30 July 2012
Initiating Coverage | Sector: Consumer
Castrol India
Enduring and widening moat
Siddharth Bothra
(Siddharth.Bothra@MotilalOswal.com); +91 22 3029 5127

Castrol India
Castrol India: Enduring and widening moat
Page No.
Summary
........................................................................................................
3-4
Has created an enduring and widening moat
...........................................
5-11
To benefit from industry transition
..........................................................
12-15
Margin/unit to sustain
..............................................................................
16-25
A cash machine for shareholders
..............................................................
26-27
Buy with a DCF-based target price of INR629, 17% upside
.....................
28-32
Key concerns
....................................................................................................
33
Background
......................................................................................................
34
Key management personnel
...........................................................................
35
Financials and valuation
...........................................................................
36-37
30 July 2012
2

30 July 2012
Initiating Coverage | Sector: Consumer
Castrol India
BSE SENSEX
S&P CNX
16,839
5,100
CMP: INR536
TP: INR629
Buy
Enduring and widening moat
A cash machine for shareholders; Buy for 17% upside
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel.Per. (%)
M.Cap (INR b)
M.Cap (USD b)
CSTRL IN
247.3
576/380
5/16/7
132.5
2.4
Valuation summary (INR m)
Y/E Dec
2012E 2013E 2014E
Net Sales
32.9 35.4 38.6
EBITDA
6.4
8.0
8.9
Adj NP
4.6
5.6
6.3
EPS (INR)
18.4 22.7 25.4
EPS Gr.(%)
-5
23
12
BV/Sh.(INR) 25.4 27.7 29.8
P/E(X)
29.1 23.6 21.1
P/BV (x)
21.1 19.4 18.0
EV/EBITDA (x) 19.8 15.8 14.0
EV/ Sales (x)
3.9
3.6
3.2
RoE (%)
83.8 74.0 85.6
RoCE (%)
109.4 99.1 116.7
Price as on 27 July 2012
Castrol India, a 71% subsidiary of British Petroleum Group (BP), is a leading lubricants
player in India, with ~19% market share in the auto lube bazzar segment.
Castrol provides a vehicle to invest in a company with multiple and rare moats, huge
free cash flows, high governance standards and reasonable valuations.
Its key focus area is the premium personal mobility automobile segment, which is
relatively insulated from economic cycles, unlike the freight and OE market.
Over CY01-11, Castrol has posted revenue and net profit CAGR of 10% and 16%
respectively, while it has generated shareholder returns of 22% (adjusted for dividends).
Given its predictable and stable FCFs, low re-investment requirements and consistent
payout ratio, we believe DCF is the best way to value the company.
We initiate coverage with a Buy rating and a target price of INR629, 17% upside.
Has created an enduring and widening moat
Despite intense competition in the lubricants industry in the last decade, Castrol
has been able to successfully create and appropriate value through adept market
segmentation. Its primary market is the premium personal mobility automobile
segment, where it is able to leverage its trusted brand, product performance
track record and unique service attributes. Unlike its competitors that have been
making low to negligible investments in their brands, Castrol has consistently
been investing 6-7% of its sales (INR2.2b in CY11) in brand-building. It enjoys
tremendous pricing power, with most of its products commanding 20-25%
premium.
Shareholding pattern (%)
As on
Jun-12 Mar-12 Jun-11
Promoter
71.0
71.0
71.0
Dom.Inst
7.1
7.0
6.9
Foreign
7.9
7.8
7.4
Others
13.9
14.1
14.7
To benefit from industry transition
During the last decade, the distribution channel for automotive lubricants (lubes)
witnessed a major transition from the traditional ‘public sector petrol pumps’ to
‘bazzar trade’, which was positive for private sector players such as Castrol, Shell
and Gulf Oil. The distribution channel is now undergoing another transition.
With engine technology advancing and maintenance becoming more
sophisticated, the workshop channel is gaining traction at the cost of other
distribution formats. This is likely to lead to further polarization in the industry
and benefit large lube marketers like Castrol that have strong/established
relationships with original equipment manufacturers (OEMs).
Stock performance (1 year)
Margin/unit to sustain, though volume growth to be muted
Over CY01-11, Castrol’s sales volumes have de-grown, not only due to increasing
drain interval, but also because it has deliberately vacated the price-sensitive
volume-driven market. Castrol depends on technology innovation and path-
breaking new product launches to drive growth and ability to organically generate
growth through internal initiatives is the most sustainable source of growth. We
model Castrol's net sales growth over CY12-21 at 9%. Concerns on account of
increasing drain intervals are largely unfounded, as Castrol has historically
3
Investors are advised to refer
through disclosures made at the end
of the Research Report.
30 July 2012

Castrol India
maintained its margin/unit, which we believe it can sustain. We estimate 2.4%
CAGR in Castrol’s volumes over CY12-14. However, revenue would grow at a CAGR
of 9%, driven by 6% CAGR in realizations. We expect EBIT margin to expand from
19.5% in CY11 to 22.2% in CY14 and estimate net profit CAGR at 17% over CY12-14.
A cash machine for shareholders; Buy
Over CY02-11, Castrol generated FCF of INR27b, with total reinvestment of negative
INR3b. Castrol’s cumulative net capex (capex - depreciation) over the period was a
negative INR408m, while cumulative net working capital (net of cash) was a negative
INR2.5b. It has paid out 87% of its FCF as dividend. Given its predictable and stable
FCFs, low re-investment requirements and consistent payout ratio, we believe DCF
is the best way to value the company.
We initiate coverage with a Buy rating and a
DCF-based target price of INR629, 17% upside.
Industry structure: A differentiated oligopoly market
Differentiated Oligopoly market
Top four players IOC/ HPCL/ BPCL and Castrol
control >80% of the market
Nature of Demand
1. Endogenous demand -
marketing matters
2. Earnings can be
managed by shifting
priorities appropriately
Nature of Firm Interaction
1. High interdependence amongst players
2. Maintaining distance amongst competitors
critical - segmentation matters
3. Oligopolies can retain abnormal profits in the
long run, because barriers to entry prevent
sideline firms from entering market to capture
excess profits.
Potential to Differentiate
1. Differentiation
possible, firms can
shape their own
environment
2. Technology keeps
evolving
3. Minimum efficiency
scale needed
Given the industry structure, Castrol has got its strategy right
Cost Advantage
High Price
Elasticity
Modest price cuts gain considerable share
Margin strategy: Maintain price parity
Product Advantage
Modest hikes lose considerable share
Margin strategy: Maintain price parity
Low Price
Elasticity
Big price cuts gain little share
Margin strategy: Maintain price parity
Big price cuts gain little share
Margin strategy: Charge premium price
Source: MOSL
30 July 2012
4

Castrol India
Has created an enduring and widening moat
High pricing power; less dependent on volume growth
Despite intense competition in the lubricants industry in the last decade, Castrol has been
able to successfully create and appropriate value through adept market segmentation.
Castrol's primary market is premium personal mobility automobiles, where it is able to
leverage its trusted brand, product track record and unique service attributes.
Unlike its competitors that have been making low to negligible investments in their brands,
Castrol has consistently been investing 6-7% of its sales (INR2.2b in CY11) in brand-building.
Over CY01-11, Castrol's sales volumes have declined. However, its realizations have grown
at a CAGR of over 10%, resulting in sales CAGR of 9%.
Enjoys higher than industry average profitability...
Enjoys tremendous
pricing power, with most
of its products
commanding 20-25%
premium
Despite intense competition in the lubricants industry in the last decade, Castrol has
been able to successfully create and appropriate value through adept market
segmentation. Over CY06-10, Castrol has consciously vacated non-profitable price-
sensitive segments such as railways, government agencies, etc, to concentrate on
profitable segments. While this resulted in volume growth being negative over CY05-
11, EBIT margin increased from ~14.5% in CY05 to 20.5% in CY11. The company enjoys
tremendous pricing power, with most of its products commanding 20-25% premium.
Castrol's primary market is the premium personal mobility segment, where it is able
to leverage its trusted brand, product track record and unique service attributes.
...which should sustain, given multiple and rare moats
Has maintained an
average net profit margin
of 12% and an average
RoE of 53%
Over CY01-11, Castrol has maintained an average net profit margin of 12% (lowest:
8.6%; highest: 17.5%) and an average RoE of 53% (lowest: 35%; highest: 94%). It
generated free cash flow (FCF) of INR27b, with total net capex of a negative INR408m.
Castrol has been able to sustain its above average returns by virtue of the multiple
and rare moats it has created. The width of a moat indicates how long a firm's
competitive advantage will last. Most moats a company enjoys turn out to be weak or
transient, leading to the convergence of its profitability with competitors'. Few rare
companies, however, are able to secure enduring and widening moats, enabling them
to avoid this downward spiral. As such companies age, they also become stronger and
more profitable. Castrol is one such company. Its sustained performance over the last
decade highlights the strength of its inimitable model.
Castrol enjoys multiple and rare moats
High
(1) Increasing returns
advantages
Cumulative experience across a learning curve
Ability to invest in a series of actitivities to gain
strategic fit and widen competitive moat
Support from parent BP
Product performance track record and reputation
Quality pre/post sales service
(2) Technology and knowledge
base
(3) Established brand/
Enduring relationships
(4) Ability to create
uniqueness in drastically
different ways
Allows Castrol to operate in the high willingness to
pay/defendable and meaningful subset of the market
Charge 20-25% premium on its products
Leverage on its wide distribution network
Low
Introduce paradigm breaking new product concepts
Compelling advertisement messages
Source: MOSL
30 July 2012
5

