Castrol India Limited — Q2 FY26

Castrol India Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Z1jCtgudgnU Published: 6 months ago

0:01 1 second Ladies and gentlemen, welcome to our 3Q 2025 earnings conference call for Castrol India Limited. Please note that all participant lines will be in the 0:10 10 seconds 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 10 then 0 on your touchstone phone to reach the operator. 0:21 21 seconds Please note that this conference call may contain certain forward-looking statements which are based on the belief, opinions and expectations of the company as on date of this call. These 0:30 30 seconds statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. 0:37 37 seconds We have with us Mr. Kedar Lelay, managing director Castrol India Limited and Miss Birini Shiniasan, CFO Castrol 0:45 45 seconds India Limited. I now hand the conference over to Mr. Lelay. Thank you and over to you sir. 0:53 53 seconds Good afternoon and namaskar everyone. 0:55 55 seconds Thank you for joining us to discuss Castrol India's performance for the third quarter and 9 months ended 30th September 2025. 1:05 1 minute, 5 seconds As you are aware, we are our reporting follows the Jan December calendar year and hence this is the third quarter for us and I'm pleased to announce that we 1:13 1 minute, 13 seconds delivered another quarter of steady consistent growth backed by a strong focus on profitability and a portfolio 1:21 1 minute, 21 seconds that continues to work hard for us to serve our customers across spaces. 1:26 1 minute, 26 seconds As we look ahead, our priority remains the same. To accelerate volume growth, deliver market share gains, maintain the 1:34 1 minute, 34 seconds profitability, and stay ahead by building solutions that serve the evolving needs of our customers. With 1:41 1 minute, 41 seconds that, I'll hand over to Mani to take you through our financial performance this quarter and the 9-month period. 1:49 1 minute, 49 seconds Thank you, Kad. And good afternoon to all of you. Uh let me first talk about the external environment. The market 1:57 1 minute, 57 seconds conditions this quarter remained volatile with base oil fluctuations and out of range forex movements adding pressure. 2:07 2 minutes, 7 seconds Despite this, we've remained nimble, adapting quickly to the changing market dynamics through innovation, operational 2:14 2 minutes, 14 seconds excellence, and deeper customer connections. We are managing it with discipline, staying focused on cost, driving operational efficiencies and 2:23 2 minutes, 23 seconds making thor decisions to protect our value. 2:26 2 minutes, 26 seconds Let me talk about our revenue from operations. It came in at 1363 crores which represents a 6% yearon-year 2:35 2 minutes, 35 seconds growth and it's primarily driven by higher volumes that grew 7% during this quarter. 2:43 2 minutes, 43 seconds EITA for the quarter was 323 crores which is up by 37 crores while profit 2:50 2 minutes, 50 seconds after tax was 228 crores which is 10% higher than same quarter last year. 2:58 2 minutes, 58 seconds In the 9 months to September 25, revenue reached 4,282 crores, which is up 7% year-on-year 3:06 3 minutes, 6 seconds basis with EIA at 98280 crores, up 9% versus the same period. Profit after tax 3:14 3 minutes, 14 seconds is at 705 crores, which is up 8% versus comparable period. 3:20 3 minutes, 20 seconds Year-to- date volume growth stands at 8% underscoring that our growth is sustainably driven by a combination of volume, price, and portfolio. 3:32 3 minutes, 32 seconds We continue to invest with intent in our brands, in digital capabilities, and in innovation to stay competitive and 3:40 3 minutes, 40 seconds future ready. Our balance sheet remains robust giving us the flexibility to navigate near-term volatility while 3:49 3 minutes, 49 seconds preparing us for emerging opportunities in evolving mobility landscape. 3:55 3 minutes, 55 seconds I hand it back to you KDA to walk us through the details of our performance and share some significant business developments. Over to you. 4:02 4 minutes, 2 seconds Thank you Munali. Uh these results reflect our continued performance momentum. Our strategic focus on volume 4:10 4 minutes, 10 seconds leg growth is beginning to yield sustainable results. We have expanded our reach in rural markets and bolstered 4:17 4 minutes, 17 seconds our industrial segment presence which are the two key speedboards driving our growth. This strong growth momentum from 4:25 4 minutes, 25 seconds rural and industrial areas validates our emphasis on penetrating bhat markets and leveraging infrastructure and 4:32 4 minutes, 32 seconds manufacturing uptakes in line with the vixit bharat vision of prime minister of India. We're also maintaining our market 4:40 4 minutes, 40 seconds leadership position holding the number one share across key categories which speaks to the strength of our business 4:47 4 minutes, 47 seconds and the deep trust that customers reborn in Castrol brand. 4:53 4 minutes, 53 seconds On the operational front, we continued to strengthen our core business while expanding our portfolio. A highlight of 5:00 5 minutes the quarter was launch of new products tailored to emerging consumer needs. Let me talk about the Castrol All-in-One 5:09 5 minutes, 9 seconds Helmet Cleaner. An innovative home spray solution addressing helmet hygiene for two-wheeler riders. This product fills a 5:18 5 minutes, 18 seconds real market gap. Most riders had no specialized solution for helmet cleaning and it reinforces Castrol's position as 5:27 5 minutes, 27 seconds a complete auto care brand beyond traditional engine oils. As I shared during the launch, the helmet cleaner is 5:34 5 minutes, 34 seconds a natural extension of our autoare portfolio, solving an everyday need for riders while opening a new repeat use 5:43 5 minutes, 43 seconds category for our business. Early response has been very encouraging and we hope to expand this across the country and channels in the time to 5:51 5 minutes, 51 seconds come. We're looking at transforming Castrol from a lubricant provider to a full service and maintenance company. 5:58 5 minutes, 58 seconds Many of our new endeavors are in line with this vision of being a one-stop shop for services and maintenance 6:05 6 minutes, 5 seconds provider beyond just products. During Q3, we signed a notable MOU with Vinfast 6:12 6 minutes, 12 seconds Auto, the Vietnamese EV manufacturer to support their foray into India's EV market. Under this agreement, Winfast 6:21 6 minutes, 21 seconds will leverage Castrol's workshop network, select Castrol auto service outlets, if you will, to provide after 6:29 6 minutes, 29 seconds sales service for Winfast EV customers nationally. This collaboration not only generates a new revenue stream for our 6:37 6 minutes, 37 seconds workshops, but also aligns with our commitment to support India's transition to sustainable mobility by ensuring EV 6:44 6 minutes, 44 seconds owners have service support across the country. It exemplifies how we can leverage our network and expertise in 6:52 6 minutes, 52 seconds lubricants and when I say lubricants it includes EV fluids of course to play a broader role in the automotive ecosystem 7:01 7 minutes, 1 second with a vast network of 750 plus Castrol auto service centers over 12,000 multibrand workshops that we work with 7:10 7 minutes, 10 seconds and 33,000 independent bike workshops working towards making Castrol a beyond product brand and the MOU with Zenfast 7:20 7 minutes, 20 seconds actually marks a key step in expanding beyond the lubricants into what I call service and maintenance space. We have 7:28 7 minutes, 28 seconds launched EV fluids under the Castrol on range. We spoke about it in the last calls also. Going forward, we shall be 7:35 7 minutes, 35 seconds leveraging our technology center to formulate EV transmission and thermal fluids suited for India's environment. 