Gulf Oil Lubricants India Ltd — Q3 FY26

Gulf Oil Lubricants India Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=gS71R3h4I-o Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Galo Lubricants India Limited Q3 FI26 earnings conference call hosted 0:10 10 seconds by ICICI Securities Limited. As a reminder, all participant lines will be in the listenonly mode and there will be 0:17 17 seconds an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an 0:25 25 seconds operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now 0:33 33 seconds hand the conference over to Mr. Proel Saint from ICICI Securities Limited. Thank you and over to you sir. 0:41 41 seconds Thank you operator. Uh thank you everyone for making the time to attend this post Q3 uh FI26 result call of Gulf 0:49 49 seconds oil lubricants. We have with us members of the senior management headed by Mr. 0:54 54 seconds Ravi Cha the managing director and CEO and Mr. Manish Angal the whole time director CFO of the company. Uh we will 1:03 1 minute, 3 seconds the format will be as always management will give their opening remarks and outlook on the company and then we will 1:10 1 minute, 10 seconds move into an interactive Q&A round. So without further ado let me hand it over to the management. Over to you sir. 1:17 1 minute, 17 seconds Thank you. Good day good afternoon everybody. Uh thank you for joining us on the Q3 call. Uh I'm very delighted to inform you that this quarter has been an 1:25 1 minute, 25 seconds all-time high in terms of quarterly volumes at 41,500K which is record volume for Gulf Oil. Uh it's been a very strong one for us. 1:36 1 minute, 36 seconds We've also notched up the highest quarterly revenue and ITA which is a good sign in terms of the momentum that we had gathered earlier in the year. uh 1:44 1 minute, 44 seconds we have seen demand and sales really picking up in the second half of the quarter post the prolonged monsoons and festivities. So that was also aided by the GST and other things that happened. 1:55 1 minute, 55 seconds Uh clearly for us uh the 2x market growth rate has been maintained overall where our lubricants volume have grown by 8% in this quarter outperforming the 2:04 2 minutes, 4 seconds industry again by 2x as we have been focusing on that also we've seen this 2x growth has been supported by doubledigit 2:12 2 minutes, 12 seconds growth in many segments this time with the in B2C we have seen the key segments of passenger car motor oil which we've been highlighting is an area of higher 2:20 2 minutes, 20 seconds growth for us we have seen a good double digit mid double digit growth agriculture which has done well early in the year continued to do that and we 2:29 2 minutes, 29 seconds also see prospects of that continuing with hopefully good monsoon and it's also been the B2B segments of industrial infrastructure which have seen 2:37 2 minutes, 37 seconds doubledigit growth so all around uh I think this has been a a quarter where the 41500 happened due to this and uh 2:44 2 minutes, 44 seconds what has also been a very strong performer has been our OEM franchisee workshop which has continued to grow but this quarter again they came in with 2:51 2 minutes, 51 seconds high double digit growth strong momentum from a number of our OEM partnerships and it was a broad-based growth in OEM 2:58 2 minutes, 58 seconds franchisee workshops where I think Gulf oil is clearly the market leader in terms of the tie-ups we have for the franchisee workshops. It's been uh the 3:06 3 minutes, 6 seconds PCMO again registering high double-digit growth and in OEM franchisee also the agri segment where we have partners like Mahindra and Swaraj we had recorded 3:15 3 minutes, 15 seconds double digit increase some of our as you know some of these OEM tie-ups are also doing very well in terms of their own uh 3:21 3 minutes, 21 seconds stature and market share so that obesity rationalization for IC vehicles has improved and this is really providing a 3:30 3 minutes, 30 seconds renewed sense of optimism amongst the consumers also creating additional growth opportunities while EV also growth which is an area of our uh entry 3:38 3 minutes, 38 seconds and growth. Uh we've continued to focus on rural and agree markets which are remaining key drivers for sustaining our 3:45 3 minutes, 45 seconds growth trajectory and increasing market share. uh to mention a few other highlights on the 9-monthly basis. We just like to share obviously that with 3:53 3 minutes, 53 seconds the double digit so 2x growth in quarter uh our overall 9 months is growing 9.3% in the lubricant area which is again a 4:02 4 minutes, 2 seconds very good uh sign in terms of our overall growth trajectory and uh we've uh volume has been 1 lakh 23,000 kl for 4:10 4 minutes, 10 seconds 9 months and of course we are progressing very well uh towards the strategic objectives where the growth is really delivering that adlue also has 4:18 4 minutes, 18 seconds grown for us by close to 8% at 1 lakh 11,000 KL volume 9 months and our revenue also has grown uh uh we've 4:28 4 minutes, 28 seconds recorded a revenue of 2,951 crores which is uh good uh double digit growth of 4:34 4 minutes, 34 seconds 11.8% 8% uh for revenue which shows that in in uh it is above our volume growth. 4:40 4 minutes, 40 seconds So definitely improved segment and market and product mix has happened. In addition our EV subsidy TX is charging 4:47 4 minutes, 47 seconds ahead in in a way obviously acquiring new marquee customers. We have customers like Mahindra and MG Winfast and a 4:55 4 minutes, 55 seconds number of other bus OEMs delivering strong financial performance also in this. The business is on track to close the year in line with it with you know 5:03 5 minutes, 3 seconds whatever we have uh planned in obviously looking at the environment around and remains well aligned to our long-term strategy to scale and strengthen the EV 5:11 5 minutes, 11 seconds segment as a core pillar. Tax actually closed quarter 3 with a topline growth of 83% and if you take the 9-month 5:17 5 minutes, 17 seconds period it's close to 80% 78% to be exact in terms of revenue growth in the 9month period. That's all for me. I'd like to 5:25 5 minutes, 25 seconds now pass Manish to take you through some of the other highlights and obviously the financial figures also. Thank you. 5:32 5 minutes, 32 seconds Thank you Ravi. Good evening everyone. 