Castrol India
Castrol has got its strategy right
Cost Advantage
High Price
Elasticity
Modest price cuts gain
considerable share
Margin strategy:
Maintain price parity
Big price cuts gain
little share
Margin strategy:
Maintain price parity
Product Advantage
Modest hikes lose
considerable share
Margin strategy:
Maintain price parity
Big price cuts gain
little share
Margin strategy:
Charge premium price
Lube price premium
+25%
Castrol
Mobil Esso
0%
PSUs (IOC, HPCL, BPCL)
Gulf / Veedol
Low Price
Elasticity
-10%
Others
Source: MOSL
Expect pricing premium over industry to stabilize at 20-25%
Has managed to create
and sustain a wide gap
between buyers'
willingness to pay (WTP)
and its cost
The industry players can be broadly divided into three categories: (1) low cost public
sector operators like IOC, BPCL and HPCL, with ~70% market share (lower cost due to
integrated model), (2) differentiators like Castrol, Shell and Total, focused on
increasing WTP, and (3) mid-sized/small players lacking competitive advantage - these
players compete with low cost players for market share to sustain minimum economies
of scale. Through its differentiation strategy, Castrol has managed to create and sustain
a wide gap between buyers' willingness to pay (WTP) and its cost.
Player-wise positioning in the lubricants industry
INR
Low Cost
Operator
Industry
Average
Differentiator
Industry Average
WTP
Buyer
Surplus
WTP
WTP
Buyer
Surplus
Buyer
Surplus
WTP
Firm
Surplus
Industry
Average
Cost
Firm
Surplus
Cost
Firm
Surplus
Cost
Cost
IOC/HPCL/BPCL
*WTP - willingness to pay
Others
Castrol/MOBIL
Source: MOSL
Historically, Castrol has enjoyed 20-25% price premium vis-a-vis its competitors.
However, in CY11, Castrol's price premium compared to its key competitors had shot
up to 35-40% in some segments, because the competitors did not immediately follow
up on the sharp price increase (~14%) that Castrol took to offset raw material and
exchange rate (INR/ USD) impact. This resulted in the trade stocking cheaper products,
which led to loss of market share of ~200bp for the company, with the price-sensitive
motorcycle segment being the worst impacted. With IOC taking a sharp 10-12% price
increase in June 2012 and Castrol introducing a one-time INR20/pack discount for the
motorcycle segment, the issue of unsustainable premiums has been resolved.
30 July 2012
6

Castrol India
Consistently investing in brand-building to sustain pricing power
Has consistently been
investing 6-7% of its sales
in brand-building
Castrol's differentiation strategy provides it with tremendous pricing power and high
profit margins. In CY11, its net profit margin was 15.6%, and over CY06-11, its average
net profit margin was 13.4%. Over CY06-11, Castrol's realizations increased at a CAGR
of 12.8%, while its raw material cost, which accounts for ~50% of its sales, increased at
a CAGR of 7.9% (total cost grew at a CAGR of 8.9%). Castrol invests heavily in its brands
to sustain its pricing power. Unlike its competitors that have been making low to
negligible investments in their brands, Castrol has consistently been investing 6-7%
of its sales (INR2.2b in CY11) in brand-building.
Castrol spends heavily on brand building
Adv. Expense
Low price elasticity
Negative correlation of -0.35
Sharp increase in prices results in low volume loss (%)
Source: Company/MOSL
Strategy to maintain competitive edge
Castrol maintains its competitive edge in the bazzar trade by: (1) leveraging its
technological strength and product development capabilities by working closely
with global OEMs, (2) working closely with mechanics, who play a key role in the
final decision making, and (3) by expanding distribution reach in semi-urban and
rural areas, where future growth is anticipated. Castrol has been coherent in the
communication of its value proposition to the consumer. Its key advertisement
plank has been 'Liquid Engineering'.
Castrol's three-pronged strategy
Brand
Globally, Castrol is one of the strongest lube brands
Technology
Customer Relationships
Source: BP Energy Outlook Presentation 2030
30 July 2012
7

Castrol India
Castrol has been coherent in its communication
Few paradigm breaking new product concepts by Castrol
Engine that runs smooth like butter
Engine oil that runs like blood through the
vehicle
An indication of good engine oil is the sound
that the bike makes
Engine is the heart of the vehicle
24 Hour Protection (bikes)
Intelligent Molecules (cars)
5 Times Better Protection (cars)
Elite Team of Engineers (mother brand)
Trizone Technology (bikes)
CRB Turbo Synthetic - Airplane Technology
(trucks)
Source: MOSL
High technological support from parent, BP to continue
Non-OECD/BRIC countries are likely to be the fastest growing markets for lubricants
over CY10-30. Growth is likely to be led primarily by India and China, where vehicle
density per person is still very low. While vehicle per thousand people is expected to
witness marginal to flat growth in developed countries, countries like India and China
are expected to witness increasing vehicle density per person, which augurs well for
lubricant demand. Castrol's parent, BP has identified India as one of the most
promising markets. We expect Castrol to continue receiving high support from BP.
Non-OECD countries to witness fastest growth
Total number of vehicles
Vehicles per thousand people
Growth in lubricant demand (2010-20)
BP's key focus area is premium lubes
Growth in lubricants (2010-20)
Premium lubes as percentage of sales
Relative BP unit margins (x)
Source: BP Energy Outlook Presentation 2030; BP Downstream Presentation
30 July 2012
8

Castrol India
The Indian lubricants industry - a background
Market size:
INR230b in value terms
1.8mt in volume terms
Liberalization effect:
Year Share of PSU pumps
1990
~80% of auto lube
sales
Now
~20% of auto lube
sales
Oil PSUs and Castrol
together control ~80% of
the market
Castrol primarily present
in automotive lubricants
The size of the organized lubricants industry in India is ~INR230b in value terms
and ~1.8mt in volume terms. Volumes have been growing at 3-5% per year, as
the drainage period (longevity) has been continuously increasing. Till 1993, the
lubricants industry was governed under APM (administered price mechanism),
which ensured oil PSUs 12% RoE. Lubricants were auctioned to dealers and
stockists. The business was liberalized in 1993, post which import of base oil was
allowed. The customs duty on base oil was also cut from 85% in FY94 to 5% in
FY08.
Even after liberalization, access to 'retail petrol pumps' (distribution channel)
remains restricted to the oil PSUs. Nonetheless, while in the late 1990s, PSU
petrol pumps accounted for ~80% of auto lube sales, they now account for less
than 20%. The bazzar trade accounts for over 80% of sales and is dominated by
private players such as Castrol, Shell, Tide Water and Gulf Oil.
The oil PSUs have been milking their monopoly strength through petrol pumps.
They have been offering very low dealer discounts to their petrol pump dealers
compared to the dealer margins that private players offer in the bazzar segment.
However, the oil PSUs have now started making a more focused attempt to capture
a larger share of the bazzar trade.
The oil PSUs (IOC, HPCL and BPCL) along with Castrol control ~80% of the market,
with 15 other players competing for the remaining pie. Competition in this
industry is truly international, with almost all major global lube players such as
Total, Shell, Caltex, Elf, Gulf Oil, etc already present in India for almost a decade.
Economies of scale are a key advantage in this industry, which is slowly weeding
out mid-sized players and increasing polarization.
The industry can be broadly divided into Automotive (55% share) and Industrial
& Marine (45% share) lubricants. Automotive lubricants can be further divided
into the OEM and replacement markets. The replacement market can be divided
into retail petrol pumps (~20%) and bazzar trade (~80%). Castrol is primarily present
in automotive lubricants (~86% of revenue) and has an estimated market share
of ~21%.
Region-wise sales break-up of automotive lubes
Lubricants industry break-up
Petrol
30%
Diesel
70%
Broad break-up of automobile industry demand:
diesel engines ~70% and petrol engines 30%. With the
proportion of new generation two-wheelers increasing, the demand for 2T oils is reducing and the demand
for 4T oils is increasing.
Source: Industry/MOSL
30 July 2012
9

