:05 19 minutes, 5 seconds question is really interesting and I'm really happy Mr. that you get to track on industry being a lower margin segment 19:14 19 minutes, 14 seconds and while we are celebrating double digit growth on that yet we've been able to develop profitability. So it comes with the dexterity of being able to 19:23 19 minutes, 23 seconds manage different levers of the business and then using the benign environment that you that we have had on the product 19:31 19 minutes, 31 seconds cost side uh and of course some amount of localization. So what we used to produce in India in the past versus what 19:40 19 minutes, 40 seconds we are doing now for industrial is a is a different uh ball game because we've been able to localize as I said in my 19:48 19 minutes, 48 seconds opening remarks some of the high margin products being produced in our own factories and focus has been on offering 19:55 19 minutes, 55 seconds CMS which is chemical management services which are high value high return and great amount of dependability that customers have on our teams. 20:06 20 minutes, 6 seconds that and expansion into sectors which are showing great promise in India includes from electronics manufacturing 20:14 20 minutes, 14 seconds to aeronautical is what has been uh 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? 20:26 20 minutes, 26 seconds Answer is yes. But I want to operate between a between a you know a a guiding range of 21 to 24 and we are at the at 20:35 20 minutes, 35 seconds 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 a company to to look out for. 20:46 20 minutes, 46 seconds Thank you so much uh for this explanation and wish you all the best. Thanks. Thank you. Thank you. 20:53 20 minutes, 53 seconds Before we take the next question, would like to remind participants to press star and one to ask a question. 20:59 20 minutes, 59 seconds Next question is from the line of DAL Popit from Choice International Limited. Please go ahead. 21:07 21 minutes, 7 seconds Yeah, congratulations on the great set of results. U I I have a question regarding now that the new management 21:14 21 minutes, 14 seconds has taken over the company. I understand the cashall uses strategic uh uh pricing. It's a forward gipping pricing. 21:21 21 minutes, 21 seconds That is what the previous CFO said and has done. So I want to understand further color on the pricing strategy 21:28 21 minutes, 28 seconds for the automotive lubricants. I understand you already explain it for industry. That's my first question. 21:36 21 minutes, 36 seconds Okay. Uh you have other question as well Mr. 21:41 21 minutes, 41 seconds Uh so the other question I actually have uh two but I'll respect to only one. In the previous uh conference that you did 21:49 21 minutes, 49 seconds guys about the uh sharing to a test that you are doing for the data centers for the data centers I wanted to understand 21:56 21 minutes, 56 seconds 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. 22:06 22 minutes, 6 seconds Okay. Uh so strategic pricing that the debate we have spoken about in the past uh is really strategic pricing which 22:13 22 minutes, 13 seconds means that cast lubricants will continue to command a premium for the quality that we offer and for the brand promise 22:20 22 minutes, 20 seconds that it comes with. Uh so even in automotive space uh the watch the the closed watchers would have realized that 22:28 22 minutes, 28 seconds we have taken pricing in the first half of this year uh whether it is on active or uh some of our passenger car 22:36 22 minutes, 36 seconds lubricants or even part of our commercial uh lubricants. So whenever we we've been able to launch an innovation 22:43 22 minutes, 43 seconds which comes with additional uh features we've been able to take a little bit of a writing on on with that. So that has 22:50 22 minutes, 50 seconds really worked and that will continue to be our strategic uh you know decision and pricing strategy. Uh second is the 22:59 22 minutes, 59 seconds data center. Uh as I said last time and let me reinforce that data center testing are quite rigorous and they go 23:08 23 minutes, 8 seconds on for a few months. So and I mentioned uh that we've been working with a couple of uh data center uh hyperscalers and 23:18 23 minutes, 18 seconds that partnership continues and the testing is on and and this is you know somebody who can do simple arithmetic 23:26 23 minutes, 26 seconds could actually decide that if 10% of data centers in India wanted to become 23:32 23 minutes, 32 seconds uh you know coolant uh so you can do two ways you know I should talk about that 23:39 23 minutes, 39 seconds again that You can do direct cooling of the chip through a coolant so that the pipes connect to the processor or you 23:48 23 minutes, 48 seconds can dip all the processors into a coolant tub and you can cool it. 23:53 23 minutes, 53 seconds Depending on which which method is