5:35 5 minutes, 35 seconds So as we mentioned yeah it's been a very good quarter for us from all perspectives uh all-time high topline 5:42 5 minutes, 42 seconds volume and ITA and uh what is also very good sign in spite of uh you know cost pressures coming mainly from rupee 5:51 5 minutes, 51 seconds depreciation um during the quarter we have been able to expand our uh ITA margins uh 5:58 5 minutes, 58 seconds sequentially by nearly 67 basis points um because of the you 6:05 6 minutes, 5 seconds cost management and timely selective price actions we have taken. So overall 6:12 6 minutes, 12 seconds we are back to 13% plus ITA margin this quarter. Uh last two quarters before these were slightly uh lower side. So 6:20 6 minutes, 20 seconds that's a good sign and uh overall we continue to remain net debt free and um 6:29 6 minutes, 29 seconds also as we have announced the board has been happy to increase the dividend intimid 6:36 6 minutes, 36 seconds uh to 21 rupees per share that's 150% on the face value of rupees 2. So overall 6:43 6 minutes, 43 seconds uh yes the the board has shown confidence in the way business is tracking and with that um broad 6:51 6 minutes, 51 seconds highlights. Uh yeah one thing I also want to add is that the quarter last year December quarter had a one-time 7:00 7 minutes income of uh from sale of one surplus land near our Silvasa plant. So that is 12 cr rupees was sitting in the base and 7:09 7 minutes, 9 seconds as we all know every company has announced there was a one-time uh effect of new labor code provisioning which has 7:18 7 minutes, 18 seconds been uh which has been there in the quarter. So if we exclude these one times uh the pad growth also is in line with iita slightly better than that in fact to to nearly 7.4%. 7:29 7 minutes, 29 seconds So overall very good quarter from all perspective and we would be happy to take questions. Thank you. 7:38 7 minutes, 38 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 7:46 7 minutes, 46 seconds star and one on their touchtone telephone. If you wish to remove yourself from the question cube, you may 7:52 7 minutes, 52 seconds press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll 8:01 8 minutes, 1 second wait for a moment while the question queue assembles. 8:06 8 minutes, 6 seconds A reminder, whoever wishes to ask a question may press star and one at this time. 8:20 8 minutes, 20 seconds Our first question comes from the line of Sabri Hazarika from MK Global. Please go ahead. 8:28 8 minutes, 28 seconds Yeah, good afternoon and congratulations on those numbers. So I have two questions. Uh first is uh when you 8:36 8 minutes, 36 seconds mentioned segmentally most of the segments grew double digit uh but overall our lubricant sales grew by 8:43 8 minutes, 43 seconds around 8%. So is it the uh DEO and factory field where uh there is slowdown and can you give some more color on how 8:52 8 minutes, 52 seconds it is currently doing and what is the outlook? 8:59 8 minutes, 59 seconds Yeah, I think um you you picked up right. Uh basically it's u some of our other segments exports have been 9:07 9 minutes, 7 seconds slightly slower and marine segment has been slightly slower but when it comes to other domestic segments all have done 9:15 9 minutes, 15 seconds very well. CVO is of course single digit but many of them are are at a good double digit growth. 9:23 9 minutes, 23 seconds Okay. And um when do you uh see these segments also particular you're talking of commercial vehicle segment. 9:32 9 minutes, 32 seconds Yeah. Yeah. 9:33 9 minutes, 33 seconds It's been very it's been growing. In fact factory field as we all know uh the commercial vehicle cycle has really turned around from November onwards. So 9:42 9 minutes, 42 seconds we are really looking at a very very robust CV cycle revival with on the back of our strong OEM relationships in the 9:51 9 minutes, 51 seconds CV segment which is with multiple OEM partners and based on that we believe that the coming quarters and years will be very strong from CV point of view. 10:02 10 minutes, 2 seconds Yeah. So just to add Sabri to what Manish is mentioning CVO segment is a very high it's high market share for us also and we've been growing ahead of the 10:10 10 minutes, 10 seconds industry in that also but this normally grows single digit in terms of low single digit. So I think also there is a lot of long drain oils and other better 10:18 10 minutes, 18 seconds performance oils which is part of our strength also. So both these things I think obviously CBO is a large segment as you know diesel engine oil is more 10:26 10 minutes, 26 seconds than 40%. And so that's that's where uh that is there and exports also depends on you know how the various uh products 10:34 10 minutes, 34 seconds are there. So those goes through al also cyclical but it has always been growing for us. So these are some of the segments which uh have impacted the growth otherwise you're right double 10:42 10 minutes, 42 seconds digit growth in most of the segments and these two three segments this this quarter has been obviously uh single digit. Yeah. 10:50 10 minutes, 50 seconds Right. Uh second question is uh on this labor for uh so this uh 226 million uh 10:57 10 minutes, 57 seconds so this is like an exceptional but is there a recurring impact to it and uh is it there in that cost right now 11:06 11 minutes, 6 seconds the recurring impact will not be very significant as we understand from the current uh you know provisioning because it's a company which was you know many 11:15 11 minutes, 15 seconds of the employees are you know more than 15 20 years with the company And we started our plant in Silvas way back in 1993. 11:25 11 minutes, 25 seconds So you you know the longevity in Gulf is a a key you know thing we we are proud of that leads to accumulated 11:34 11 minutes, 34 seconds provisioning but uh recurring impact there will be marginal impact but not uh significant 11:42 11 minutes, 42 seconds right and uh do you reiterate your guidance of uh 8 9% uh lubricant volume 11:48 11 minutes, 48 seconds growth and uh uh 12 to 14% margin So I think uh our guidance is 2 to 3 11:57 11 minutes, 57 seconds years the volume growth which continues and we are seeing market is also picking up. So that continues and 12:06 12 minutes, 6 seconds considering that there is a rupee headwind which continue in January and you know the quarter ending December also we have to wait for rupee to 12:15 12 minutes, 15 seconds stabilize and uh we will currently be only talking about 12 to 14% margin band which we have been always guiding about. 