Castrol India
Key industry players
Top-4 lubes players volume-wise and value-wise
('000 kl)
(INR b)
The top-4 lubes players in India are IOC, HPCL, BPCL
and Castrol. With the exception of BPCL, they have
witnessed erratic volume growth over FY09-11.
Split of market share within PSU lube sales
Reasonable pricing power allows companies to
increase prices and maintain value growth.
Realizations for top-4 players
(INR/kl)
The three oil PSUs control ~70% of the market. Within
them, market share is distributed as: IOC - 45%, HPCL
- 28% and BPCL - 26% (FY11).
Monopoly control over the 'retail petrol pumps'
distribution channel allows oil PSUs to enjoy very
high margins on the lubes sold through this channel.
Castrol enjoys premium pricing.
Realizations also vary amongst players, depending on
the split between industrial and automotive
lubricants.
Source: Annual Reports of IOC/ HPCL/ BPCL and Castrol
30 July 2012
10

Castrol India
Industry structure: A differentiated oligopoly market
Differentiated Oligopoly market
Top four players IOC/ HPCL/ BPCL and Castrol
control >80% of the market
Nature of Demand
1. Endogenous demand -
marketing matters
2. Earnings can be
managed by shifting
priorities appropriately
Nature of Firm Interaction
1. High interdependence amongst players
2. Maintaining distance amongst competitors
critical - segmentation matters
3. Oligopolies can retain abnormal profits in the
long run, because barriers to entry prevent
sideline firms from entering market to capture
excess profits.
Potential to Differentiate
1. Differentiation
possible, firms can
shape their own
environment
2. Technology keeps
evolving
3. Minimum efficiency
scale needed
Analyzing industry attractiveness through industry competition matrix
Buyer Power - Low
1. Lubricant a small fraction of buyers' maintenance cost, but extremely
critical for longevity of the vehicle
2. Buyers small and fragmented
3. Hence, despite intense competition in the segment, buyer power varies
from moderately high to low across segments (high for a major auto
OEM, low for an individual buyer, small fleet owner)
1.
2.
3.
4.
5.
Entry Barriers - High
Ex post limit to
competition
High minimum economies
of scale needed to
challenge established
players; globally, industry
dominated by few large
players
Access to distribution
Brand identity
Access to complex and
expensive technology
Rivalry amongst Players - Low
Intensity of rivalry is low, despite presence
of numerous players and the fact that
firms sell similar goods, which are
substitutes and thus price sensitive.
Key reasons are (1) fixed cost
investment low (low exit barriers),
(2) ex post limit to competition,
(3) demand endogenous - allowing
market segmentation and
differentiation strategies to work
Substitutes - Low
1. No current perfect
substitute
2. Technology
developments, organic
lubricants a threat
Bargaining Power of Suppliers - Moderate
1. Most global/ local players fully integrated
2. Many competitive suppliers; product is standardized
Source: MOSL
30 July 2012
11

Castrol India
To benefit from industry transition
From 'shops' to 'workshops' - advantage Castrol
During the last decade, the distribution channel for automotive lubricants (lubes) witnessed
a major transition from the traditional 'public sector petrol pumps' to 'bazzar trade',
which was positive for private sector players such as Castrol, Shell and Gulf Oil.
The distribution channel is now undergoing another transition. With engine technology
advancing and maintenance becoming more sophisticated, the workshop channel is gaining
traction at the cost of other distribution formats.
This is likely to lead to further polarization in the industry and benefit large lube marketers
like Castrol that have strong/established relationships with OEMs.
Transition from 'shops' to 'workshops' positive for Castrol
The workshop channel is
gaining traction at the
cost of other distribution
formats
During the last decade, the distribution of automotive lubes witnessed a major
transition from traditional 'public sector petrol pumps' to 'bazzar trade', which was
positive for private players such as Castrol, Shell, Gulf Oil, etc. Another transition is
currently underway - from 'shops' to 'workshops'. With engine technology advancing
and maintenance becoming more sophisticated, the workshop channel (both company
authorized and unorganized) is gaining traction at the cost of other distribution formats.
As a result, we expect the following trends to emerge:
Increase in the share of the organized market
Higher polarization, with market share of the top-4 lubricant marketers (Oil PSUs
and Castrol) increasing at the cost of mid-size and non-niche smaller players
Technological innovation, value-addition, quality, and pre/post-sales service to
become critical
Focus on innovative/premium product offerings leading to richer product mix
Launched a professional
range of products and
service support for key
OEM partners
These trends are positive for Castrol. It can further leverage its premium positioning
and established relationships with key local and global OEMs (original equipment
manufacturers). Anticipating these trends, in CY11, Castrol had launched a professional
range of products and service support for its key OEM partners like Maruti Suzuki, Tata
Motors, Ford, Volkswagen, Skoda, BMW, Audi and Jaguar Land Rover. This is likely to
drive significant volume growth for its premium end of lubricants.
Distribution of automotive lubricants
Automotive Replacement Market
Retail Oil PSUs (18-20% of market)
Bazzar Trade (80-82% of market)
Auto Spare Parts
(50%)
Repair Shops
(9%)
Lube Shops
(21%)
Company Workshops
(9%)
Others
(11%)
Source: Industry/MOSL
30 July 2012
12

Castrol India
Understanding the distribution channel - the lubes market is evolving
Distribution channels
Spare Parts Shop for Autos
Market Share (%)
50
Remarks
Main business auto spare parts, offer
lubricants as side business
Do not stock many varieties
Dedicated lube shops typically carry all
leading brands
Do-it-yourself model but offer mechanic
service for additional cost. Do-it-yourself
model slowly declining
Important channel for older vehicles
High focus on technology and maintaining
efficiencies
Association with top brands brings
credibility for the CAW
ROI on premium products higher for CAW
Prefer companies that offer pre and post
sales service, along with innovative
offerings
Varied usage
Source: Industry/MOSL
Standalone Lubricant Shops
21
Repair Shops
Company Authorized
Workshops (CAW)
9
9
Others
Total
11
100
OEM relationships key to winning in workshop format
Though profit margins are low in the OEM market, strength in this market gives
lubricant companies easier access to the after sales market. According to industry
estimates, the dominant distribution channel for lubricants is the auto spare parts
shop, accounting for ~50% share. However, it is the company authorized workshop,
currently accounting for just 9% share, which is witnessing the strongest growth. This
channel seeks association with strong brands to achieve creditability and values pre/
post sales service from lube companies. Also, the margins for these workshops are
higher in the premium products/brands segment.
Automotive industry break-up
Castrol's automobile lubricant break-up
Almost 75% of the lube demand is derived from CVs
and tractors, largely dominated by diesel engines.
2/ 3 wheelers account for another ~13% of the
market, while 4 wheelers/ MUVs account for ~5% of
the market
Source: Industry/MOSL
30 July 2012
13