7:43 7 minutes, 43 seconds This localization of advanced EV fluids is part of our preparation for the future ensuring we are ready to serve 7:50 7 minutes, 50 seconds the growing electric mobility ecosystem as well. In addition, we rolled out upgraded lubricant variants and when I 7:58 7 minutes, 58 seconds say updated, it means castrol magnetic engine oil compliant with the latest specification APIsq. We were the first 8:06 8 minutes, 6 seconds one to do so and other autocare products during the quarter to broaden our offerings. 8:12 8 minutes, 12 seconds You can see that we have been relentlessly expanding our distribution reach and service network to get closer 8:19 8 minutes, 19 seconds to our customers and hence I'm proud to share that Castro India's products are now available through over 150,000 8:27 8 minutes, 27 seconds retail outlets across the country an important milestone in our accessibility drive. This includes a footprint of 8:35 8 minutes, 35 seconds 40,000 plus outlets in rural India. And as we deepen penetration in smaller towns and villages to capture untapped 8:43 8 minutes, 43 seconds demand, about 500 or so rural express, these are Castrol oil change kiosks uh 8:50 8 minutes, 50 seconds and focused mechanic programs are also helping us convert the firsttime users and accelerate repeat buying with 8:59 8 minutes, 59 seconds bikers. This push for rural penetration is reflecting in our performance as volumes continue to grow across sectors. 9:08 9 minutes, 8 seconds Equally significant is the growth of our branded service network. We now have more than 750 Castrol auto service what 9:17 9 minutes, 17 seconds I call cash centers across 300 cities up from about 580 a year ago. around 33,000 9:26 9 minutes, 26 seconds independent bite workshops and about 12,000 multibrand workshops further strengthen our service delivery network. 9:33 9 minutes, 33 seconds These workshops along with our brand distribution base and uh distributor 9:40 9 minutes, 40 seconds base uh at 150,000 plus retail touch points position us to serve our customers whenever they are with the 9:48 9 minutes, 48 seconds right products at the right price. Our expanding expanding network is a testament to making Castrol more 9:56 9 minutes, 56 seconds accessible and affordable across the length and breadth of India. It also strengthens our partnership with mechanics and independent workshops who 10:04 10 minutes, 4 seconds are critical stakeholders in our success. Alongside distribution, we're also executing strong marketing and 10:11 10 minutes, 11 seconds customer engagement initiatives that reinforce our brand leadership and relevance. Let me talk about a few. 10:18 10 minutes, 18 seconds Activation across key markets engaged more than 5 million biking enthusiasts with Castrol Power One, a brand that 10:27 10 minutes, 27 seconds stands for ultimate performance in our portfolio. Additionally, our Super Drive with Castrol Edge, a campaign this 10:35 10 minutes, 35 seconds quarter, offered consumers a unique chance to feature in a drive with a celebrity which created buzz amongst 10:44 10 minutes, 44 seconds edge lovers. The event drove thousands of consumer trials across key cities and the two-heer segment power one sponsored 10:52 10 minutes, 52 seconds events like premium bike races, ridermies and that energized the biking affixados. 11:00 11 minutes We also celebrated the unsung heroes of our industry the mechanics through initiatives such as super mechanic satra a week-long engagement program 11:08 11 minutes, 8 seconds recognizing mechanics across the country where 5,000 plus mechanics participated. 11:14 11 minutes, 14 seconds These programs along with digital outreach and I have always spoken about Castrol fast app with lot of 11:21 11 minutes, 21 seconds appreciation which targets mechanics and Castrol connect platform for consumers which are sending our brand connect and 11:28 11 minutes, 28 seconds loyalty. They ensure that the Castrol remains a trusted top-of-the-line brand for both B2C and B2B consumers. 11:37 11 minutes, 37 seconds Importantly, our journey is powered by our people and our valu-driven culture. 11:42 11 minutes, 42 seconds We have invested in multiple people and cultural programs, cultural programs this year from technical and leadership 11:49 11 minutes, 49 seconds training to diversity and inclusion initiatives aimed at empowering our talent and fostering innovation. 11:56 11 minutes, 56 seconds Consequently, we are proud that Castrol India is regularly recognized with industry accolades reflecting our team's 12:02 12 minutes, 2 seconds excellence. For instance, Castrol India ranked among the top 30 supply chain champion teams in the coveted 2025 12:10 12 minutes, 10 seconds institute of supply chain management rankings. Our RRBO based engine oil for BS4 vehicles co-engineered with Tata 12:19 12 minutes, 19 seconds Motors received Tara Motors sustainably sustainability excellence award in 2025 and we also won several honors at the 12:27 12 minutes, 27 seconds E4M IDMA 2025 for career excellence. 12:32 12 minutes, 32 seconds To summarize, Castrol India continues to fire on all cylinders. We are executing our onward upward forward strategy with 12:40 12 minutes, 40 seconds discipline and passion. Focusing on core automotive growth, pushing into high opportunity industrial and rural markets 12:48 12 minutes, 48 seconds and investing in future ready adjacencies like EV fluid and AutoCAD. 12:53 12 minutes, 53 seconds With our CMS services gaining momentum, we are well positioned to offer a wide gamut of services beyond the traditional 13:00 13 minutes auto applications. We are exploring untapped sectors such as cement, steel, glass, etc. Catering to sectoral demands 13:08 13 minutes, 8 seconds through new product introductions and localization. 13:12 13 minutes, 12 seconds Our volume growth approach supported by continuous product innovation and network expansion is building a solid 13:19 13 minutes, 19 seconds foundation for the future. We believe the Castro brand has never been stronger and our broadening portfolio and 13:26 13 minutes, 26 seconds associations position us well to capture evolving market opportunities. Looking ahead, we remain optimistic yet 13:35 13 minutes, 35 seconds vigilant. We see significant runway for volume growth as India's vehicle park expands and the economy remains on a strong footing. We will continue to 13:44 13 minutes, 44 seconds drive market penetration especially in rural markets and industrial segment bringing new customers into Castrol fold 13:51 13 minutes, 51 seconds and increasing usage of our products and services. At the same time we are m mindful of the external environment 13:59 13 minutes, 59 seconds including the global macroeconomic headwinds and shifts in technology. We are preparing for the future of mobility 14:07 14 minutes, 7 seconds which means ice and electric alike and are confident that our customer centric strategy and agile execution will enable 14:14 14 minutes, 14 seconds us to navigate challenges and capitalize on these opportunities. Castrol India's focus will remain on delivering 14:21 14 minutes, 21 seconds sustainable profitable growth and creating value for all our stakeholders. 