12:24 12 minutes, 24 seconds We have to you know take certain pricing actions when and as for margin management whenever needed but uh 12:33 12 minutes, 33 seconds overall we have 12 to 14% guidance for now and eventually we have been highlighting in the past that we have to 12:41 12 minutes, 41 seconds move to the next trajectory of 14 to 16% over medium to over a medium term 12:48 12 minutes, 48 seconds right so so no price pricing actions have been taken uh recently right yeah yes so as I had mentioned mentioned in some of my interactions uh we are 12:56 12 minutes, 56 seconds seeing that the pricing actions are happening. We have also taken a few and that's a good sign. So I think that we are hoping that uh you know we get that 13:04 13 minutes, 4 seconds obviously some of our OEM customers and all there's a quarterly PVC so that takes a bit of time but it's on the positive that pricing actions are coming. 13:12 13 minutes, 12 seconds Okay. Thank you so much. All the best. Thank you sir. 13:17 13 minutes, 17 seconds Thank you ladies and gentlemen. If you wish to ask a question, you may press star and one at this time. 13:26 13 minutes, 26 seconds Our next question comes from the line of Dhar Popat from Choice International Limited. Please go ahead. 13:35 13 minutes, 35 seconds Yeah, congratulations on two of my question was primarily to do with the uh plant expansion both in Silvas and 13:44 13 minutes, 44 seconds Chennai. So last time I recall that u the machinity for the Chennai plant u was on the way or maybe already there. 13:52 13 minutes, 52 seconds So um my point was more on where can we start to see incrementally more volumes basically on both these 14:00 14 minutes plans and uh second question I had was more on the cash that the company has on the books. So what that it is targeting 14:10 14 minutes, 10 seconds certain M&As in I understand more into the battery side of things or in the EV space particularly. So if there is any 14:18 14 minutes, 18 seconds development or any particular area where the company is looking out for acquisitions 14:25 14 minutes, 25 seconds let's remind so Mr. 14:30 14 minutes, 30 seconds Basically you know we have announced a 55 cr rupees of capex for expansion of our silvasa and chennai cap capacities. 14:41 14 minutes, 41 seconds The work is in progress. 14:43 14 minutes, 43 seconds It's going to take uh maybe you know in Chennai it will be coming sooner but uh in quarter one of next financial year 14:51 14 minutes, 51 seconds and uh Silvasa will take u you know the it will be ready by the end of third quarter. 15:00 15 minutes Now having said that we always have maintained that we can produce based on the market demand by running third shift 15:07 15 minutes, 7 seconds extra shift in the current plant and current setup with some incremental balancing equipment. 15:13 15 minutes, 13 seconds So there is no challenge for fulfilling the current demand and there's no direct correlation between the capacity and 15:22 15 minutes, 22 seconds market demand and volume growth. We are preparing ourselves for future because we are growing two to threex the 15:30 15 minutes, 30 seconds industry and we need to have capacity sufficient capacity going forward. So the entire capex is towards that but all 15:38 15 minutes, 38 seconds our all our current demands and the future growth for the next you know 6 months to 1 year can be fulfilled from 15:46 15 minutes, 46 seconds the current setup itself. It's not a challenge. 15:50 15 minutes, 50 seconds Coming to the second question of cash and uh we keep looking at acquisition opportunities. 15:57 15 minutes, 57 seconds Uh we have been uh vocal about it that we want to do more acquisitions in the EV space also in the lubricant space 16:05 16 minutes, 5 seconds itself some of the niche products including in industrials other categories. So we are we as we speak we 16:13 16 minutes, 13 seconds keep evaluating many many proposals and obviously it has to have a right fit and synergy. So as and when something is 16:20 16 minutes, 20 seconds crystallized we'll definitely make some announcements. 16:25 16 minutes, 25 seconds If I can just follow up one thing the so primarily in the annual report it is mentioned about 12 plus OEMs are were 16:32 16 minutes, 32 seconds already approved by them. So if there's any further more any others on boarded that is one and 16:40 16 minutes, 40 seconds second I also wanted to ask about one in four buses I understand were being caused by the charges that that are 16:50 16 minutes, 50 seconds provided by oil so some more penetration of any any further color that you can throw it out on these 16:57 16 minutes, 57 seconds if there is some development around these areas so d you I don't just to clarify the first question you're asking is on 12 OEMs for chargers. 17:08 17 minutes, 8 seconds Yeah. 12 12 OEMs for chargers. Yes. Yes. 17:10 17 minutes, 10 seconds Yes. For the Yeah. Yeah. Yeah. For the TX chargers. 17:14 17 minutes, 14 seconds So, TX is working with a number of bus OEMs which we have. I think major part of they cover about 60 70% of the bus 17:22 17 minutes, 22 seconds OEMs. Also, some of the bus OEMs operate through charge point uh you know companies etc. So, we are catering to that. So most of the market we are 17:30 17 minutes, 30 seconds covering we have got our uh chargers accepted by them and we have named a few like we've got uh Electra we have got 17:39 17 minutes, 39 seconds switch some of those names you know and we are working with them the other is uh we are working also for the AC chargers 17:45 17 minutes, 45 seconds with uh MGN Winfast and we also work with Mahindra for the charging so that is uh there and regarding buses as you 17:54 17 minutes, 54 seconds know the EV buses is an area where the penetration of EV is going up because of also the emission requirements of 18:01 18 minutes, 1 second various cities. There we our TEX uh you know chargers are there in you know I would say right now we between uh four 18:10 18 minutes, 10 seconds to every four to three buses we would have our charger going into the Indian market but this is a very early stage so these market will grow and we'll 18:17 18 minutes, 17 seconds obviously be uh expecting that we able to grow in that in terms of our DC charging business. 18:24 18 minutes, 24 seconds Uh thank you. But just if I got it correctly, you are also supplying those uh AC chargers to Mahindra as well now. Is it is that correct? 18:32 18 minutes, 32 seconds No, we are supplying we are supplying the AC charges to MG and Winfast and Mahindra is putting up is putting up the 18:40 18 minutes, 40 seconds DC charges which are there which go into their uh they also have uh they're setting up in their dealerships and also in their some of the uh you know uh 18:49 18 minutes, 49 seconds outside charging facilities which Mahindra has embarked upon. 18:54 18 minutes, 54 seconds Okay, very helpful. Thank you. Thank you so much. Thank you so much. 18:58 18 minutes, 58 seconds Thank you. Our next question comes from the line of Nitan Tari from Philip Capital India Limited. Please go ahead. 