Castrol India
Castrol the market leader in bazzar segment
Dominates the
automotive lubricants
market, with 19% share
of the bazzar segment
IOC is the market leader in the overall lubricants industry, with industry sources
estimating its market share at ~40%. However, Castrol dominates the automotive
lubricants market, with 19% share of the bazzar segment, followed by IOC, which has
~14% share of the bazzar segment according to industry estimates. Private players
like Castrol, Shell, Gulf Oil, etc account for ~75% of the bazzar segment while the oil
PSUs account for ~25%.
Industry estimates of Castrol's market share across key
categories in bazzar segment
Player-wise industry estimates of
market share in bazzar segment
Source: Industry/MOSL
Has been coherent in the
communication of its
value proposition to the
consumer
Castrol maintains its competitive edge in the bazzar trade by: (1) leveraging its
technological strength and product development capabilities by working closely with
global OEMs, (2) working closely with mechanics, who play a key role in the final
decision, and (3) by expanding distribution reach in semi-urban and rural areas, where
future growth is anticipated. Castrol has been coherent in the communication of its
value proposition to the consumer. Its key advertisement plank has been 'Liquid
Engineering'.
Focused strategies for various segments
While lubricants constitute a small fraction of maintenance cost, they are critical for
longevity and efficient functioning of vehicles. Hence, demand is endogenous and
brand-pull significant. However, the consumer dynamics and distribution channels
vary considerably across automotive segments. While the involvement of a car owner
in lube purchase is very low, it is very high in case of a two-wheeler or CV owner.
Similarly, the key distribution channel also varies considerably across segments.
Consequently, lube companies need to have focused strategies for various segments.
30 July 2012
14

Castrol India
Understanding the distribution channel - the lubes market is evolving
Vehicle
Trucks/ Tractors
Main Distribution Channel
Petrol Pumps
Company Salesman
Spare Parts Shops
Company
Authorized
Workshops
Retail Petrol Pumps
Mechanics/
Workshops
(Spare Parts Shops &
Distributors)
Mechanics (Distributors)
Spare Parts Shop
Remarks/ Characteristics
High emotional connect to the vehicle
(bread earner)
Meticulous understanding of lubes
and vehicle
Brand pull significant but economy
biggest driver
Very low involvement with purchase
decision
Lubes regarded as mechanics'
domain and left for them to decide
Level of involvement high with regard
to choosing lube oil
Lube experience real
Emotional connect high given first
vehicle purchase, status symbol
Price key determining factor
Unorganized segment key player
Source: Industry/MOSL
Car Owners
2 wheelers
(2 stroke/ 4
stroke)
Agriculture/
Others
Small Shops and
Unconventional Outlets
Understanding the lube oil demand profile for a typical CV
The exhibit below depicts the typical lube oil demand profile for a CV. Players such as
Castrol are able to capture a bigger share of the market within the first five years by
leveraging on their OEM relationships and after sales service agreements. The age
and nature of ownership of a CV determine what quality (and brand) of lube oil will
be used. In India, a CV is typically owned by large fleet operators for the first 4-5
years, after which it moves into the hands of many fragmented users. The share of
the unorganized market is higher for older vehicles.
Product life-cycle of a typical 16-tonne CV
U
S
A
G
E
Through
various
innovative
schemes, OEM
service
workshops,
gaining
incremental
share
Competition
most severe
amongst
organized
players
Organized Market
- Low price
products
- Unorganized
segment
1-3 years
3-6 years
Years
7-10 years
Source: Industry/MOSL
30 July 2012
15

Castrol India
Margin/unit to sustain
Though volume growth to be muted
Over CY01-11, Castrol's sales volumes have de-grown, not only due to increasing drain
interval, but also because it has deliberately vacated the price-sensitive volume-driven
market.
We estimate 2.4% CAGR in Castrol's volumes over CY12-14. However, revenue would
grow at a CAGR of 9%, driven by 6% CAGR in realizations.
We expect EBIT margin to expand from 19.5% in CY11 to 22.2% in CY13 and estimate net
profit CAGR at 17% over CY12-14.
Volumes have declined over CY01-11
Though volumes
declined, net profit
margin expanded from
12% in CY02 to 15.6% in
CY11
Over CY01-11, Castrol's sales volumes have de-grown at a compounded annual rate of
0.8%. However, revenue has grown at a CAGR of 9%, driven by realization CAGR of
10%. The negative volume growth is not only due to increasing drain interval (up from
~18,000km in FY04 to 30,000km for modern 16-tonne CV), but also because Castrol has
deliberately vacated the price-sensitive volume-driven market. Castrol's net profit
margin expanded from 12% in CY02 to 15.6% in CY11. The company has been focusing
on improving its product mix through adept market segmentation and innovative
products. How effectively Castrol is able to continuously improve its product mix by
consistently expanding the premium end of the market and through paradigm-
breaking new product concepts is a key factor to watch.
Revenue and realization growth over CY00-11 (%)
Volume growth over CY00-11 (%)
Source: Company/MOSL
Management growth outlook for key segments
The management has guided for auto lube volume growth of 2-2.5% over the next 3-
5 years. Castrol's auto lube sales break-up: diesel engine oils (mostly CVs) 40%,
2-wheelers 20%, passenger cars 15% and OEM/ Construction/ Brake oil, etc 25%. The
management expects the 2-wheeler segment to double in volume terms in the next
3-4 years, while the other segments will likely post marginal growth rates. The
management expects growth in the industrial segment to be marginally stronger
than in the auto segment.
30 July 2012
16

Castrol India
Management growth outlook
Company growth outlook over
% CY12-15
40 Expects very low to marginal
growth
2-Wheelers
20 Expects volumes to double in
3-4 years
Passenger Cars
15 Expects 1% odd growth
OE/ Const/ Others
25 Marginal growth
Total
100 2-2.5% growth
Source: Conference Call post 3QCY11 results
Castrol auto volume
break-up
Diesel Engine Oils
Automobiles: Segment-wise sales break-up
Source: Company/MOSL
Expect volumes to grow at a CAGR of 2.4% over CY12-14
We expect volume growth for lubricants industry to remain muted, given technological
advancements and increasing drain intervals. We estimate 2.4% CAGR in Castrol's
volumes over CY12-14.
Raw material cost assumptions
2008
Base Oil
Volumes ('000 tons)
% Change
Value (INR m)
% Change
Per Unit (INR/kl)
% Change
% of lube sales
Additives/ Chemicals
Volumes ('000 tons)
% Change
Value (INR m)
% Change
Per Unit (INR/kl)
% Change
% of lube sales
Total Raw Material Cost (INR m)
Base Oil (%)
Additives (%)
Others (%)
% of sales
182,293
-6
8,880
28
48.7
36
41
32,494
-3.6
3,153
8
97
12
15
13,125
68
24
8
58
2009
176,838
-3
6,477
-27
36.6
-25
29
32,429
-0.2
3,363
7
104
7
15
11,238
58
30
12
47
2010
187,463
6
8,624
33
46.0
26
32
31,825
-1.9
3,554
6
112
8
13
13,847
62
26
12
49
2011
168,911
-10
10,433
21
61.8
34
37
30,076
-5.5
3,959
11
132
18
14
16,945
62
23
15
55
2012E
174,637
3.4
11,757
13
67
9.0
39
30,613
1.8
4,392
11
143
9.0
15
18,820
62
23
14
57
2013E
178,828
2.4
11,859
1
66
-1.5
37
2014E
183,299
2.5
12,787
8
70
5.2
36
31,347
32,131
2.4
2.5
4,430
4,777
1
8
141
149
-1.5
5.2
14
14
19,166
20,711
62
62
23
23
15
15
54
54
Source: Company/MOSL
30 July 2012
17