14:27 14 minutes, 27 seconds Our aim is clear. Great products backed by great service. Whether that's the mechanic in a rural market, the 14:33 14 minutes, 33 seconds technician at a casbay or our CMS team deployed on a factory shop floor. In closing, Q3 2025 was another quarter of 14:43 14 minutes, 43 seconds steady profitable growth for Castrol India and despite a dynamic environment, we have maintained margin stability and 14:50 14 minutes, 50 seconds delivered growth. A dual achievement that not many can claim easily. This underlines the strength of our business 14:57 14 minutes, 57 seconds model and execution. As we move into the final quarter of 2025, we remain focused on sustaining this performance and we'll 15:05 15 minutes, 5 seconds continue to invest in strategic priorities like industrial segment and rural penetration and exercise cost and cash discipline like we've done so far. 15:14 15 minutes, 14 seconds We are confident that these levers will allow us to navigate any near-term headwinds. With that, I once again thank 15:23 15 minutes, 23 seconds our employees, distributor partners, mechanics and customers for their trust and contribution to our performance. 15:30 15 minutes, 30 seconds Thank you very much and we can now open the floor for any questions. Thank you Mr. Lele. 15:36 15 minutes, 36 seconds We will now begin the question and answer session. If you wish to ask a question, please press star and one on your touchtone telephone. If you wish to 15:45 15 minutes, 45 seconds withdraw yourself from the question queue, you may press star and two. 15:50 15 minutes, 50 seconds Participants are requested to use handsets while asking a question. 15:54 15 minutes, 54 seconds Ladies and gentlemen, let us wait for a moment while the questions come in. 16:05 16 minutes, 5 seconds We'll take our first question from the line of hers and individual investor. Please go ahead. Oh, hello. Am I audible? 16:13 16 minutes, 13 seconds Yes, please go ahead. Yes, sir. 16:16 16 minutes, 16 seconds Yeah. So congratulations to the team for another good quarter. I just uh I was just seeking some clarification uh in 16:24 16 minutes, 24 seconds terms in terms of the direction of the company. So obviously we had a leadership change recently and then we 16:31 16 minutes, 31 seconds expected to have another leadership change right and we saw with the leadership change how we now are trying to tap into new products afterare 16:40 16 minutes, 40 seconds products as well as building up our industrial portfolio so on and so forth. 16:44 16 minutes, 44 seconds Uh so I just wanted to know with the new leadership coming in should the investors expect a change in the direction or will we continue to focus 16:52 16 minutes, 52 seconds on our new products as well as the old segments. 16:59 16 minutes, 59 seconds Thanks H. Uh I should uh first thank you for your kind remark and I must also tell you that uh Mr. Shabato Basu who's 17:08 17 minutes, 8 seconds going to be taking over from me as of 1st of Jan is a quality product of Castrol having spent 26 years in the company and this year uh we did not 17:17 17 minutes, 17 seconds change the direction of the company we simply brought alive what we had been seeing for a while with lot more 17:24 17 minutes, 24 seconds execution focus and Shogato is part of the leadership team which designed uh 17:31 17 minutes, 31 seconds deployed and executed that strategy. So and it's working for us. We've seen now you know six quarters of growing 17:39 17 minutes, 39 seconds momentum and with that uh a good balance between volume growth profitability delivery as well as innovations. So as 17:48 17 minutes, 48 seconds long as uh as far as I see there's no change of strategy uh in the near or midterm uh of course there'll be some 17:56 17 minutes, 56 seconds decisions that will happen basis the strategic review outcome of cash which should uh strengthen our ro our play in 18:06 18 minutes, 6 seconds India and South Asia and I'm more than excited about the about what future holds for Castrol in this geography. 18:16 18 minutes, 16 seconds Fair enough. Thank you for uh the confirmation. My second question was we have uh some 400 500 crores invested in 18:24 18 minutes, 24 seconds key mobility solutions. So could I get just get an update on how that investment is performing and any 18:31 18 minutes, 31 seconds basically quarterly or yearly updates on that? 18:36 18 minutes, 36 seconds Yeah, that's another great great question. Now I think we've it's been over two years since we invested in KMS 18:43 18 minutes, 43 seconds and uh like any prudent organization uh every year twice we look at the value of 18:50 18 minutes, 50 seconds that investment uh and it gets audited by our auditor as well and we are maintaining the value of that investment 18:58 18 minutes, 58 seconds as key mobility goes through its own expansion plan as well as pivots that they are having. Uh as you know Keymobility is one of the largest 19:06 19 minutes, 6 seconds multibrand service network uh opening uh new outlets. They've also gone into a corporate franchisee route and building 19:15 19 minutes, 15 seconds a very sharply differentiated uh ecosystem of digital services which includes digital spare parts catalog 19:22 19 minutes, 22 seconds ordering app as well as integrated workshop management systems. So it is allowing us to learn a lot about what happens in the service environment. It 19:30 19 minutes, 30 seconds is also allowing us to uh make our brand uh and our products available in those 19:37 19 minutes, 37 seconds workshops uh and of course use them as our partners as we start expanding cash 19:44 19 minutes, 44 seconds offerings. Uh so no change from what the blueprint of our investment was and we continue to remain committed uh to key mobility solutions. 19:54 19 minutes, 54 seconds Uh and so what about like the revenues and profits if any from that? 20:03 20 minutes, 3 seconds So uh see it's a it's a private company uh and our investment is predicted as I 20:10 20 minutes, 10 seconds said and uh the revenue that we get is from sale of lubricant into that 20:16 20 minutes, 16 seconds network. We also get a small uh uh commission on sale of spare parts in 20:23 20 minutes, 23 seconds that network uh and so on. So that is a small part of our revenues and we don't identify that in our results as yet but 20:32 20 minutes, 32 seconds it is consistently meeting the expectations that we had set aside for for that business for both revenues as well as learning. 20:41 20 minutes, 41 seconds Okay enough. Thank you. I'll just bring this one. Thanks sir. Thank you. 20:47 20 minutes, 47 seconds We'll take our next question from the line of Dal Pop from Choice International. Please go ahead. 20:55 20 minutes, 55 seconds Yeah, congratulations on a good set of numbers and uh also on the margin expansion. I understand the industrial 21:02 21 minutes, 2 seconds lubricant uh take over the automotive over the next three four years and uh companies uh is already present I 21:09 21 minutes, 9 seconds understand in the premium segment of the industrial uh lubricant section but how would you ensure that the margins do not 21:17 21 minutes, 17 seconds uh uh dilute from here on as far as uh the overall on the back of industrial lubricants component is concerned for uh 21:26 21 minutes, 26 seconds that is uh one question I Okay. You have another one also. 21:36 21 minutes, 36 seconds Yeah. So the second part I wanted to understand is that uh u the key investor question of course uh which of course 21:43 21 minutes, 43 seconds the lubricants faces is the EV penetration and understand that the company already has EV fluids but uh it's just 30 to 40% uh uh lubricants 21:52 21 minutes, 52 seconds that being used as compared to engine oil. So uh what what is the company strategy or I would like to hear your thoughts about the same. 22:03 22 minutes, 3 seconds Okay. Uh thanks Dal. I always remember you come up with great questions. Last quarter you asked about strategic 22:10 22 minutes, 10 seconds pricing. Uh so let me first clarify that industrial is a very large segment when you look at the universe of industrial 22:19 22 minutes, 19 seconds lubricant requirement. Right? But our play is limited into higher end of that uh industrial lubricant. We don't play 22:28 22 minutes, 28 seconds general industrial which is undifferiated uh product which is almost 60 70% of