chosen a different volume of coolant will be required. Uh would we make 24:01 24 minutes, 1 second enough margin on that? Globally coolants make over a dollar per liter kind of a margin. uh so that's just a number that 24:09 24 minutes, 9 seconds I'm giving you from US or or European market. So if the number runs in a few million liters with 10 million or 10% of 24:18 24 minutes, 18 seconds of data centers shifting then that would be the kind of number that you could get to but those are numbers that will start 24:25 24 minutes, 25 seconds coming in once the industry changes once the once the civil work happens in those data centers to start using coolants for 24:35 24 minutes, 35 seconds for temperature management. So it is it is still little far away. Uh and I will of course announce them the first 24:42 24 minutes, 42 seconds customer we are able to acquire and make it happen. But suffice it to say that one technology progress has happened we 24:50 24 minutes, 50 seconds are working very closely with the hyperscalers and the data center operators and when they make the decision we will be at the front line of implementing those solutions with them. 25:05 25 minutes, 5 seconds Okay. Thank you. Thank you. Thank you. 25:10 25 minutes, 10 seconds We'll take our next question from the line of Shloka Meta, an individual investor. Please go ahead. 25:17 25 minutes, 17 seconds Hi. Uh thank you for the opportunity. Uh so I just have two questions from my side. First I wanted to understand uh 25:25 25 minutes, 25 seconds where do you see your growth coming in from over the next uh few quarters and secondly what kind of work are we doing 25:34 25 minutes, 34 seconds in our industrial portfolio uh and what kind of margins uh do we make there if you could uh share some light on that. 25:44 25 minutes, 44 seconds Okay. Uh thanks Ma. Uh where did the growth come from? uh if you if you look at our our last few years of 25:53 25 minutes, 53 seconds performance, the growth has always come from the core uh and we've been able to move uh our business with the change in 26:02 26 minutes, 2 seconds the automotive space. What do I mean by that? 20 years ago, Castrol was known to be a a truck oil company, right? Uh so 26:12 26 minutes, 12 seconds if you if you remember, Castrol was always implemented in CRV. So people knew that Castrol is the CRB oil company. Then we launched the casual 26:21 26 minutes, 21 seconds active because two wheelers were growing. Aftermarket was large was large and then active and power one became the 26:28 26 minutes, 28 seconds mainstay and because it was consumer you also saw those brands uh very very often in mass media. Then we saw that the 26:35 26 minutes, 35 seconds four-wheeler uh were becoming more common place. 26:39 26 minutes, 39 seconds People were you know more households were beginning to own four-wheelers. So we brought in uh not just the GTX which 26:46 26 minutes, 46 seconds was the most well-known uh brand of lubricants from the US to the Australia but we also brought in magnetic as well 26:53 26 minutes, 53 seconds as edge. So you saw magnetic in in in offering for last 10 years plus and you saw edge being relaunched last year with 27:01 27 minutes, 1 second SRK. So you can see how the portfolio is shifting in favor of how the automotive 27:08 27 minutes, 8 seconds space is undergoing a change. So in the future we will continue to stay focused 27:15 27 minutes, 15 seconds on bike expansion and today you know I I spoke about it a while ago that more than 55% of the bikes sold in India are 27:23 27 minutes, 23 seconds being sold in rural India. So if every household is is in rural India is aspiring to have a bike you know those 27:31 27 minutes, 31 seconds bikes look beautiful when they run and when they have to be taken to a to a mechanic it's a it's a mess because in 27:38 27 minutes, 38 seconds rural India you don't find mechanics like you find in other centers. So we are now focusing on that expansion because even if there was an EV 27:46 27 minutes, 46 seconds revolution that's upon us, this large park that exists in India and the expansion that's happening beyond urban 27:53 27 minutes, 53 seconds will continue to fuel the growth of the company. So that's one example of how our focus on on shifting spaces in 28:02 28 minutes, 2 seconds automotive and our bat strategy will continue to fuel the growth in the next few quarters to come. Now industrial at 28:11 28 minutes, 11 seconds an overall level you know I give you macro numbers industrial so for example if we are making uh gross margin so just 28:20 28 minutes, 20 seconds for sake of it if you think about it if a oil company makes a dollar of margin gross margin uh automotive average they 28:29 28 minutes, 29 seconds will make about half a dollar margin industry that's the kind of numbers that exist at a global level so if you were to keep expanding so a business that 28:38 28 minutes, 38 seconds