19:07 19 minutes, 7 seconds Hi sir, good evening. Uh thanks for the opportunity. Uh sir, I I assume that you've uh basically indicated your thoughts on this question in the past as 19:15 19 minutes, 15 seconds well, but I'm just reiterating this question. So um there's lot of uh basically noise around data centers in the country. In fact the recent budget 19:23 19 minutes, 23 seconds also indicated a tax holiday and there are number of announcements which are coming in from hyperscalers and other companies as well for setting up data 19:30 19 minutes, 30 seconds data centers. So are you uh like you know reassessing uh this segment from a demand perspective and uh if you can give us a fresh perspective about what 19:39 19 minutes, 39 seconds you're thinking and in terms of uh demand as well as product development um for catering to this particular segment 19:46 19 minutes, 46 seconds and uh what who would actually be your uh uh like you know peers or competitors also when when it when it comes to data center cooling. 19:56 19 minutes, 56 seconds Yeah. So uh as we have mentioned see data center cooling currently there's lot of air cool now it is moving to liquid cool because of the speed and 20:04 20 minutes, 4 seconds requirement. Now uh a lot of the data centers coming up they have to obviously invest in this liquid cool infrastructure. So we have got two 20:12 20 minutes, 12 seconds products which we have made with our global team in terms of technology. 20:16 20 minutes, 16 seconds These products uh we'll we'll we will be testing them and validating them in terms of specifications. So we will have to work with the uh you know uh 20:25 20 minutes, 25 seconds companies setting up the data centers including the technology guys putting up the hardware and other things and overall these things uh these products 20:33 20 minutes, 33 seconds are there and as I as we mentioned many times the market is globally also these are coming up in India also but the 20:40 20 minutes, 40 seconds conversion to uh you know the liquid cooling which is there is going to happen and it's going to be a small volume but we still see it growing and 20:48 20 minutes, 48 seconds this so we are getting ourselves ready to get our product validated and working working with some of these hardware and there are also some 20:56 20 minutes, 56 seconds organizations which do the testing. So there are certain testing procedures which we need to follow. So the products are ready now. So the it is the next stage of testing and validation. 21:06 21 minutes, 6 seconds Sure. So that's why um like you know um I had asked this question because I remember in the past as well you had indicated that this segment per se is 21:14 21 minutes, 14 seconds expected to be a very small one. The reason I um asked for a reassess perspective is that um today I mean like you know there's a lot of stress on high 21:23 21 minutes, 23 seconds compute and uh like you know denser sort of data centers uh as such which could uh primarily be liquid cool. So that's 21:31 21 minutes, 31 seconds why I thought let me have your perspective if there's any change in terms of assessment of demand uh as such and and would your uh the second part of 21:39 21 minutes, 39 seconds the question was like you know would your uh peers and and competition in this space be only uh lubricant manufacturers or would it also be other 21:46 21 minutes, 46 seconds chemical companies if you can just like you know help us understand that as well. Yeah. So there are products available. 21:53 21 minutes, 53 seconds There are others also specialized companies globally whatever knowledge we have there making the product. But definitely the lubricant companies are 22:02 22 minutes, 2 seconds also well positioned to test this because it is a similar product made from the similar raw materials base oil 22:09 22 minutes, 9 seconds and synthetic grade. So both the products are materials we use also. But there are some other players who would have this product and uh the key would 22:17 22 minutes, 17 seconds be to see how this is getting uh you know how they're being set up and then have products ready which can cater to it and you're right now the need for 22:24 22 minutes, 24 seconds computing is becoming higher. So we hope we are monitoring the trend and uh we'll be ready with the products uh to be able to position ourselves. Yeah. 22:35 22 minutes, 35 seconds Um right and sir my second question was with respect to your aid margin. So you've indicated a broad percentage range but I was wondering if you can 22:43 22 minutes, 43 seconds help us understand basically the contribution at the level from a rupees per liter perspective as well that what is the kind of number if we have like 22:52 22 minutes, 52 seconds you know in terms of our targeted um number over there. 22:58 22 minutes, 58 seconds So usually we we given guidance on percentage basis only while uh while we 23:06 23 minutes, 6 seconds have been uh you know very clearly saying that 12 to 14% band uh we want to maintain and while growing volumes so 23:15 23 minutes, 15 seconds that is our objective which have we have been actually delivering in fact in last many years and quarters that we have been growing two to threex the volume 23:24 23 minutes, 24 seconds keeping our margin band intact in the band of 12 to 14%. % um per liter is something which is um which has been 23:32 23 minutes, 32 seconds internally tracked uh because that's important from passing on the cost increases etc in different segments in 23:40 23 minutes, 40 seconds uh and with different OEMs as well but as a guidance we keep giving the guidance of percentage 12 to 14% band 23:49 23 minutes, 49 seconds also in good quarters it should be towards the upper end of this band and in some of the quarters where we have seen in June quarter In September 23:57 23 minutes, 57 seconds quarter it was towards the lower end but as we see we have things have been you know picking up 67 basis points increase 24:05 24 minutes, 5 seconds in the IITA margins sequentially is a good indication in spite of rupee. I mentioned in my opening remarks. Overall 24:12 24 minutes, 12 seconds we see that market is also looking at more pricing actions which is uh which is going to be helpful because rupee 24:19 24 minutes, 19 seconds continues to behave very erratic and um so good sign is that crude has been 24:26 24 minutes, 26 seconds stable. So that's a positive because it is in that band of $6570 and as long as it remains in this band 24:35 24 minutes, 35 seconds uh our input cost should be stable. So that that's what we are looking at. 24:40 24 minutes, 40 seconds Understood sir. Uh thanks so much for answering my question sir. I'll get back in the queue. Thank you. 24:47 24 minutes, 47 seconds Thank you. Our next question comes from the line of Mahesh Madu Sudhan from Kantilal Shavanal Securities Private Limited. Please go ahead. 