the volume. Now what do we 22:35 22 minutes, 35 seconds play? We play uh high performance lubricants. We play metal working fluids. We play uh rust preventives and 22:42 22 minutes, 42 seconds so on so forth. We also place something that I call as CMS services, chemical management services which in one line is 22:51 22 minutes, 51 seconds uh takes lubricants off the mind of manufacturer, reduces the total cost of ownership, reduces the breakdowns and 22:59 22 minutes, 59 seconds hence efficiency goes up. That's are really the offerings in industrial. We are also expanding into newer sectors 23:06 23 minutes, 6 seconds which are the growth sectors for India which could be steel, cement, glass and so on like I mentioned in my uh prepared 23:13 23 minutes, 13 seconds remarks. Having said that you must know that about 12 to 14% of our volumes come from industrial and they are growing in 23:21 23 minutes, 21 seconds double digits. So over next 10 years, yeah, how much how much faster we grow industrial, I don't see industrial being 23:30 23 minutes, 30 seconds larger than automotive, right? So it's a it's a good emerging part of our business which we want to focus on 23:37 23 minutes, 37 seconds because industrial will remain protected from EV transition and it's a very long-term uh strategic focus of the 23:44 23 minutes, 44 seconds organization to expand. Having said that, you would appreciate Dhindustrial lubricants, how muchever high 23:52 23 minutes, 52 seconds performance they may be, will never make same money or margin as automotive lubricants do, right? Because it's a 23:59 23 minutes, 59 seconds industrial costs and and hence I keep saying that we have to balance how much growth we get from industrial versus the 24:07 24 minutes, 7 seconds profitability growth that we must get from ice engines as well as EV fluids. 24:12 24 minutes, 12 seconds So and and I should give you a a good sense to understand if automotive lubricant gross margin is 100 index then 24:20 24 minutes, 20 seconds a lubricants in industrial will be less than 2530. Yeah, that's that's a good way to understand the profitability 24:29 24 minutes, 29 seconds headwind that you will have from pure industrial guys, right? If you look at some of the global majors in industrial 24:34 24 minutes, 34 seconds lubricant, they make single digit uh uh versus what you are used to seeing with Castrol in the 21 to 24 kind of a range. 24:44 24 minutes, 44 seconds Correct? So we will have to remain cautious, smart and balance the 24:52 24 minutes, 52 seconds requirements of the business while we make this business future fit by investing into industrial as a as a 24:59 24 minutes, 59 seconds pillar of growth. Now your second question is about EV fluids. See I'm also concerned about it because if you if you drive a EV car, there is no 25:08 25 minutes, 8 seconds engine. So you are not going to replace the engine oil like you do once or twice a year. But an EV vehicle also uses 25:16 25 minutes, 16 seconds fluids. For example, there is a transmission fluid. There are uh there are greases that you have to use. An EV 25:23 25 minutes, 23 seconds vehicle tends to be heavier than a normal vehicle, which means that you know the rotating parts require more 25:30 25 minutes, 30 seconds frequent maintenance. And if your battery tends to use a coolant, then we also make that coolant. So, and I'm not 25:38 25 minutes, 38 seconds getting into profitability just now, but if I were to do a broad CLTV analysis, customer lifetime value analysis of 25:47 25 minutes, 47 seconds lubricant in a vehicle for 5 years versus uh transmission fluid as well as coolants in a EV for 5 years, it will be 25:56 25 minutes, 56 seconds a it will be a comparable number. It won't be too way off. So as long as the 26:02 26 minutes, 2 seconds organization is clear and committed to ensuring that our innovation, our range offerings and our products are available 26:10 26 minutes, 10 seconds for this energy transition or EV transition that's taking place. We should keep seeing a business that grows with time. 26:19 26 minutes, 19 seconds I appreciate it. Yeah. Thanks. Thanks a lot for this. Okay. Thanks. 26:25 26 minutes, 25 seconds We'll take our next question from the line of Nitin Tari from Philip Capital, India. Please go ahead. 26:33 26 minutes, 33 seconds Hi, good afternoon. Uh, thanks for the opportunity. Uh, I'm sorry I joined the call a little late and if you already answered this, I really sorry for this. 26:40 26 minutes, 40 seconds But just wanted to understand the volume number in this quarter and if you can also provide some color on that volume in terms of how much of that was 26:48 26 minutes, 48 seconds automotive and how much was industrial and within automotive uh breakup between personal mobility and uh commercial vehicles. So that would be the first one. 27:00 27 minutes Yeah. So, Nathan, uh, thanks. I'm sure you will, you will, uh, look at the recordings later again. But, uh, volume 27:08 27 minutes, 8 seconds growth has always been the focus of Castrol, uh, in in recent years when we 27:15 27 minutes, 15 seconds started playing for sustainable volume growth of the business to get benefit of scale and also to get higher number of 27:23 27 minutes, 23 seconds consumer franchise uh, across our brands. Now this quarter specifically we have delivered 7% volume growth which brings our YTV volume growth to 8%. 27:35 27 minutes, 35 seconds Right? So and if you if you remember the industry numbers it is way ahead of the industry bottom line volume growth. So 27:42 27 minutes, 42 seconds we are growing faster than the industry consistently. That's the first good news. Second is if you were to break it into personal mobility, CVO and and 27:52 27 minutes, 52 seconds industrial which is typically the flavor of growth that you are interested in our personal mobility has grown at over 6% 28:01 28 minutes, 1 second our CVO has grown at about 8% and industrial is in is in good double digits. 28:10 28 minutes, 10 seconds So I'm sorry you're sounding my friend. 28:18 28 minutes, 18 seconds Um yeah, am I audible? Uh yes, please go ahead. 28:23 28 minutes, 23 seconds Yeah, I was saying that if you can provide me a break up of volume and percentage terms and the percentage of the volume in terms of automotive and C etc. 28:32 28 minutes, 32 seconds So I really appreciate you provided the growth number. Um yeah yes you heard the growth number and uh 28:40 28 minutes, 40 seconds see we we have we have we have put these numbers every quarter in our conversations with analysts and uh and 28:47 28 minutes, 47 seconds the numbers don't change uh too much uh so industrial and marine does about uh 13 14 odd percent uh CVO does about uh 28:57 28 minutes, 57 seconds 38 40% and our personal mobilities balance which is uh 4850%. 29:03 29 minutes, 3 seconds uh and depending on the quarter you know many a time you will know that the uh Q3 is a quarter when there is low agree low 29:11 29 minutes, 11 seconds CVO Q2 summertime is the high CVO months and high agree months Q4 will also be high agree months that's why I'm giving 29:18 29 minutes, 18 seconds you a range and percentages and hence these numbers are usually range bound and and stay within that 29:26 29 minutes, 26 seconds really appreciate the color that you provided I mean uh this I mean this is something new that uh I mean at least to me that or the three has been heavy on 29:34 29 minutes, 34 seconds agree and on this good demand. So thanks for thanks. Thanks Nin. Let's go to next. Thank you. 29:43 29 minutes, 43 seconds Ladies and gentlemen to ask a question please press star N1 on your phone. The next question is from the line of Kiran Ma from Boda PNP Pariba Mutual Fund. 29:53 29 minutes, 53 seconds Please go ahead. Thank you sir for this opportunity. 