grows at 2x brings in half the level of margin could still be a beautiful business to look at because the delta 28:44 28 minutes, 44 seconds will be will be much sharper but does that affect the overall business to a certain extent and that's why the thera 28:54 28 minutes, 54 seconds pathway or the guides or the guidelines between 21 to 24 could be very very good for this company for many years to come 29:03 29 minutes, 3 seconds I hope I've been able to answer your question ma yes uh that's from on my side. Thanks a lot. 29:11 29 minutes, 11 seconds Thank you. 29:13 29 minutes, 13 seconds Ladies and gentlemen, to ask a question, please press star N1 on your phone. Now, next question is from the line of Sana, an individual investor. Please go ahead. 29:24 29 minutes, 24 seconds Hi sir, thank you for the opportunity. 29:26 29 minutes, 26 seconds So my first question is what is the kind of invest investment is being pumped in our ruler uh push that is from a 29:33 29 minutes, 33 seconds marketing budget and the other another question I have is what are our views and strategies on our 29:41 29 minutes, 41 seconds on our non-lubricant products like the ancillary product portfolio example accessories etc. 29:49 29 minutes, 49 seconds Okay. 29:51 29 minutes, 51 seconds Uh thank you. Both of them are relevant questions. So the first is see 29:58 29 minutes, 58 seconds investment in rural push happens at three levels right because investment is not just in terms of funds but also 30:05 30 minutes, 5 seconds resources also you know people effort uh and of course then the investment that you make in in marketing. So when we 30:14 30 minutes, 14 seconds were to expand in Google we first appointed our subdistributors. So now we have about thousand subdistributors 30:21 30 minutes, 21 seconds across India. So thousand subdistributors bring in dealers uh where the numbers are are much larger. 30:30 30 minutes, 30 seconds Okay 1 is to 30 ratio. So you can imagine that about 30 35,000 retailers come into our our uh our reach. Then 30:39 30 minutes, 39 seconds there is investment in creating what I call and what we very proudly call as uh 30:46 30 minutes, 46 seconds castrol quick lube change stations and these are uh what exist in rural India now uh I'm not talking about numbers as 30:55 30 minutes, 55 seconds yet but I'll talk about numbers later in the year when they reach a sizable potential but those are cash presents in 31:02 31 minutes, 2 seconds the rural area and there's a capex involved in that then comes the marketing spend that we do for bat And 31:09 31 minutes, 9 seconds if you look at our balance sheet and if you look at our numbers, we spend between 3 to 4% of our turnover in 31:16 31 minutes, 16 seconds advertising and sales promotion. Uh and the third part of this investment goes into mechanic advocacy and training 31:25 31 minutes, 25 seconds because uh most mechanics do get some amount of training from our side under they also get some amount of training in 31:32 31 minutes, 32 seconds terms of their capability building information on new kinds of uh machines and businesses. uh that they should be 31:39 31 minutes, 39 seconds handling new kinds of uh pollution norms and the kind of oils which are required in the in the latest machines and all of 31:47 31 minutes, 47 seconds that also require investments which is which which gets funded from our AP members which I spoke to you about now 31:55 31 minutes, 55 seconds second question non-lubricant we are very excited about our autoare range of products and last year I can tell you 32:02 32 minutes, 2 seconds 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 32:11 32 minutes, 11 seconds should tell you the excitement that we have had in the month of June only on e-commerce. We sold about 27,000 pieces 32:19 32 minutes, 19 seconds of autoare products. Uh which means that the cash flow is lot more visible. Uh have opportunity to interact with 32:27 32 minutes, 27 seconds customers beyond Louis Vision and will also drive brand equity in the time to come. 32:38 32 minutes, 38 seconds Sana, does that answer your question? 32:41 32 minutes, 41 seconds Yes. Thank you so much sir and congratulations once again. Thanks a lot. Thank you. 32:47 32 minutes, 47 seconds Thank you. We'll take our next question from the line of Nitan Tari from Philip Capital, India. Please go ahead. 32:55 32 minutes, 55 seconds Um thanks for the opportunity again sir. 32:57 32 minutes, 57 seconds Um my question is actually related to the ethanol impact on uh on automotive Indians. So there's a debate going on 33:04 33 minutes, 4 seconds around how like you know the mixing of ethanol or impat could be impacting automotive engines. So just wanted to understand um are our products also 33:14 33 minutes, 14 seconds evolving to address those issues and have you like introduce any product lines or have you made any changes in the product uh as such I mean to address 33:22 33 minutes, 22 seconds that concern that um like you know consumers might have. So that's that's one. Secondly, uh if you can also again 33:30 33 minutes, 30 seconds you know help us understand your uh sales mix right now in terms of if you can break it down for 33:39 33 minutes, 39 seconds CV and industry as of this quarter. 