24:57 24 minutes, 57 seconds Uh good afternoon sir. Thanks for having me. Uh first of all congratulation for 25:05 25 minutes, 5 seconds good result and the dividend. Sir I'd like to ask you one question about price hike. If any specific strategy followed 25:12 25 minutes, 12 seconds for price hike or any other ideology. 25:21 25 minutes, 21 seconds See price hike and margin management is a you know perpetual exercise uh which the company has to do. It depends on 25:29 25 minutes, 29 seconds various factors our input cost competitive scenario in the market segment wise demand and supply 25:36 25 minutes, 36 seconds conditions. So there are many factors which play in taking pricing decisions. 25:41 25 minutes, 41 seconds There is a proper obviously monitoring and controls to ensure that the price management uh you know process is robust 25:50 25 minutes, 50 seconds and uh we are seeing that we have been in spite of such pressures we have been able to actually sequentially increase our gross margins 25:59 25 minutes, 59 seconds and a margin. Okay. Okay. Overall any margin specific number specific you can give? 26:08 26 minutes, 8 seconds We have mentioned in this call in the that we have a guidance of 12 to 14% ITA margin. Thank you. 26:16 26 minutes, 16 seconds Thank you. Thank you. 26:22 26 minutes, 22 seconds Our next question comes from the line of Kan Maha from Bodha BNP Paribas Mutual Fund. Please go ahead. 26:39 26 minutes, 39 seconds Your line has been unmuted. Please go ahead with your question. 26:47 26 minutes, 47 seconds Am I audible? 26:50 26 minutes, 50 seconds Thank you for this opportunity. Sir, wanted to understand the increase in the competitive intensity in the market. 26:58 26 minutes, 58 seconds Last year I think one of our biggest competitor has been able to double the volume growth as well as we are also 27:05 27 minutes, 5 seconds hearing from PNC competitor uh that OMC competitor that they are also planning to sort of increase the focus on the loop segment as well. 27:18 27 minutes, 18 seconds So which are the specific segments where we are seeing the competing competitive intensity increasing and what are the 27:25 27 minutes, 25 seconds specific responses from our side to hold on to our position? 27:32 27 minutes, 32 seconds Well, we have been uh we have been building our uh two to three years growth for the last decade and even more. So I think our business model uh 27:40 27 minutes, 40 seconds and we also see that we've got scope to grow because our market shares are you know overall in some segments 9 to 10% mainly diesel engine oil and motorcycle 27:47 27 minutes, 47 seconds the others we are six seven and sometimes less than five so for us our model continues to be focusing on our strengths our approach competitive 27:56 27 minutes, 56 seconds intensity always been there in this market as you know there are you know 16 17 players which are the PSUs and the multinationals and local brands so I 28:04 28 minutes, 4 seconds think that is something which continues to be there we are also increasing capacity as you said others also increasing capacity. So I think each brand has its own position. Uh we're 28:13 28 minutes, 13 seconds very happy to share with you that today Gulf is the uh you know top two brand in certain segments top three brand overall in all the segments as we have invested 28:22 28 minutes, 22 seconds in the brand. Our distribution is also number two in the private sector and we are there. So we are uh we have the competition so we do change our strategy 28:30 28 minutes, 30 seconds based on segments and of course competitive uh analysis happens. So this is an ongoing process like Manish mentioned of the pricing. So this is 28:37 28 minutes, 37 seconds part of our DNA and I think uh our position which has been built up on the brand and our OEM partnerships our B2C business our industrial infrastructure 28:45 28 minutes, 45 seconds segments and the other segments which we look at these have been our strength and we have been able to uh you know demonstrate that and in spite of the 28:54 28 minutes, 54 seconds comp competition is there and plus the market is growing 3 to 4%. So most of the players who are there will look at market growth and uh definitely the 29:03 29 minutes, 3 seconds players who can do better will gain more. We have been consistent in fact this year also we continue to grow and uh you know 8% this quarter 9.3% in the 29:12 29 minutes, 12 seconds year so we we are focused on that and also keeping ourselves uh uh you know looking at market share across segments where we are present. 29:22 29 minutes, 22 seconds Sure. One more question was about the market growth itself. So with the GST 29:29 29 minutes, 29 seconds sort of cuts there has been some bit of additional growth that we are seeing in the auto market. Do you think that this can change the market growth trajectory 29:38 29 minutes, 38 seconds from 3 to 4% to an upward rate? Are there any initial price? No. 29:43 29 minutes, 43 seconds You see this market is lubricants is sold for the factory field when new ces are made. So definitely if the auto 29:50 29 minutes, 50 seconds industry and all sell more all the industries sell more construction equipment the factory field will go up because that's a good sign. most of them 29:57 29 minutes, 57 seconds are growing 6 7% some are growing and uh then you also have the EV EV penetration coming so to that extent the new vehicles some EV is coming in certain 30:05 30 minutes, 5 seconds segments 5 6% 4% you know the data but overall lubricants is going to continue to be consumed and uh we we see that 30:13 30 minutes, 13 seconds also lubricants are getting better quality so normally we take a percent 3 4% because that's how we are seeing the market in the next decade or so and in 30:21 30 minutes, 21 seconds the case of industrial it'll be slightly higher maybe a percentage higher so this is the trajectory predicted by experts decline and we also are confident that 30:29 30 minutes, 29 seconds this will go. Of course, we want to look at our market share going up. So, we will continue to grow 2 to 3x this growth rate. 30:37 30 minutes, 37 seconds Thank you. Thank you. 30:41 30 minutes, 41 seconds Thank you. Our next question comes from the line of Bat Gulati from Dalal and Brocha. Please go ahead. 