29:57 29 minutes, 57 seconds One question on the strategic review of Castrol. Would you be able to share at what stage of the exercises and when is 30:04 30 minutes, 4 seconds the outcome? not expected and at the India level have we participated any data room exercises or something where 30:11 30 minutes, 11 seconds buyers have started to look at it in bit more granular details. 30:17 30 minutes, 17 seconds Yeah. uh as you would appreciate uh Titan uh you know I'm I'm committed to 30:24 30 minutes, 24 seconds expressing any update that comes to me to the regulator and the market within 24 hours and uh you know exactly what I 30:34 30 minutes, 34 seconds know as of today and I'll repeat uh BP announced the strategic review of our cash business globally around February 30:42 30 minutes, 42 seconds in this year if I remember right and the intention was very simple that they accelerate cashall's next phase of value 30:49 30 minutes, 49 seconds delivery while BP retires some of its debt uh by you know by giving the value of the asset called cashl. Uh we have 30:58 30 minutes, 58 seconds significant growth ambitions across the world. Uh which includes growing our core mobility business, expanding our participation in industrial lubricants, 31:06 31 minutes, 6 seconds enhancing our mobility services as well as diversify into uh data center fluids and uh we believe that this strategic 31:14 31 minutes, 14 seconds review uh outcome uh considers all those options with a focus on true value creation. Uh so it's a good opportunity 31:21 31 minutes, 21 seconds to determine how we can become even more effective and innovative business partner to our customers. And uh we aim 31:28 31 minutes, 28 seconds to ensure that uh any outcome of this review helps us continue to accelerate our growth momentum and ambition uh not 31:37 31 minutes, 37 seconds just for India but beyond. Uh like you said uh all parts of the performance units India or South Asia is one of the 31:46 31 minutes, 46 seconds performance units. uh we have been supplying data into a data room uh for potential investors and that gets run 31:55 31 minutes, 55 seconds from our central team uh bound by the NDA and uh administered by BP's uh 32:04 32 minutes, 4 seconds global M&A team directly uh and I do not participate in any of that transaction. Sure sir. Thank you for this color. 32:13 32 minutes, 13 seconds Couple of more questions on the operations. You shared sort of growth across three different verticals. Would you also be able to share growth in 32:22 32 minutes, 22 seconds terms of the rural how much it contributes at this point of time and what is the growth that we are seeing from our rural penetration. 32:30 32 minutes, 30 seconds And the second question was about the base oil. In the opening remark we referred to the bay oil volatility. 32:36 32 minutes, 36 seconds Last year when we have seen it I think bas oil price sort of had bit of deal linked with the crude oil price. So are 32:43 32 minutes, 43 seconds we now seeing this sort of responding to the crude oil and does it open up opportunity for sort of reducing the cost levels? 32:52 32 minutes, 52 seconds Yeah. So uh I should tell you uh something from the second part of your questions first. Right. So if somebody 33:00 33 minutes asks me is is base oil price connected with crude oil? I'll say there is definite causality but correlation is 33:10 33 minutes, 10 seconds low right so if the base if the if the crude goes to 100 would base oil be expensive for sure 100%. When it will 33:19 33 minutes, 19 seconds take some time if crude oil drops to $50 will it become cheaper tomorrow the answer is not tomorrow eventually it will but how much uh the time will tell. 33:30 33 minutes, 30 seconds Now with that this year we have had about uh 3 and a half uh% if if it's a 33:37 33 minutes, 37 seconds range bound but I think it's about 3 and a half% reduction of our uh cost of base oil is what we've seen YG and a similar inflation is what we have seen in forex. 33:49 33 minutes, 49 seconds So net net we have had a small small very small uh reduction of our cogs based on base oil and the forex 33:58 33 minutes, 58 seconds combination right uh so that's the first point I thought I should tell you uh second uh is the question that you've 34:06 34 minutes, 6 seconds asked so I think I've answered yeah uh you can give if there is a color in that yeah uh second question was about how 34:15 34 minutes, 15 seconds much do we get out of uh rural now I can tell you that there are about 40,000 odd outlets in rural uh that we that we 34:24 34 minutes, 24 seconds service directly and uh and uh we also have close to about 500 34:31 34 minutes, 31 seconds uh rural service express that we call as Castrol uh uh right and I spoke about 34:39 34 minutes, 39 seconds that and these two put together give us a sustainable doubledigit growth year on year so and rural volumes if I were to 34:48 34 minutes, 48 seconds just think about what kind of rural volume do we get? It's a sizable uh 25 34:56 34 minutes, 56 seconds uh 30% of our B2C number. Uh I wouldn't of course put an absolute number out there because competitors are always 35:03 35 minutes, 3 seconds watching for my uh recording of analyst calls but uh suffice it to say that close to 25% of our B2C volumes are now 35:12 35 minutes, 12 seconds beginning to come from rural and growing in double digits. Thank you. Thanks for this color. 35:20 35 minutes, 20 seconds Thank you. We'll take our next question from the line of Bipul Sha from Sumangal Investments. Please go ahead. 35:30 35 minutes, 30 seconds Uh thanks for the opportunity. So what percentage of our basil uh requirement 35:36 35 minutes, 36 seconds is uh imported and what percentage is domestic sourced? 35:44 35 minutes, 44 seconds Yeah, maybe let me take that. Uh ripple thank you for the question. Um today almost about 55 50 to 55% slightly more 35:53 35 minutes, 53 seconds than half of our base oil comes uh as an import. The balance is all procured locally. Uh but I uh what what's 36:02 36 minutes, 2 seconds interesting for us as we navigate the supply chain is that actually base oil is a commodity globally traded and hence 36:08 36 minutes, 8 seconds prices are almost uh you know globally landed. What we're able to do when we get it locally is we're able to get it 36:16 36 minutes, 16 seconds at a lower lead time and there's a little bit of logistics cost that we say that we're able to save. Uh and on the 36:23 36 minutes, 23 seconds imports we actually uh we we use we buy from some of the large players in the market and we hence are able to negotiate a good rate because our buying 36:31 36 minutes, 31 seconds scale goes up as well. So while there's a split of domestic and uh uh import I think on a cost basis we have found the right advantage of sourcing. 36:41 36 minutes, 41 seconds And ma'am my second question is can you give the volume in million liters for this quarter and uh same quarter last year and last quarter also. 36:54 36 minutes, 54 seconds Uh are you looking for overall topline volume or baseline volume? No volume in liters. Sure. 37:04 37 minutes, 4 seconds Yeah. So overall lubricant volume liters. In fact uh I'm uh very delighted you ask this question every time. Last 37:12 37 minutes, 12 seconds time also we were telling you we did 62 66 and 61 million. And uh again I should tell you if you are to look at this 37:19 37 minutes, 19 seconds year's three quarters uh 63 million liters in Q1, 66 in Q2 and 60 million 37:27 37 minutes, 27 seconds liters in this quarter. pick zero in this. Hello. Yeah, Har. 37:35 37 minutes, 35 seconds Yes, that's fine. Okay. Thank you, sir. Thank you. 37:41 37 minutes, 41 seconds And I I I hope you understood what Manali was trying to explain. 