33:44 33 minutes, 44 seconds Sorry you will think sales mixed into um automotive uh um between personability and CV and then what 33:53 33 minutes, 53 seconds portion is industrial in overall right now? 33:57 33 minutes, 57 seconds Yes. Yes. Okay, understood. Yeah, we have spoken about in the past and I I'll do that to you again. Yeah. 34:06 34 minutes, 6 seconds Okay. Uh so first is is does ethanol impact Indian performance? See all of us 34:15 34 minutes, 15 seconds as consumers as conscious consumers must realize that ethanol mixing uh is a requirement that government of India has 34:24 34 minutes, 24 seconds put forth. And if you look at some of the other countries in the world including Brazil, ethanol goes up to 40 50% of the fuel. It does have an impact 34:33 34 minutes, 33 seconds on engine performance. Uh but that's what OEMs uh work with. So most of our automotive brands in India are providing 34:41 34 minutes, 41 seconds engines which can handle flex and with that the requirement for engine oil also changes. So we have been 34:48 34 minutes, 48 seconds working with OEMs. Our products are are capable of handling E20, E30 and that 34:56 34 minutes, 56 seconds 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 35:04 35 minutes, 4 seconds ethanol linked fuel will be taken care of as long as they're putting cashrol in their machines. So put and don't worry 35:12 35 minutes, 12 seconds about the performance and all. Second is the sales mix uh for the latest quarter which is Q2 uh or you know you can also 35:20 35 minutes, 20 seconds take the overall level our personal mobility has contributed to 43% serial is about 42 44% and industrial has been 35:30 35 minutes, 30 seconds about 12%. That's our contribution for the for this year. 35:37 35 minutes, 37 seconds Nathan, does that answer your question? Yes. Yes. 35:49 35 minutes, 49 seconds Nathan, we unable to hear you. Nathan, I think you're on mute. 36:00 36 minutes Since there is no response, we'll move on to the next question from the line of Nakul Dave from ND Investments. Please go ahead. 36:07 36 minutes, 7 seconds Yeah, thank you for the opportunity. Uh, congratulations on a good set of numbers. Just had one of the questions. 36:14 36 minutes, 14 seconds Yeah, I just wanted to understand what your advertise advertising expenses for this quarter also. Have you taken any 36:22 36 minutes, 22 seconds price hikes and have you added any new OEMs? That's all I want to understand. Okay. 36:36 36 minutes, 36 seconds Okay, our advertising expense for the quarter is in uh the same range bound and the exact amount is uh is 46 crores. 36:48 36 minutes, 48 seconds Uh which is actually a bit lesser than what we did in the base but for the first half of the year our advertising 36:54 36 minutes, 54 seconds expense is higher by 20%. Uh so if you're watching our videos, you would have heard me say that we are going to be bumping up our advertising and sales 37:03 37 minutes, 3 seconds promotion expenses the beginning of the year in order to support the the growth momentum and we have been able to do 37:10 37 minutes, 10 seconds that. In the base we did have SRK's campaign for edge and hence we spend a little more in last year but this year 37:18 37 minutes, 18 seconds in Q2 we have been able to restrict it to about 46 cr. Uh so that's exactly the rising expense that you asked for. Uh second, have we taken a price height? 37:28 37 minutes, 28 seconds Yes, we have. Uh selective price hikes have been taken across the portfolio. 37:34 37 minutes, 34 seconds There have also been a few cases of price drops in our drive lines and specialities and coolants. Uh but the 37:42 37 minutes, 42 seconds selective price h that we've taken has given us about uh one and a half% uh kind of delta only coming from uh price 37:51 37 minutes, 51 seconds in this quarter. Uh having said that uh a new OEM uh there is no new brand of 37:58 37 minutes, 58 seconds OEM but we have started working uh for a range of vehicles with dro motors uh and with data as you know we've been working 38:07 38 minutes, 7 seconds in between uh in in uh that's correct uh so we've been working with tatas in the 38:15 38 minutes, 15 seconds past and uh with them the partnership is deeper but there's no new there are not many left you those work with Koreans at 38:24 38 minutes, 24 seconds the moment uh which I hope we will be able to uh make an entry into in the time to come. 38:31 38 minutes, 31 seconds Okay. Okay. That answers all my questions. Thank you once again. Thank you. 38:38 38 minutes, 38 seconds We'll take our next question from the line of Gain from IC Predential Mutual Fund. Please go ahead. 