Castrol India
High sensitivity to volume and realization assumptions
Castrol has high sensitivity to volume and realization assumptions. We have assumed
volume/realization CAGR of 2.4%/ 6% over CY12-14, implying revenue growth of ~9%.
Our volume and realization assumptions over CY12-21 are 2.6% and 7%, respectively.
Over CY01-11, Castrol has reported volume and realization CAGR of -1% and 10%,
respectively. Negative volume growth over CY01-11 was primarily due to Castrol
vacating the price-driven volume market. BP estimates (BP Refining and Marketing
Presentation) BRIC countries to be the largest lubricant market by 2020, given low
vehicle penetration. Furthermore, within the lubricant industry, BP expects premium
lubricants to grow at a faster rate compared to normal lubricants. Consequently, we
believe our assumption of 2.6% volume growth for Castrol is conservative and has
potential for upside surprise.
Sensitivity of net profit and DCF (value/share) to volume growth and realization growth
Change
(+/-)
Volumes
Base (%)
Optimistic (%)
+1
Pessimistic (%)
-1
PAT (INR b)
Optimistic (INR b)
+1%
% Change
Pessimistic (INR b)
-1%
% Change
Realization
Base (%)
Optimistic (%)
+1
Pessimistic (%)
-1
PAT (INR b)
Optimistic (INR b)
+1%
% Change
Pessimistic (INR b)
-1%
% Change
Both Volume and Realization
Base (%)
Optimistic (%)
+1
Pessimistic (%)
-1
PAT (INR b)
Optimistic (INR b)
+1%
% Change
Pessimistic ((INR b)
-1%
% Change
Raw Material
Base (%)
Optimistic (%)
-1
Pessimistic (%)
+1
PAT (INR b)
Pessimistic (INR b)
+1%
% Change
Optimistic (INR b)
-1%
% Change
2012E
2.1
3.1
1.1
4.6
0.8
4.5
-0.8
4.7
5.7
3.7
4.7
3.2
4.4
-3.2
6.8
9.0
4.8
4.7
4.0
4.4
-3.9
9.0
8.0
10.0
4.5
-2.4
4.7
2.4
2013E
2.4
3.4
1.4
5.7
1.7
5.5
-1.7
5.2
6.2
4.2
5.9
5.8
5.3
-5.7
6.7
9.8
5.7
6.0
7.6
5.2
-7.3
-1.5
-2.5
-0.5
5.4
-4.2
5.9
4.2
2014E
2.5
3.5
1.5
6.5
2.6
6.1
-2.6
6.7
7.7
5.7
6.8
8.7
5.8
-8.6
8.3
11.5
7.3
7.0
11.6
5.6
-10.9
5.2
4.2
6.2
5.9
-6.2
6.7
6.1
2015E
2.7
3.7
1.7
7.3
3.6
6.8
-3.5
6.9
7.9
5.9
7.9
11.6
6.3
-11.3
8.8
11.9
7.7
8.2
15.7
6.0
-14.4
5.2
4.2
6.2
6.5
-8.2
7.6
8.0
2016E
2.7
3.7
1.7
8.3
4.7
7.5
-4.6
6.9
7.9
5.9
9.1
14.6
6.8
-14.1
8.7
11.9
7.7
9.5
20.1
6.5
-18.0
5.2
4.2
6.2
7.1
-10.2
8.7
9.8
2017E
2.7
3.7
1.7
9.4
5.9
8.4
-5.6
6.9
7.9
5.9
10.4
17.6
7.4
-16.8
8.7
11.9
7.7
11.1
24.5
7.0
-21.6
5.2
4.2
6.2
7.8
-12.1
9.9
11.5
2018E
2.7
3.7
1.7
10.7
7.2
9.3
-6.8
6.9
7.9
5.9
12.0
20.6
8.0
-19.6
8.7
11.9
7.7
12.9
29.2
7.5
-25.1
5.2
4.2
6.2
8.9
-14.0
11.3
13.2
2019E
2.6
3.6
1.6
12.2
8.4
10.3
-7.9
6.9
7.9
5.9
13.9
23.6
8.7
-22.2
8.7
11.9
7.7
15.0
33.9
8.0
-28.6
5.2
4.2
6.2
9.4
-15.8
12.9
14.8
2020E
2.6
3.6
1.6
13.9
9.8
11.5
-9.1
7.0
8.0
6.0
15.9
26.6
9.5
-24.8
8.7
11.8
7.6
17.5
38.7
8.6
-32.0
5.3
4.3
6.3
10.4
-17.5
14.7
16.3
2021E
2.5
3.5
1.5
15.7
11.2
12.7
-10.3
7.0
8.0
6.0
18.3
29.7
10.3
-27.5
8.7
11.8
7.6
20.3
43.7
9.1
-35.4
5.3
4.3
6.3
11.4
-19.2
16.6
17.8
CAGR
2.6
3.6
1.6
14.6%
12.1%
680
8.1
582
-7.5
DCF
Value
6.7
7.7
5.7
16.3%
9.8%
699
11.1
564
-10.3
9.48
11.58
7.4
17.5%
8.5%
756
20.2
522
-17.0
4.5
3.6
5.5
608
-3.3
650
3.3
Source: MOSL
18
30 July 2012

Castrol India
Decline in raw material prices could boost margins
Historically, base oil prices have closely followed crude oil prices, with correlation at
0.93x. In the last three months, crude oil prices have declined by 18% in USD terms,
which bodes well for Castrol. The exhibit below depicts Castrol's spread between
lube oil realizations and base oil prices.
Spread between Castrol's base oil and lube oil prices
Base oil prices follow crude prices with a lag (INR/bbl)
Crude oil
Correlation of 0.83x
Correlation of 0.93x
Base oil
Source: Bloomberg/MOSL
CY09 and CY10 were very strong years for Castrol; it retained the price increase it had
taken on the back of higher raw material prices even after the prices declined. Also,
Castrol has already taken marginal price increases in CY12 to cover itself for the sharp
rupee depreciation and increase in base oil prices. Even if base oil prices decline from
current levels, Castrol might retain its enhanced product prices. We model ~11%
increase in Castrol's blended base oil cost in CY12. Castrol imports ~40% of its raw
material requirements.
Given high pricing power,
price clycity is positive
Raw material cost accounts for 50-55% of Castrol's sales. Most of its raw materials are
crude based and hence very volatile. Nonetheless, given Castrol's high pricing power,
we have summarized the impact on Castrol based on various scenarios. While a secular
upturn in prices is bearish and a secular downturn is bullish for Castrol. Contrary to
popular belief, price cyclicity is positive for Castrol, given its high pricing power.
Scenario outlook for raw material
Scenario
Secular Increase in Base oil prices
Outlook
Bearish
Comments
Likely to impact demand, lead to down
trading and increase use of alternate or
substitutes (CY06)
Most positive scenario as it would boost
demand, while companies like Castrol
can apportion some part of the decline
and increase margins
Bearish as ability to make major price
changes limited
Positive as a company like Castrol
due to its pricing power can pass on price
increases, while apportioning part of
savings when prices fall (CY09-10)
Source: MOSL
19
Secular Fall in Base Oil Prices
Bullish
Stagnant Base Oil Prices
Cyclical Base Oil prices
Moderate
Bearish
Moderate
Bullish
30 July 2012

Castrol India
Has maintained net margin per unit, negating increasing drain intervals
Over the last decade, the lubricants industry has been witnessing significant
technological advancement and increasing use of semi-synthetic products, which has
steadily increased drain intervals (longevity). For instance, the average drain interval
for a typical 16-tonne CV, which was ~8,000km in CY03, stood at ~18,000km in CY11,
implying a CAGR of 10.7%. As a result, the lubricants industry has grown at just 3-4%
during the last decade. Though Castrol has witnessed a volume decline during the
period, it has managed to maintain its net margin per unit.
Castrol's net spread (margin/kl, INR)
Net margins spread
CY (Year)
Net Lubricant
Spread (Margin/ Kl)
Drain adjusted
Spread/ Kl
Drain interval
Adjusting for the
drain Impact
CAGR Growth
2003
26
26
8,000
1.00
2004
26
23
9,250
1.16
2005
29
25
9,458
1.18
2006
29
24
2007
40
31
2008
45
33
2009
62
40
2010
65
31
2011
62
9,750 10,188 10,917 12,375 16,750
18,000
1.22
1.27
1.36
1.55
2.09
2.25
10.7%
We have assumed a CAGR growth of ~8% for drain interval over CY12-15 and modeled
Castrol to negate the impact of increasing drain intervals and maintain its Margin/
Unit over FY12-15.
Net margins spread
CY (Year)
Net Lubricant Spread (Margin/ Kl)
Drain adjusted Spread/ Kl
Drain interval
Adjusting for the drain Impact
CAGR Growth (%)
2011
62
18,000
2.25
10.7
2012E
62
57.7
19,440
1.1
8.0
2013E
71
60.9
20,995
1.2
8.0
2014E
77
61.5
22,675
1.3
8.0
2015E
84
61.4
24,489
1.4
8.0
Source: MOSL
30 July 2012
20