37:46 37 minutes, 46 seconds In base oil, there is no advantage of buying locally. That's the point that she wanted to make so that all of you appreciate it because base oil whether 37:55 37 minutes, 55 seconds you buy from imported source or local pricing is the same. What could benefit is just in time supply. So we don't need 38:04 38 minutes, 4 seconds to hold on to that in our working capital or in our storage. So base oil in India is short supply and hence we 38:12 38 minutes, 12 seconds have to rely on international providers of base oil and that will continue. So like Rali said a great strategy is to 38:19 38 minutes, 19 seconds get a right combination 56 44 58 42 depending on the quarter and availability to suit the requirements for the business. Thank you. Let's go. 38:31 38 minutes, 31 seconds Thank you. We'll take our next question from the line of Mandar Pawar from Kotak Mahindra Asset Management Company. Please go ahead. 38:40 38 minutes, 40 seconds Uh hi uh good afternoon uh and congratulations to the team for excellent numbers uh and uh wishing you all the best for your next and also to 38:48 38 minutes, 48 seconds solve the whole take. Uh I have two questions. Yeah. Uh so first is uh on on the the previous question where you talked about the cross matching 38:56 38 minutes, 56 seconds expansion uh you talked about the benefit of the uh some bit of net benefit on uh uh the cogs. uh at the 39:03 39 minutes, 3 seconds same time there is also uh you we have seen the realizations have improved um on a sequential basis. So can you confirm if there have been any pricing 39:12 39 minutes, 12 seconds actions which have been taken in the market because this is expand um and you know the CO benefit also whether that is 39:20 39 minutes, 20 seconds sustainable uh going forward because we have comparing the peer reported and their such 39:27 39 minutes, 27 seconds benefit is not visible. Uh I understand there is a mix change but if there is anything uh different uh other than the 39:35 39 minutes, 35 seconds mix change but uh if you can confirm that uh second question is on the um you know we have previously the call also 39:43 39 minutes, 43 seconds been talking about the data center opportunities uh and you know even in recent months we have seen more 39:51 39 minutes, 51 seconds announcement coming on that brand uh and within that u uh you know the adoption of liquid cooling as compared to cooling 39:59 39 minutes, 59 seconds U can we uh are we in a position to you know as to analyze as to what could be that opportunity be in terms of uh you 40:08 40 minutes, 8 seconds know the units of liter opportunities etc or realization how different it can be as compared to the current average 40:15 40 minutes, 15 seconds realization of the um manda let me take your first question and then maybe for the second question 40:23 40 minutes, 23 seconds I'll ask ka to also sim of course so so you very rightly spotted in the results 40:29 40 minutes, 29 seconds um that indeed we have uh improved our overall gross margin, our cost of goods sold has gone down. So while our volume 40:37 40 minutes, 37 seconds grew 7 8% in the quarter, our cost of goods has only grown 2 to 3%. So that's that's the uh benefit that you are 40:44 40 minutes, 44 seconds talking about. I thought it's good to clarify for the rest of the listeners also. Now uh you asked if this is 40:52 40 minutes, 52 seconds sustainable. I think this is one of the very important uh you know focus items for us in the company. We want to make sure that we are able to improve our 41:01 41 minutes, 1 second overall product cost ongoing structurally. Uh part of it will come through best uh rate negotiation. We just spoke about it in the previous 41:08 41 minutes, 8 seconds question. Part of it really comes by optimizing our drawback material sourcing, optimizing our formulation, optimizing the u costs that we incur in 41:18 41 minutes, 18 seconds our manufacturing locations. And as a result of all of this in this quarter my cost per liter of lubricant has gone 41:24 41 minutes, 24 seconds down by about 5%. And if I look at it on a 9-month basis, it's actually gone down uh I think 2 to 3%. So this is 41:33 41 minutes, 33 seconds intentional. This is what we use as a muscle to improve our overall profitability and this effort should continue even in the future. Now part of 41:40 41 minutes, 40 seconds it is really company's effort but this part of the PNN is also exposed to the macro envir uh environment and that's 41:47 41 minutes, 47 seconds that's also important to be aware of. We spoke about bay oil which is a commodity and hence it's uh part of my cogs is 41:54 41 minutes, 54 seconds defined by that market. We buy in dollars. The the price is maintained in dollars and hence we are exposed to the 42:02 42 minutes, 2 seconds uh the US dollar rupee uh exchange fluctuations also. So while we put an effort on making sure the cost goes down, we are exposed to this macro 42:11 42 minutes, 11 seconds environment and we try to find the balance always. You also asked a question on realization. Um you know net 42:19 42 minutes, 19 seconds realization for us it is evolving. It will it will evolve also. uh primization I think is a strategy we definitely want 42:26 42 minutes, 26 seconds to do that in each of the space that we operate in but also we are very aware that we have expanded our portfolio and 42:33 42 minutes, 33 seconds entered into the essential segment cas essentials and uh you might be familiar if you're familiar with our portfolio we have that in many spaces for our bikes 42:42 42 minutes, 42 seconds for our CV part of the portfolio as well that comes at a lower realization versus an versus a comparable product so we are 42:50 42 minutes, 50 seconds actually ready for a realization drop a mixed drop in a way and uh we do we do 42:57 42 minutes, 57 seconds uh you know fund part of it with the savings formulation optimization so that at a gross margin level each of these products give us a good realization. You 43:06 43 minutes, 6 seconds also asked a question on pricing. Um I think pricing for us is a is a strategic lever. We definitely every every year 43:14 43 minutes, 14 seconds every once in a year we sit down and we look at those pockets where there is an opportunity and we we think we can offer the consumer a better value and price 43:23 43 minutes, 23 seconds for it and on the contrary we also look if there is an opportunity and we need to consider pricing down and we need to pass on either via promotion or 43:30 43 minutes, 30 seconds strategic price down. So it's a strategic discussion we don't do that on a knee-jer basis or on a shock basis but yes we do consider that ongoing. 43:40 43 minutes, 40 seconds Yeah. 43:42 43 minutes, 42 seconds Yes. So to be uh to talk about data center opportunity uh mand this is a this is my favorite part 43:51 43 minutes, 51 seconds of the answer because uh there are no numbers to talk about only principles and concept. Uh data center opportunity 43:58 43 minutes, 58 seconds is real. It's a it's a global opportunity which runs into millions of liters of coolant. uh whether we do a 44:08 44 minutes, 8 seconds liquid uh cooling directly to chip or liquid cooling through containers where the uh processors and CPUs are dipped 44:16 44 minutes, 16 seconds into the into the uh coolant. Now I have been waiting uh for my first announcement to be made in India uh 44:25 44 minutes, 25 seconds because these testing go on for a very long time. So we work with hyperscalers as well as data center operators and 44:32 44 minutes, 32 seconds they are running very long tests uh not just with the coolant but also with the 44:39 44 minutes, 39 seconds technology to prove uh the heat management promise that the coolant does over ambient management which happens 44:47 44 minutes, 47 seconds through air conditioners. Now these tests would last 9 months to a year and uh we have a sizable amount of uh liquid 44:57 44 minutes, 57 seconds coolant now available in India which we are ready to supply and you'll be the first one because we'll not leave a 45:04 45 minutes, 4 seconds chance to make a media blitz once we win our first customer on the coolant business because we believe it it makes 45:11 45 minutes, 11 seconds our entry into data centers and the future of uh digital technology uh makes 45:18 45 minutes, 18 seconds our products and services relevant to a totally new sector and I had said last time that uh in cooling space the 45:27 45 minutes, 27 seconds accepted margin in western world is about a dollar per liter uh so if we are able to get some of this business coming 45:35 45 minutes, 35 seconds in it'll add good amount of delta to the business which will not replace anything else that's happening in automotive or 45:44 45 minutes, 44 seconds industrial uh or uh automotive for autoare sectors that we are currently focusing on. So watch this space is what 45:52 45 minutes, 52 seconds I will say. I'm waiting like you are for our first set of customers to finish the trials and order the liquid. 