38:47 38 minutes, 47 seconds Uh hi sir. Thank you for giving me the opportunity. I have a question on other income s from a run rate perspective 38:56 38 minutes, 56 seconds what we have delivered in this quarter is on the lower side if you can help us understand and similarly the working capital was also a little higher so is 39:05 39 minutes, 5 seconds both linked or how should we be looking at both these things uh thanks for the results 39:13 39 minutes, 13 seconds and and that's a sharp I must say congratulate you for that observation uh indeed our income has gone down in 39:22 39 minutes, 22 seconds quarter by about 11 cr but you remember that when I announced the last quarter reserve there was a special dividend 39:28 39 minutes, 28 seconds announced by us and that took a large part of our cash reserves being distributed to shareholders so with that 39:36 39 minutes, 36 seconds our interest income came down by about 8 crores so that is a is a big uh impact on our income uh we also had a sale of 39:44 39 minutes, 44 seconds property in the past quarter which is not there anymore and hence what you're seeing is like for exist lower and 39:51 39 minutes, 51 seconds higher in cr on the other income. So that's your first question. Uh what is the second question you asked? Uh it did 39:58 39 minutes, 58 seconds not make s on working capital if you working capital working capital. See uh 40:08 40 minutes, 8 seconds two things are happening. The volume growth is upon us and when the volume grows uh you do increase the inventory 40:17 40 minutes, 17 seconds and there have been there have been also a uh an abnormal uh supply situation in Southeast Asia. Exon is that they have 40:27 40 minutes, 27 seconds taken down their refinery for maintenance which meant that we had to uh look at other other sources as well 40:35 40 minutes, 35 seconds as stock a little more of base oil to be able to uh you know to be able to meet the market demand and hence our uh stock 40:44 40 minutes, 44 seconds went up a bit. uh we've also compensated a fair amount of our uh uh trade payables where our trade renewables have 40:52 40 minutes, 52 seconds also gone up a bit uh because of uh expansion into B2B expansion into industrial and some amount of disruption 41:01 41 minutes, 1 second that we saw in J&K but these are momentarily uh you know these are temporary changes and we'll come back to our most efficient working capital that 41:09 41 minutes, 9 seconds you are used to seeing in a while that was very helpful and explain it sir. Just one followup on other income. 41:20 41 minutes, 20 seconds So should we be expecting this to be the new run rate is one question and second if we look at the cash position that we 41:28 41 minutes, 28 seconds have it is upwards of uh 860 odd cr. 41:33 41 minutes, 33 seconds So uh 860 cr should lead to higher than 10 cr per quarters or other income if we would have invested in any fixed deposit 41:41 41 minutes, 41 seconds type of instrument also. if you can elaborate on this please. 41:47 41 minutes, 47 seconds So you should expect this to be a run rate in the future. Uh and uh your shar would have also picked up that uh 41:55 41 minutes, 55 seconds earlier our cash position was higher by about 550 crores. Uh which is the dividend special dividend that we paid 42:02 42 minutes, 2 seconds out. So on an average a large cashing company uh with the FD rates where they are and this morning's monetary policy 42:11 42 minutes, 11 seconds uh and the three uh rate cuts that you have seen in this year would also bring down the FDS to the to a lower level 42:19 42 minutes, 19 seconds than what we are all used to but going forward what you're seeing in other income should be the should be the expected run rate in the future. 42:30 42 minutes, 30 seconds That was very helpful sir. 42:31 42 minutes, 31 seconds Congratulations and all the best. Thank you. Thank you. Thank you. 42:37 42 minutes, 37 seconds Thank you. Ladies and gentlemen, to ask a question, please press RN1 on your phone. We'll take our next question from 42:44 42 minutes, 44 seconds the line of Kumar Anupchan Sha from Sumangal Investments. Please go ahead. Hi sir, thanks for the opportunity. 42:52 42 minutes, 52 seconds Would you repeat the volume figures for this quarter and what were the same for for uh corresponding uh quarter of last year and last quarter also? Thank you. 43:04 43 minutes, 4 seconds So this quarter our overall volumes are 66 million. They are up by 5 million. So last year same time was 61 million and 43:14 43 minutes, 14 seconds uh Q1 the last quarter uh was I think 62 million. Correct. Yeah. 43:23 43 minutes, 23 seconds Okay sir, thank you very much. Thank you. Thank you. 43:30 43 minutes, 30 seconds 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 43:38 43 minutes, 38 seconds disconnect your lines. Wish you a good day ahead. Thank you.