Castrol India
Expect Castrol to maintain margin at ~INR60/kl over CY12-15
Source: MOSL
Volume decline (YoY) arrested in 2QCY12
Registered 4.8% YoY
volume growth in
2QCY12
Castrol registered four consecutive quarters of YoY volume decline, over 2QCY11-
1QCY12. This was on the back of Castrol undertaking price increase of ~14% in CY11 to
negate the impact of raw material price increases. Traditionally, Castrol has been the
price decider in the domestic lubricant market, with competitors following its
footsteps. However, in CY11, its key competitors did not follow up with price increases
immediately, which resulted in Castrol's premium over its competitors increasing
from the historical range of 20-25% to 35-40% for a period of about six months. This
resulted in Castrol losing 2-3% market share, with the 2-wheeler segment getting
most adversely impacted. This anomaly got corrected in June 2012, with market leader
IOC taking a 10-12% price hike and Castrol launching a promotional discount scheme
of INR20/pack for its 2-wheeler lubricants. As a result, Castrol's volume growth was
arrested in 2QCY12, with the company registering a 4.8% volume growth.
Castrol's OoQ volumes are cyclical (MT)
Castrol's YoY change in volumes (%)
Source: Company/MOSL
30 July 2012
21

Castrol India
Market to witness addition of 16m premium vehicles over FY13-15
The overall automobile lubricant market is likely to witness addition of ~76m vehicles,
over FY13-15. Nevertheless, the premium personal mobility segment, which is Castrol's
focus area is likely to grow at a faster pace. The premium mobility segment, comprising
of cars (A3 and above) and 4-stroke 2-wheelers (>125cc), is expected to report a
cumulative CAGR of 19% over FY11-15 and witness new additions of ~15.6m vehicles.
With increasing sales of premium vehicles, the overall market for premium products
is set to expand meaningfully over the next 3-5 years. This should be a key positive
for Castrol, as it is clearly focused on this particular segment and best placed to
leverage this opportunity.
Auto industry growth outlook
'000 units
CV
PC+UVs+MPVs
Three Wheelers
Two Wheelers
Total
Product Mix (%)
CV
PC+UVs+MPVs
Three Wheelers
Two Wheelers
Total
Cumulative Market*
Total CV
Old Generation
New Generation
PC+UVs+MPVs
Three Wheelers
Two Wheelers
Total
% growth
% of 2 Wheelers
FY11
757
2,946
796
13,272
17,772
4
17
4
75
100
4,206
2,872
1,334
15,653
4,599
77,963
102,421
76
FY12
901
3,126
876
15,381
20,284
4
15
4
76
100
4,949
3,290
1,658
18,057
5,259
88,993
117,258
14
76
FY13E
998
3,438
920
16,919
22,276
4
15
4
76
100
5,744
3,845
1,899
20,716
5,904
100,852
133,217
14
76
FY14E
1,124
3,954
989
19,288
25,355
4
16
4
76
100
6,591
4,469
2,123
23,641
6,557
114,519
151,307
14
76
FY15E
1,279
4,547
1,038
21,988
28,853
4
16
4
76
100
7,523
5,119
2,404
26,960
7,221
129,933
171,637
13
76
Value added sales in personal mobility market
Cars above A3 segment
462
545
2W >125cc
3,092
3,574
Total
3,773
4,350
% Change
36
15
600
3,932
4,787
10
690
4,482
5,460
14
793
5,110
6,231
14
Cumulative value added sales in personal mobility market#
Cars above A3 segment 2,647
3,072
3,543
4,042
4,596
2W >125cc
13,920
17,494
21,139
25,139
29,729
Total
17,815
21,757
25,934
30,685
35,683
% Change
22
19
18
16
*We have considered life of vehicles as 10 years
Source: SIAM/MOSL
# We have considered passenger cars (A3 segment and above) and 2-wheelers (>125cc) as
premium personal mobility market.
30 July 2012
22

Castrol India
Typical usage of lube oil across vehicles
Lubricant usage is the highest in CVs (~93 liters per year for old generation CVs; ~48
liters per year for new generation CVs). Passenger cars require ~10 liters, while
two-wheelers require just ~4 liters a year. In case of two-wheelers, the lube oil is
typically changed ~5 times a year, given that the slump size of a motorcycle is only
one liter. Also, a high proportion of two-wheeler owners change lube oil on their
own. This could be the key reason for the high involvement of two-wheeler owners
in the purchase of lube oil.
Lube usage across vehicles in urban and semi urban areas
Drain Intervals
(Km)
15,000
30,000
5,000
2,100
Aprrox Slump
Size (Ltrs.)
20
15
4
0.9
Average Annual
Usage (Ltrs.)
93
48
10
4
Average Annual
Usage Times (x)
4.7
3.2
2.4
4.8
Usage
Per Year (Km)
70,000
95,000
12,000
10,000
Source: Industy/MOSL
Old Gen. CV
New Gen. CV
Cars
2 Wh. (4 St)
Product mix of vehicles
Total premium personal mobility vehicles ('000)
Average annual usage (KL)
Average annual usage times (x)
Drain intervals (KL)
Source: Industry/MOSL
30 July 2012
23

Castrol India
EBIT margins to improve from CY13
Expect EBIT margin to
improve from 18.6% in
CY12 to 22.2% in CY14
Castrol's EBIT margins have been under pressure in CY11 and 1HCY12, given pressure
from raw material and INR/USD. In CY11, base oil prices were impacted by external
issues such as trouble in the Middle East, fire outage at Formosa and national oil
companies taking shutdown. With crude prices under pressure (down 18% from its
CY12 peak), INR/USD expected to stabilize (our INR/ USD assumption for FY13 is 53.5)
and some other external issues getting resolved, we expect base oil prices to be
under pressure and model base oil prices at INR66/Kl (down 1.5%). This coupled with
realization improvement (4.7%/ 5.2% for CY12/ CY13) would boost CY13 margins by
308bp. We have modelled a 4.5% CAGR for raw material cost and 6.7% CAGR for per
unit realization over CY12-21. Realization improvement would be primarily driven by
new innovative product launches, improved product mix given move towards more
premium/ synthetic lubricants and technological advances. We have modeled Castrol's
EBIT margin to improve from 18.6% in CY12 to 22.2% in CY14.
EBIT movement over CY04-14 (INR m)
E
E
E
Source: Company/MOSL
Total cost break-up (%)
Source: Company/MOSL
30 July 2012
24

Castrol India
Expect advertisement and discount cost to remain at ~10% of sales
Source: Company/MOSL
Expect revenue CAGR of 9%, net profit CAGR of 17% over CY12-14
We expect Castrol to post revenue CAGR of 9% and net profit CAGR of 17% over CY12-
14. Revenue growth would be driven by 2.4% volume growth and 5.9% realization
growth. We expect EBIT margin to expand from 19.5% in CY11 to 22.2% in CY13 on the
back of lower raw material cost (55% of sales in CY11 to 52.9% in CY13), in turn driven
by declining base oil prices.
Revenue and net profit CAGR over CY11-14
Source: Company/MOSL
Castrol's FCF and payout over CY05-14
Castrol's RoE and RoCE over CY05-14
Source: Company/MOSL
30 July 2012
25