30:49 30 minutes, 49 seconds Yeah. Hi sir, thank you for the opportunity. I just had a question regarding our uh EV segment uh tyrret 30:57 30 minutes, 57 seconds just wanted to understand what is our future path to growing over there and you know how do we plan to do we see 31:05 31 minutes, 5 seconds margins going up in that business and just how do we you know uh kind of understand the trajectory in which we're trying to take it from a strategy point 31:13 31 minutes, 13 seconds of view and as well from a market point of We see EV as a potential. 31:24 31 minutes, 24 seconds We know that while we have been very clearly saying that lubricants will continue to grow for the foreseeable future because the ice vehicle growth will continue. 31:35 31 minutes, 35 seconds We also believe that there will be an EV penetration in certain segments in certain proportion and that is where we 31:43 31 minutes, 43 seconds wanted to you know use that opportunity primarily because of four things you know we have a very strong brand 31:52 31 minutes, 52 seconds in within the automotive segment which consumer knows Gulf as a brand or the auto automotive users today they are 32:00 32 minutes using ICE vehicle tomorrow they may use EV vehicles they know Gulf as a Second strong point we have is that we 32:08 32 minutes, 8 seconds have an significant presence in the automotive OEMs which u you know we are in touch with for lubricants and when 32:17 32 minutes, 17 seconds the incumbent uh you know vehicle manufacturers will launch EV vehicles or EV models we should be you know 32:25 32 minutes, 25 seconds servicing them in terms of their requirement for chargers, EV fluids etc. That was a very strong point we have. 32:32 32 minutes, 32 seconds And then third point is that we have a lot of B2B customers, infrastructure customers who will require charges 32:39 32 minutes, 39 seconds and our distribution which is more than 80,000 touch points. We have more than 10,000 of Gulf branded bike stops, car 32:48 32 minutes, 48 seconds stops. So these four five strengths we have got as a lubricant company and it was a logical progression to look at EV 32:56 32 minutes, 56 seconds as an opportunity as an additional opportunity rather uh while continuing to focus on lubricant to grow 2 to 3x. 33:05 33 minutes, 5 seconds So with that thought process we have been making this as a very strong pillar 33:11 33 minutes, 11 seconds when we acquired TX 51% stake which we have now increased uh during the quarter to 65% 33:18 33 minutes, 18 seconds uh in the December quarter we obviously had a previous audited turnover of 12 cr 33:26 33 minutes, 26 seconds rupes and last year we clocked 80 cr rupes nearly and this year we are already you 33:35 33 minutes, 35 seconds they are growing 70 80% in terms of our growth. So overall we believe that EV charger business and the other 33:42 33 minutes, 42 seconds investments we have done in EV will make a very very strong pillar for us going forward. Our first aim is to have a 300 33:51 33 minutes, 51 seconds to 400 cr topline from this business in next 3 years to four years time and then we'll build on that. 34:00 34 minutes Thank you. 34:02 34 minutes, 2 seconds All right. Got it. And so just to understand that the new capacity that we're adding like you said that it doesn't necessarily mean that volumes 34:09 34 minutes, 9 seconds will go up. It it'll mean that efficiencies will come into our manufacturing instead of overutilizing our current facilities. So could this 34:17 34 minutes, 17 seconds mean that this can somewhat improve our margins? I understand that we've given a guidance between the 12 to 14% uh margin 34:24 34 minutes, 24 seconds range but does this mean that with this better efficiencies can help us get to the higher band of that margin range or 34:32 34 minutes, 32 seconds you know just because currently our capacities are running way beyond that 100% utilization mark so 34:39 34 minutes, 39 seconds so more than cost I think it is it will bring operational efficiencies and will make us ready for future uh obviously 34:47 34 minutes, 47 seconds running a third shift in a plant is very very comfortable cumbersome process in lubricant industries the processing cost or the manufacturing cost is not that 34:54 34 minutes, 54 seconds significant part of the overall cost component. So from that perspective it's a very very small component of the cost 35:01 35 minutes, 1 second uh cost sheet but having said that uh we have to be ready because we make every product inhouse. We don't make any of 35:09 35 minutes, 9 seconds our lubricant outside and we need to have capacity because uh our quality is the most important thing. Uh and uh you 35:17 35 minutes, 17 seconds can only you know have a solid control on quality when you make your products in house. So that is why we are building this capacity of future. Obviously our 35:26 35 minutes, 26 seconds volume growth will be in line with the market demand and 2 to 3x of that what we want to grow. 35:34 35 minutes, 34 seconds So that would mean that there wouldn't be any significant cost benefit by getting this into our adding this capacity. It would just be an operational benefit overall. 35:45 35 minutes, 45 seconds Yeah. Because in lubricant industry the operational cost or manufacturing cost is very insignificant portion of uh the overall cost. 35:54 35 minutes, 54 seconds Fair. Okay. Got it. Thank you sir. 35:58 35 minutes, 58 seconds Thank you. Participants who wish to ask a question may press star and one at this time. 36:05 36 minutes, 5 seconds Our next question is from the line of Arya Patel from MK Global. Please go ahead. 36:13 36 minutes, 13 seconds Yeah. Uh thank you sir for the opportunity and congratulations on the set of number. I just wanted to uh ask about you know Yeah. Am I aud? 36:24 36 minutes, 24 seconds Yes. Yes. 36:25 36 minutes, 25 seconds Yeah. Yeah. So I just wanted to ask about how the baso prices have you know moved along with the brand prices. So what we have observed or what we believe 36:34 36 minutes, 34 seconds is uh the correction that we've seen in the brand prices equivalent has not been seen in the basis. So how do we uh look 36:42 36 minutes, 42 seconds into this and what is our expectations going ahead for the price? 