46:03 46 minutes, 3 seconds Thanks. Let's go to Thank you very much. 46:05 46 minutes, 5 seconds Thank you. Before we take the next question would like to remind participants to ask a question please press star and run on your phone. 46:14 46 minutes, 14 seconds Next question is from the line of Nitan Tari from Philip Capital India. Please go ahead. 46:20 46 minutes, 20 seconds Hi Kar. Thanks for the opportunity again. Actually my two questions are also related to uh one your raw material cost another data center opportunity. So 46:28 46 minutes, 28 seconds on the ramat cost did we factor in any discounts or rebates from the suppliers? 46:33 46 minutes, 33 seconds U I suppose we typically do that in the poor quarter. Is there any reason your voice is sounding muffled? Can you use your handset mode please? 46:41 46 minutes, 41 seconds Is this better? Huh? Uh, little better. 46:44 46 minutes, 44 seconds Yeah, go slow. Uh, speak slowly because the voice is muffled. It's difficult. Just speak slowly as in pace slowly. 47:01 47 minutes, 1 second Uh, no. You're sounding muffled again. Oh, no. We can't hear you at all now. 47:14 47 minutes, 14 seconds Uh till then should we take the next question sir because we unable to hear. Yes yes yes yes please. 47:21 47 minutes, 21 seconds Thank you. We'll take the next question from the line of Kiritan Ma from Boda PNB Para. Please go ahead. 47:28 47 minutes, 28 seconds Thanks for the opportunity again sir. We spoke about sort of transitioning from loop provider to full service and 47:35 47 minutes, 35 seconds maintenance providers. So adding beyond just products. So over next five years time how do we want the mix to evolve? 47:44 47 minutes, 44 seconds What could be the probable mix that we are looking at? 47:49 47 minutes, 49 seconds Yeah, Tan, good question. But this is too early for us to start giving a guidance on mix. uh because if you 47:57 47 minutes, 57 seconds remember uh we used to have just about 300 400 ces now that number has moved to 48:03 48 minutes, 3 seconds 750 and our recent uh tie-up uh with Vinfas has taught us that we can make 48:11 48 minutes, 11 seconds this network available as a source of reliable and accessible after sales support for even customers and and 48:18 48 minutes, 18 seconds smaller manufacturers and OEMs. So we are looking at uh the network effect coming into play in the future and it 48:26 48 minutes, 26 seconds will take a a lot of efforts and lot of uh uh I should say resources from our side whether it is in people technology 48:36 48 minutes, 36 seconds uh network guidance uh services spare parts lubricants and all of that put together will make the service and 48:44 48 minutes, 44 seconds maintenance offerings complete. uh and you will see this organization transform over next 3 to 5 years and every quarter 48:53 48 minutes, 53 seconds you will start seeing some small numbers coming in and over a period of time add to a sizable number and uh just for for 49:01 49 minutes, 1 second sake of uh comparison I could offer uh these are not numbers but an inspiration inspirational case I was in the US with 49:09 49 minutes, 9 seconds the leadership team and I saw how valu uh quick lube change uh network of 2,000 49:17 49 minutes, 17 seconds outlets across US uh is a very large business that Valvolin did not sell uh along with its lubricant brand uh when 49:26 49 minutes, 26 seconds they did the transaction. So uh and we believe that something uh a cast network which offers a reliable 49:35 49 minutes, 35 seconds service uh could become a uh strategically very important uh lever of our uh future growth. But no numbers as yet for me to share. 49:46 49 minutes, 46 seconds Sure. And is this ambition primarily at the India entity level or does the global Castrol also have the similar ambitions? 49:58 49 minutes, 58 seconds uh I think what's relevant for uh CL listed perspective is the ambition India 50:05 50 minutes, 5 seconds uh which is uh being tested out uh should see light of the day and get scaled up uh and it'll have to be 50:12 50 minutes, 12 seconds supported globally with both ways of working technology and processes uh but that's not relevant for CIL uh investors or for this uh conversation. 50:25 50 minutes, 25 seconds Sure. Thank you. 50:27 50 minutes, 27 seconds Thank you. We'll take our next question from the line of Pimal Matani, an individual investor. Please go ahead. Uh can you hear me? 50:37 50 minutes, 37 seconds Yes. Yes. 50:40 50 minutes, 40 seconds Thank you for the opportunity sir. Sir, this is regarding your data coding um business. I would like to know sir how competitively are you going to be priced 50:48 50 minutes, 48 seconds in terms of you know your competitors in the similar space and who have their products out and how do you see it? U 50:57 50 minutes, 57 seconds what's the difference between uh the Castrol coolant versus the existing like companies like motiv which have if you can throw light on that will do much better. 51:08 51 minutes, 8 seconds Yes. Uh first is uh as I explained just in the last question to Mandali 51:16 51 minutes, 16 seconds uh that these are very long gestation period sale which happens not because you offer a price but you offer a 51:24 51 minutes, 24 seconds technology a formulation and then the assurance of supply over a period of time. Right? It's not just about a data 51:31 51 minutes, 31 seconds center deciding but also uh the equipment that gets dipped into the liquid or coolant or the processors with 51:40 51 minutes, 40 seconds gets which which get cooled with your uh coolant. So there's lot more that goes behind the scene here in uh formulating 51:48 51 minutes, 48 seconds the product and then delivering it to the promise. So it wouldn't matter whether you know we offer at x value per liter versus somebody else who could be 51:57 51 minutes, 57 seconds offering at y liter per value. What is important is that we get these contracts and we remain with those customers for a 52:05 52 minutes, 5 seconds long time to come and I gave you a benchmark number of of gross margin uh which also is is yet to be realized and 52:12 52 minutes, 12 seconds seen in Indian context but that those were the two answers so that if somebody is modeling to see what it could be you 52:21 52 minutes, 21 seconds have some numbers to work with because those are the numbers that we are also working with for the time to come but that's where this would be time will 52:28 52 minutes, 28 seconds tell uh how sustainable this uh product advantage would be and how we'll continue to work with our customers 52:36 52 minutes, 36 seconds closely to offer value in their in their systems and processes. Okay sir. Thanks. Thank thank you. 52:44 52 minutes, 44 seconds Thank you. 52:45 52 minutes, 45 seconds Thank you. Next question is from the line of Dal Pop from Choice International. Please go ahead. 