Castrol India
A cash machine for shareholders
FCF of INR27b over CY02-11; 87% paid out as dividend
Over CY02-11, Castrol generated FCF of INR26.8b, with total reinvestment of negative
INR3b.
Castrol's cumulative net capex (capex - depreciation) over the period was a negative
INR408m, while cumulative net working capital (net of cash) was a negative INR2.5b.
It has paid out 87% of its FCF as dividend.
FCF of INR27b over CY02-11; 87% paid out as dividend
Castrol has been a cash machine for its investors. Over CY02-11, it has generated free
cash flow (FCF) of INR27b, with total reinvestment of negative INR3b. Castrol's
cumulative net capex (capex - depreciation) over the period was a negative INR408m,
while cumulative net working capital (net cash) was a negative INR2.5b. Furthermore,
it has paid out 87% of its FCF as dividend, allowing shareholders to redeploy the cash
in other opportunities. Castrol has been able to achieve this performance by virtue of
its inimitable business model and by commanding very favorable terms of trade.
Summary of FCF over CY02 to CY11 (INR m)
Revenues
% Change
Net Profit
% Change
EBIT
% of Sales
% Change
EBIT(1-t)
Less: Total Re-investment
Depreciation
Capex
Net Capex (Capex- Dep.)
Change in WC
FCFF
Dividend Payout (with Tax)
% of PAT
% of FCF
Computed Variables
Total Capital Invested
Reinvestment
ROIC
2002
11,751
1,409
2,375
20.2
1,571
-1,818
134
116
-18
-1,800
3,389
2,238
159
66
1,440
2003
12,075
3
1,253
-11
2,067
17.1
-13
1,367
1,504
143
27
-116
1,620
-137
1,151
92
-842
2,944
1,504
46
2004
13,477
12
1,154
-8
1,980
14.7
-4
1,310
-354
249
36
-212
-142
1,664
1,155
100
69
2,590
-354
51
2005
14,645
9
1,348
17
2,135
14.6
8
1,412
341
189
75
-114
456
1,071
1,163
86
109
2,931
341
48
2006
18,025
23
1,545
15
2,018
11.2
-5
1,335
381
180
94
-86
468
953
1,269
82
133
3,312
381
40
2007
19,660
9
2,184
41
3,074
15.6
52
2,033
-2,186
208
244
36
-2,222
4,219
2,044
94
48
1,126
-2,186
181
2008
22,624
15
2,624
20
3,739
16.5
22
2,473
1,191
257
369
112
1,079
1,282
2,170
83
169
2,318
1,191
107
2009
23,906
6
3,811
45
5,480
22.9
47
3,625
-2,613
272
202
-70
-2,543
6,238
3,616
95
58
-295
-2,613
-
2010
28,020
17
4,903
29
7,006
25.0
28
4,634
-370
243
238
-6
-364
5,003
4,325
88
86
2011
30,821
10
4,810
-2
6,331
20.5
-10
4,187
1,018
251
318
67
952
3,169
4,311
90
136
Total
195,003
36,206
18.6
23,947
-2,905
2,126
1,718
-408
-2,496
26,852
23,441
94
87
-665
353
-370
1,018
-
1,186
Source: Company/MOSL
Expect FCF to remain robust over CY12-21, as well
We expect Castrol to repeat this performance over CY12-21, given that (a) industry
structure has become more conducive for large marketers like Castrol, (b) opportunity
size and growth is higher, and (3) its increasing returns advantage moat will allow it to
emerge stronger and bigger.
30 July 2012
26

Castrol India
Summary of FCF over CY12 to CY21 (INR m)
Base Year
Revenues
32,865
Net Profit
4,853
EBIT
6,106
EBIT(1-t)
4,189
- Reinvestment
1,018
Depreciation
251
Capex
318
Net Capex (Capex- Dep.) 67
Change in WC
952
FCFF
3,170
Capital Employed
6,042
New Investments
ROC
Dividend Payout (with Tax)
% of PAT
% of FCF
2012E
35,353
4,559
7,657
4,039
-226
301
300
-2
-224
4,266
5,816
-226
69%
4,325
95
101
2013E
38,579
5,612
8,580
5,066
-199
331
350
19
-218
5,265
5,617
-199
90%
5,046
90
96
2014E
42,256
6,283
9,690
5,677
-293
362
370
8
-301
5,970
5,324
-293
107%
5,767
92
97
2015E
46,280
7,044
10,894
6,411
-243
394
390
-4
-239
6,654
5,081
-243
126%
6,487
92
98
2016E
50,691
7,901
12,248
7,208
-150
430
435
5
-156
7,358
4,930
-150
146%
7,064
89
96
2017E
55,524
8,877
13,765
8,103
-319
468
460
-8
-311
8,422
4,611
-319
176%
7,929
89
94
2018E
60,819
9,966
15,476
9,107
-314
511
525
14
-328
9,421
4,297
-314
212%
8,938
90
95
2019E
66,613
11,201
17,467
10,239
-242
559
585
26
-268
10,481
4,056
-242
252%
9,803
88
94
2020E
72,929
12,624
19,540
11,556
-21
610
625
15
-36
11,578
4,034
-21
286%
10,956
87
95
2021E
Total
78,799 547,842
14,128 88,196
18,439 133,757
12,928 12,199
-412
-2,420
668
4,634
700
4,740
32
106
-444
-2,526
13,339
9,780
3,622
-412
357%
12,398
88
93
Source: MOSL
Key trigger for Castrol
will be higher than
expected volume growth,
without compromising
much on margins
Our assumptions for both volumes and realizations are conservative. We have
assumed that (1) growth in lubes industry volumes would be low at 2.6%, given
continuous technological advancement, (2) Castrol's relative market share will improve
by just ~2%, and (3) the retail petrol pump distribution channel, which we believe
will account for 12-20% of the market over the period, will remain out of reach for the
private sector players. We believe the key trigger for Castrol will be higher than
expected volume growth, without compromising much on margins. When
accompanied by high growth, companies that enjoy high cash flows, low risks and
require little capital command very high valuation multiples.
30 July 2012
27

Castrol India
Buy with a DCF-based target price of INR629, 17% upside
Huge free cash flows; valuations reasonable
Castrol provides a vehicle to invest in a company with multiple and rare moats, huge free
cash flow generation capability, high governance standards and reasonable valuations.
We expect Castrol to post earnings CAGR of 17% and FCF CAGR of 18% over CY12-14.
We initiate coverage with a Buy rating and a DCF-based target price of INR629, 17%
upside.
Expect Castrol to post
earnings CAGR of 17%
and FCF CAGR of 18%
over CY12-14
We expect Castrol to post earnings CAGR of 17% and FCF CAGR of 18% over CY12-14.
We have valued Castrol using (a) DCF methodology, and (b) intrinsic P/E and P/B
multiple. Given that Castrol is a tremendous FCF generator, has stable cash flows,
requires very low capex, and maintains a high payout ratio, we believe the most
appropriate way to value Castrol is through DCF. We recommend Buy with a DCF-
based target price of INR629. Our key assumptions are tabulated below.
Key assumptions
Valuation Inputs
Growth Period
Risk free Rate (Rf)
Levered Raw Beta (B)
Market Risk Premium (Rmp)
Cost of Equity: Rf+B(Rmp)
Stable Period
Risk free Rate (Rf)
Levered Raw Beta (B)
Market Risk Premium (Rmp)
Cost of Equity: Rf+B(Rmp)
India country Default Spread
Adjusted Risk free Rate (Rf)
Terminal Growth rate (Tg)
(%)
8.1
0.405
7.4
11.0
8.1
0.38
7.4
10.9
2.0
6.05
6.05
Comments
RBI 10 year G-sec Bond Yield
Bloomberg 1 year average Raw Regression Beta
Implied India Risk Premium based on Sensex
RBI 10 year G-sec Bond Yield
Bloomberg 10 year average Raw Regression Beta
Implied India Risk Premium based on Sensex
Bases on S&P Bond Default spread of 2% based on India's
BBB+ rating
Real Risk free rate in India
Real Risk free rate in India (Rf minus Country Default Risk)
Source: MOSL
Valuation summary
Method
Target Price (INR)
DCF CY13
629
Intrinsic PE and PB multiples CY13#
631
Upside (%)
17
18
Source: MOSL
30 July 2012
28