36:48 36 minutes, 48 seconds No, so you are right uh you know while uh you know there is a long-term correlation between the crude oil prices 36:54 36 minutes, 54 seconds and the base oil prices. If you plot a chart of five years or you know three years you'll find a sort of symmetry but 37:03 37 minutes, 3 seconds in a in a short to medium term the demand supply for each grade of B soil also plays a role and this time around 37:11 37 minutes, 11 seconds what we have seen also as you rightly observed is that the fall of crude from 37:17 37 minutes, 17 seconds $75 $80 or around $75 to $65 translated into the similar kind of fall on the soil site. 37:27 37 minutes, 27 seconds of various demand supply situations and many of the major refiners of B soil 37:33 37 minutes, 33 seconds taking maintenance shutdowns etc. So butterm perspective you're right it has 37:40 37 minutes, 40 seconds to have a sort of correlation with the food prices but in shortterm demand supply also plays 37:50 37 minutes, 50 seconds got it sir thank you for the answer that's it from here thank you thank you next we have a follow-up 37:59 37 minutes, 59 seconds question from Dhaval Popert from Choice International Limited please go ahead yeah thank Thank you for the 38:07 38 minutes, 7 seconds opportunity. I uh wanted to pass uh two things. One uh regarding the M ranges or the empowered program that you have been running. So if you can uh probably 38:16 38 minutes, 16 seconds provide some color on um on the on how is this how how does it stand out or the number of is already on the ground. And 38:24 38 minutes, 24 seconds second question I have is more from a basil perspective as so there are a few refineries who have commissioned these 38:30 38 minutes, 30 seconds uh basil plants recently and uh so if possible can you comment on whether oil 38:38 38 minutes, 38 seconds will increase its uh share of domestic procurement of bay oil from what it is currently if possible if you can comment on this. 38:49 38 minutes, 49 seconds Sorry what was your first question? 38:52 38 minutes, 52 seconds Now first question was on the emp power the mechanics program that gile has launched in August 2025. So I wanted to 39:00 39 minutes understand if the number of m rangers already on the ground or uh how the 39:06 39 minutes, 6 seconds program has been panning out like I understand it is close to about 100,000 mechanics is what gal is targeting but 39:14 39 minutes, 14 seconds how has this uh program planned out so far and uh second question is more on the results. So first question I just wanted to know some more color on empower program if you have. 39:25 39 minutes, 25 seconds Yeah. Yeah. So this is an initiative which uh we normally the mechanic is a big influencer at times obviously has a 39:31 39 minutes, 31 seconds very key role to to talk about. uh the influencer has a very key role to play and this has been part of our marketing 39:40 39 minutes, 40 seconds mix for ages but empower is now a initiative which is taken by the marketing team to basically have a dedicated team across to look at 39:48 39 minutes, 48 seconds mechanics and it is going very well so I think we are on course as you you have also put some numbers but basically they cover mechanics and talk to them about 39:57 39 minutes, 57 seconds our product and obviously we are able to uh have an exchange with the mechanics in these forums and this helps us to convert people and also increase 40:05 40 minutes, 5 seconds consumption of uh Gulf and uh that that is where the program is and it's it's quite it's going uh in the right direction and right steps as planned. 40:18 40 minutes, 18 seconds Yeah. Could you hear me? Sorry, there's some sound disturbance where we are sitting. Can you hear us? 40:24 40 minutes, 24 seconds Yes. Yes, I'm able to hear you. It was it was quite clear. 40:27 40 minutes, 27 seconds The second thing you see today India is importing a lot of the base oil. Okay. 40:32 40 minutes, 32 seconds the local capacity that the current uh uh PS PSUs have that is only meeting u 40:40 40 minutes, 40 seconds not even half of the uh less than half the requirement in terms of the requirement for the base oil in India. 40:47 40 minutes, 47 seconds So now you have various countries like Korea, Singapore, UE all kinds of all countries are exporting base oil. So the 40:54 40 minutes, 54 seconds capacity increase that the three PSUs have planned uh is uh is going to take up this uh current capacity by at least 41:03 41 minutes, 3 seconds you know I would say uh whatever numbers we are seeing in the market that this would go up uh you know to at least uh 41:11 41 minutes, 11 seconds 50 to 60 70% more than what it is currently but that is all plated capacity we don't know what will come so if that comes in then we will have uh 41:19 41 minutes, 19 seconds base oil available here we are anyway buying uh from the local supplies And uh we will be happy if that happens and becomes more competitive. So that 41:27 41 minutes, 27 seconds becomes uh good for the country also where we can have base oil available here and the the importers the people who are exporting into India they also I 41:36 41 minutes, 36 seconds think the overall capacity coming up will still require some imports as we look at. 41:45 41 minutes, 45 seconds Thank you. Thank you. Thank you. 41:52 41 minutes, 52 seconds Our next question comes from the line of Proel Saint from ICICI Securities Limited. Please go ahead. 42:00 42 minutes Thank you sir. I thought I'll also take the opportunity. I just had a couple of brief questions. Firstly uh I think one uh participant did ask about the 42:08 42 minutes, 8 seconds competitive intensity. Just wanted to sort of maybe follow up on that in terms of how you see the uh you know given 42:15 42 minutes, 15 seconds that everybody is focusing on this business again after maybe a lull over a you know over the last two three years. 42:22 42 minutes, 22 seconds Do you see the overall industry growth also sort of maybe picking up over the next three to five years? I mean can can 42:29 42 minutes, 29 seconds the fact that everybody's pushing for it maybe have an influence on overall growth itself? 