52:53 52 minutes, 53 seconds Yeah, thank you for the opportunity again. uh uh uh a I want to understand if the company plans to expand into the 53:01 53 minutes, 1 second space of uh diesel exhaust fluid. I understand company is already doing certain number and whether they would be able to uh ramp up from here on. uh we 53:10 53 minutes, 10 seconds uh I understand the company is already hedging about 80% of its forex exposure but if the uh currency depreciates from 53:17 53 minutes, 17 seconds here on uh does the company have a plan further on to protect its margins and uh ultimately see u I understand the aida 53:26 53 minutes, 26 seconds margin guidance of 21 to 24% but but do you does the company see uh it breaking out of this 24% and moving it higher I 53:36 53 minutes, 36 seconds do understand lubricants is a commoditized business but uh for doing it so well. Can it can it break it to the next level of the beta margin? 53:46 53 minutes, 46 seconds Okay, Dal, you are really pushing uh hard on this and and if I said uh death 53:52 53 minutes, 52 seconds is not something that we want to expand only because you expect us to be at the higher end of that margin, that will be 54:00 54 minutes an appropriate answer because deaf is is a commodity and you will not take your 54:07 54 minutes, 7 seconds vehicle to a Castrol store to choose Castrol Deaf if I charge you two rupees liter because I have to deliver in the 54:15 54 minutes, 15 seconds in the guidance. So dev is undifferiated product. We are present there but we wouldn't want to expand it aggressively. 54:22 54 minutes, 22 seconds That's the answer for dev uh forex exposure. I'll ask uh to let you have the answer but you know realize the you 54:31 54 minutes, 31 seconds know the fact of our life is that RBI is sitting on a very large cash or forex 54:38 54 minutes, 38 seconds reserve over 650 billion if I'm not mistaken and RBI will do enough to keep it within a permissible limit and if it 54:47 54 minutes, 47 seconds keeps it within the permissible limit I think we should be good with our assumptions for 2026. Uh but I'll let 54:54 54 minutes, 54 seconds Mali give you specific answers and if I were you, I would be really really happy with Castrol as long as Castrol delivers 55:03 55 minutes, 3 seconds the AITA in 2123, not even 24 and consistently delivers the volume growth of 78% and the sales growth of 67%. 55:12 55 minutes, 12 seconds Which means you're seeing a EPS growth of 6 to 7%. on a very very solid base instead of then asking saying can you do 55:20 55 minutes, 20 seconds more because in the comparable universe of a listed company you can see where their beta margins are as a matter of fact we are almost at a at a level where 55:29 55 minutes, 29 seconds no lubricant company has been able to operate for such a long time. Uh so going back to Nurani on forex 55:36 55 minutes, 36 seconds um so Daval uh good question on the forex uh when it comes to forex what is volatility I think of it in two parts 55:43 55 minutes, 43 seconds what we as Castrol do is we ensure that the volatility doesn't give us any shocks in the P&L uh which is why while 55:51 55 minutes, 51 seconds in the July August September quarter the rate went from I think 86 and it even touched 90 at a point in time our P&L 55:59 55 minutes, 59 seconds was protected because we had hedged for the quarter and we didn't see any shocks and we didn't have to respond with any shocks. So we definitely focus on 56:07 56 minutes, 7 seconds ensuring that the volatility volatility doesn't impact us but on a longerterm period will I uh increase my hedge cover 56:17 56 minutes, 17 seconds to a longer period um uh I don't know we keep looking at these e efficiency models we look at what all forestes to 56:24 56 minutes, 24 seconds cover how much period to cover and I think if at any point in time it comes with it it shows us that that level of discipline will help us additionally we 56:32 56 minutes, 32 seconds may but as of now the focus is to ensure short-term shocks are avoided by our hedging strategy and on the long term we 56:39 56 minutes, 39 seconds plan for it because it becomes a structural cost for me to incur. 56:46 56 minutes, 46 seconds Yeah, thanks thanks a lot the effects in uh yeah really happy to see that may not expand in death. Yeah, good to hear that. Uh thank you. Thank you for this. 56:56 56 minutes, 56 seconds Thank you. We'll take a next question from the line of Hersh an individual investor. Please go ahead. 57:04 57 minutes, 4 seconds Uh so thank you for taking another question. Uh so if I'm not wrong, we we have some seasonality in our profits due 57:11 57 minutes, 11 seconds to uh the bonus or the incentive that we get right once a year. So uh from our parent essentially. So I wanted to know 57:19 57 minutes, 19 seconds uh if slash when uh cashrol is sold uh will that jeopardize our incentive? So 57:26 57 minutes, 26 seconds essentially does the incentive come from cashrol or does it come from BP directly? 57:34 57 minutes, 34 seconds Uh hush thanks for the question and uh and I I must say it's good to uh you know interact with you when you have gone through the results in detail and 57:42 57 minutes, 42 seconds you have spotted this correctly. You're right um uh on our employee costs because of certain uh you know base uh 57:49 57 minutes, 49 seconds effects which happened in the same quarter comparable quarter last year it appears that the employee cost has gone down. Now while uh while I think uh Kdar 57:58 57 minutes, 58 seconds said I think this the result of the strategic review will be announced when it does and all the changes that if any have to happen will be announced there. 58:05 58 minutes, 5 seconds I think what is very clear is we in Castl India want to invest in the organization especially as we prepare to 58:13 58 minutes, 13 seconds deliver the onward upward and forward strategy. So um we we invest in two forms. one we invest in making sure that there are people staffed to do the job 58:21 58 minutes, 21 seconds and the people who are staffed already are motivated and retained for the longer term. Uh an average tenure in Castrol is 10 plus years which means 58:29 58 minutes, 29 seconds that we have really uh you know invested in our employee cost. So there are no really uh knee-jerk shock reactions or 58:36 58 minutes, 36 seconds uh expected on how we manage our uh employee cost base but you're right in spotting that there was some base impact. 58:46 58 minutes, 46 seconds Uh no. So uh I'm talking about I think there is there was some discount or something like that that we receive that 58:53 58 minutes, 53 seconds we receive once uh one quarter every year. 58:57 58 minutes, 57 seconds I I'll answer that. I think he was he was meaning to tell you that. So no uh BP globally does not make any base oil 59:06 59 minutes, 6 seconds and Castrol is the one across the world for our 2.2 2.3 billion lers of uh sale. 59:12 59 minutes, 12 seconds We do buy base oils from multiple suppliers. Uh and these global deals are with Castrol and we get benefited 59:20 59 minutes, 20 seconds because we also consume a a hell of a lot of that material and we get appropriately discount coming into our 59:28 59 minutes, 28 seconds numbers because of what we buy uh as part of global cash fl. So no none of these discounts that we see in the Q4 will get affected by any strategic 59:37 59 minutes, 37 seconds savings. You can be uh you can be rest assured. Understood. Thank you. 59:45 59 minutes, 45 seconds Thank you. Okay. Thank you very much. 59:48 59 minutes, 48 seconds Ladies and gentlemen, we are in time and hence we are closing this call. On behalf of Castrol India Limited, we thank you all for joining this call. You 59:55 59 minutes, 55 seconds may now disconnect your lines. We wish you a good day ahead.