42:35 42 minutes, 35 seconds No, I think the the industry size what we are seeing is that 3 to 4% growth and maybe slightly high in industrial obviously if the penetration of vehicles 42:44 42 minutes, 44 seconds is more and the economy does even better the usage goes up whether it's mining infrastructure all that agures well for the country as we know is is today the 42:53 42 minutes, 53 seconds third largest market as an economy also we are going you know we're going to be a huge economy going up and uh I think the competitive intensity is showing 43:02 43 minutes, 2 seconds that the market is attractive is showing that uh There are there is a attraction of players strengthening their production base as we are also doing. Uh 43:10 43 minutes, 10 seconds there are uh you know strategies where people are coming in but definitely for us uh the market and the value addition that can happen is is basically uh you 43:20 43 minutes, 20 seconds know really helping and uh manufacturing push by the government as you look at industrialization will certainly help. 43:26 43 minutes, 26 seconds So once we see all these coming probably that manufacturing push where India can become a larger global supplier or regional supplier that can help to grow 43:34 43 minutes, 34 seconds the market and I think having uh more competitors uh I there's always going to be always the competitive intensity but 43:41 43 minutes, 41 seconds I think if you are seeing these shoots coming up the growth could go up you know in terms of government push consumption GDP so that in addition to 43:50 43 minutes, 50 seconds you know competition coming doesn't mean that the market will go up just because competition you need to see the other factors going up. 43:56 43 minutes, 56 seconds So, so just as a followup in terms of our strategy, obviously I think you and Manisha both have been talking about the fact that there's a concerted attempt 44:05 44 minutes, 5 seconds and you know it's playing out as well in terms of premiumization of our product line and pricing differentials with the leading players getting cut and 44:14 44 minutes, 14 seconds therefore margin improvement likely. But if competitive intensity improves, can there be a situation where maybe you 44:20 44 minutes, 20 seconds know the the margin uptick uh maybe takes a little bit longer than what the earlier ended or as of now we don't see 44:27 44 minutes, 27 seconds any threat in terms of at least our targets and our plan. 44:32 44 minutes, 32 seconds No, I think the last if you take the last two decades of you know one and a half decades we've been growing and there has been competition even then. So 44:39 44 minutes, 39 seconds I think for us it is our brand has got built up. So how do we build our distribution faster? How do we get into the segments where we have already made 44:46 44 minutes, 46 seconds an I would say a entry and a mid-level singledigit share how do you take it up and that's what our strategy is which we 44:54 44 minutes, 54 seconds call unlock 2.0 How can we accelerate, how can we premiumize, how can we transform? Uh we're also looking at core transformation, digitization. We're 45:02 45 minutes, 2 seconds looking at uh you know getting into uh the EV space. So for us our strategy is quite clear and we are very well in 45:09 45 minutes, 9 seconds that. So we see we see that the adaptability to competition and market is part of our DNA and we are continue to strive to make it stronger. 45:19 45 minutes, 19 seconds Understood sir. One last question if I may with respect to TX. I'm sorry if I missed this earlier. What is the sort of revenue we are expecting to close this 45:28 45 minutes, 28 seconds year at and what sort of AIA if at all can be shared as of now? 45:34 45 minutes, 34 seconds No. So on TEX we will not give any guidance in terms of number because uh you know the year is yet to end and uh 45:41 45 minutes, 41 seconds it's a very uh you know it's a business which is still in its nence stage. I would say we'll have to see every 45:49 45 minutes, 49 seconds quarter but overall overall we are looking definitely to close above 100 cr for sure uh for this for this uh 45:59 45 minutes, 59 seconds business in this year with a positive ITA understood sir that's all from my end thank you operator 46:07 46 minutes, 7 seconds yeah thank you as there are no further questions I would now like to hand the conference over to management for closing comments 46:15 46 minutes, 15 seconds over to you sir Yeah, thank you. I think I've covered some of the outlook in the previous question, but uh just to highlight, I had two uh data points to 46:23 46 minutes, 23 seconds give. Uh we've launched a few nextg product ranges uh which basically you know we've launched fire resistance 46:30 46 minutes, 30 seconds hydraulic oils recently, energy efficient zinc free hydraulic oils mainly for the CV uh CV segment. We also launched our new range of Cintra 46:39 46 minutes, 39 seconds motorcycle oils and a number of other gear oils which are synthetic. So just wanted to share that. We've also announced strategic ties with the 46:48 46 minutes, 48 seconds leading construction equipment manufacturers again strengthening our presence in construction infrastructure uh basically Aman India which is 46:55 46 minutes, 55 seconds building uh global leader in road building machinery and we are the official lubricants partner for the entire equipment portfolio again high performance products under the Amam uh 47:04 47 minutes, 4 seconds among genuine oil range. ACE is another partner we have collaborated to expand with new additions to the genuine oil range of ACE and XCMG which is also uh a 47:14 47 minutes, 14 seconds key leading player coming up we have also launch the range so these are three four points I wanted to add but coming to the outlook we continuing with our 47:22 47 minutes, 22 seconds unlock 2.0 to which I mentioned in the last question. Uh this is basically to focus on accelerating our growth and in the segments where we have lower market 47:30 47 minutes, 30 seconds share to look at at least three times the market growth rate. We are increasing our mix of premium synthetics and you know value added products digital transformation and growth in 47:39 47 minutes, 39 seconds e-mobility value chain. We will focus on these segments and our core segments to grow. uh we have been growing 2x the 47:47 47 minutes, 47 seconds industry 3x the industry but that continues to be our focus and uh definitely uh we've been mentioning our 12 to 14% margin band and with an 47:55 47 minutes, 55 seconds ambition to go to the higher level obviously we have to monitor the pricing and the exchange rate but we continue to push our product mix marketing 48:03 48 minutes, 3 seconds initiatives brand building focusing on margin management efficiency to get the profitable and sustainable growth which we have and uh I think for us 48:12 48 minutes, 12 seconds distribution is key to take up double digit we'll continue our investments in the brand uh and we are you know definitely looking at going to the next 48:20 48 minutes, 20 seconds level and continuing our growth trajectory. So look forward to uh interact with you the next call and thank you so much for your time. Good evening. 48:30 48 minutes, 30 seconds Thank you on behalf of ICICI Securities Limited. That concludes this conference. 48:36 48 minutes, 36 seconds Thank you for joining us and you may now disconnect your lines.