Castrol India
DCF valuation at INR629/share
We believe DCF is the best way to capture the intrinsic value of Castrol, given its
stable cash flow, stable growth profile and low capex requirement. We have done a
two-stage DCF valuation for Castrol. We have assumed revenue CAGR of 9% and net
profit CAGR of 12% over CY12-21. Our terminal growth rate assumption is the real risk-
free rate of return in India, which is calculated as the 10-year risk-free rate minus S&P
default spread for India, which is currently at 2%. Using the DCF methodology, we
arrive at a value of INR629/share.
DCF calculations (INR m)
Base
2011 2012E
2013E
7.6
35,353
21.7
7,657
2,591
5,066
331
350
-218
5,265
2014E
9.1
38,579
22.2
8,580
2,904
5,677
362
370
-301
5,970
2015E
9.5
42,256
22.9
9,690
3,279
6,411
394
390
-239
6,654
2016E
9.5
46,280
23.5
10,894
3,687
7,208
430
435
-156
7,358
2017E
9.53
50,691
24.2
12,248
4,145
8,103
468
460
-311
8,422
2018E
9.53
55,524
24.8
13,765
4,658
9,107
511
525
-328
9,421
2019E
9.54
60,819
25.4
15,476
5,237
10,239
559
585
-268
10,481
2020E
9.53
66,613
26.2
17,467
5,911
11,556
610
625
-36
11,578
Terminal
2021E
Year
9.48
72,929
26.8
19,540
6,612
12,928
668
700
-444
13,339
8.1
78,799
23.4
18,439
6,240
12,199
688
756
-236
12,368
258,036
33.8
10.8
Revenue Growth (%)
10
6.6
Revenues
30,821 32,865
EBIT Margin (%)
20.5
18.6
EBIT
6,331 6,106
Taxes
2,142 2,066
EBIT(1-t)
4,189 4,039
+ Depreciation
251
301
- Capital Expenditures 318
300
- Chg WC
952
-224
FCFF
3,170 4,266
Terminal Value
Cost of Capital Calculations
Tax Rate (%)
33.8
33.8
Cost of Equity (%)
11.0
11.0
Computed Variables
Total Capital Invested 6,276 6,050
Reinvestment Rate
0.24 -0.06
Return on Capital (%)
97.3
Present Value Calculations
Cumulative WACC
1.00
Present Value of FCFF
4,266
Present Value of Terminal Value
33.8
11.0
5,851
-0.04
126.6
1.11
4,743
33.8
11.0
5,558
-0.05
146.6
1.23
4,844
33.8
11.0
5,315
-0.04
174.3
1.37
4,863
33.8
11.0
5,165
-0.02
205.0
1.52
4,845
33.8
11.0
4,846
-0.02
237.2
1.69
4,996
33.8
11.0
4,531
-0.02
284.1
1.87
5,034
33.8
11.0
4,290
-0.02
341.5
2.08
5,044
33.8
11.0
4,268
-0.02
407.2
2.31
5,020
33.8
11.0
3,857
-0.02
457.8
2.56
5,210
100,774
Source: MOSL
Valuation
PV of FCFF during high growth phase =
PV of Terminal Value =
Value of Operating Assets of the firm =
Value of Cash & Non-operating assets=
Value of Firm =
- Value of Outstanding Debt =
Value of Equity =
Value of Equity in Common Stock =
Value of Equity per share =
Upside (%)
48,864
100,774
149,638
5,950
155,588
0
155,588
155,588
629
17.4%
Source: MOSL
30 July 2012
29

Castrol India
Sensitivity analysis
Terminal Growth and Cost of Equity (COE)
9%
636
719
846
10%
596
672
789
COE (%)
11%
559
629
737
12%
525
590
689
13%
493
553
645
Source: MOSL
Terminal
Growth
5.05%
6.05%
7.05%
Sensitivity of DCF (value/share) to terminal growth rate
DCF (value/sh)
-1.5%
-1%
-0.5%
Base case
+0.5%
+1%
+1.5%
Source: MOSL
Growth beta and terminal growth
4.05
559
533
509
487
466
Terminal Growth Rate (%)
5.05
6.05
7.05
615
694
815
586
661
775
559
629
737
534
600
701
510
572
668
8.05
1023
970
921
875
831
Growth
Beta
0.20
0.30
0.40
0.50
0.60
Stable period beta and terminal growth
4.05
544
509
481
458
Terminal Growth Rate (%)
5.05
6.05
608
703
559
629
521
575
491
534
7.05
860
737
653
593
Source: MOSL
Stable Period
Beta
0.28
0.38
0.48
0.58
Sensitivity of volume growth to DCF (value/share)
(value/sh)
Sensitivity of realization growth to DCF (value/share)
(value/sh)
-1.5%
-1%
-0.5% Base case +0.5%
+1%
+1.5%
-1%
-1%
-1% Base case +1%
+1%
+1%
Source: MOSL
30 July 2012
30

Castrol India
Intrinsic P/E based valuation at INR631/share
Given its cash flow, growth and margin attributes, we have calculated the intrinsic
P/E multiple for Castrol. Relative valuation comparisons fail to adjust the variance in
cash flow (FCF), risk (beta), growth profile (reinvestment needs) and returns (RoE) in
different stocks. Intrinsic multiple calculations, however, incorporate the various
characteristics that determine the value of a firm.
Based on our intrinsic P/E calculation, Castrol should tarde at a P/E multiple of 27.8x
v/s the current 23.6x CY13E EPS. The intrinsic P/E of 27.8x implies a value of INR631/
share (based on CY13 estimates). Our expected RoE for Castrol in the growth period is
63%, while our expected RoE in the stable/terminal period is 40%.
Intrinsic P/E calculation for Castrol
Intrinsic PE Multiple
Current Inputs
Current Earnings (INR m)
Book value of equity (INR m)
Revenues (INR m)
Growth Period
Length of growth period (Years)
Growth rate during period (g)
Payout ratio during period (%)
Cost of Equity during period (%)
Stable/ Terminal Growth Period
Growth rate in steady state (%)
Payout ratio in steady state (%)
Cost of Equity in steady state (%)
Price/Earnings Ratio
Target Price (Based on CY13E EPS)
Current Price
% Upside
Cost of Equity: Growth Period
Rf
Rmp
Beta
COE
4,559
6,276
33,672
10
11.38%
82
11.01
6.05
85
10.84
27.8
631
536
18
ROE =
73%
Expected ROE =
63%
Expected ROE =
40%
8.1%
7.4%
0.40
11.0%
Cost of Equity: Stable Period
Rf
Rmp
Beta
COE
8.1%
7.4%
0.38
10.8%
Footnote:
The intrinsic P/E of a company can be stated as "Payout Ratio * (1 + Growth Rate) / (Cost of Equity - Growth Rate)". Here,
the growth rate (G) can be further divided into growth during high growth period and growth during stable/terminal period. P/
E for a stock is a derivative of the RoE a company makes in its current business (value in place), RoE it expects to make in its
future investments (value for growth) and the RoE we expect the company to make in its stable/terminal period. The reinvestment
in growth and stable period is calculated as (1- Payout Ratio).
30 July 2012
31

Castrol India
Comparative valuations
CMP
Asian Paints
Colgate
HUL
ITC
Nestle India*
Castrol India*
* CY year end
3,564
1,166
476
251
4,453
536
M Cap
(USD b)
6.0
2.8
17.9
35.5
7.6
2.3
EPS Gr. (%)
FY13 FY14
17.7 17.9
11.9 13.2
25.2 15.3
16.4 17.8
16.5 20.4
23.4 11.9
P/E
FY13
29.4
31.2
31.9
27.0
36.2
23.6
(x)
FY14
24.9
27.6
27.7
22.9
30.0
21.1
P/BV (x)
FY13 FY14
10.2
8.4
30.7 25.5
22.7 17.6
8.7
7.4
23.7 18.5
19.4 18.0
EV/EBIDTA
RoE (%)
RoCE (%) Pay. Ratio
FY13 FY14 FY13 FY14 FY13 FY14
FY12
17.7 13.9 34.7 33.8 46.6 45.6
38.8
22.5 19.3 108.1 101.0 108.5 101.3
78.0
25.1 21.6 71.2 63.7 93.3 83.8
63.0
17.5 14.7 32.3 32.2 45.4 45.7
52.7
23.3 18.7 77.0 69.1 64.9 66.5
53.3
15.6 13.9 74.0 85.6 99.1 116.7
89.9
Source: Bloomberg/MOSL
Castrol India: Historical P/E
Castrol India: Historical P/B
Castrol India: Historical EV/ sales
Castrol India: Historical EV/EBITDA
Source: Bloomberg/MOSL
30 July 2012
32

Castrol India
Key concerns
Longer oil drain intervals:
Over the last decade, volume growth in the lubricants
market has been low at 3-5%, despite strong growth in the automobile industry. This
has primarily been due to advances in technology, resulting in steadily increasing
drain intervals. Castrol enjoys superior pricing power and has been able to maintain
its margin/unit; it does not need to depend on volume growth.
Volatile raw material prices:
Most of Castrol's raw materials such as base oil and
additives are crude oil derivatives. As such, raw material price volatility is a key risk.
However, given low price sensitivity of lubricant demand and endogenous demand,
Castrol has historically been able to successfully deal with this challenge.
Aggressive foray by oil PSUs into bazzar trade:
The oil PSUs have begun attempting
aggressive forays into the bazzar trade and have begun giving tough competition to
private players. BPCL has enjoyed decent success with its 'MAK' brand. Increasing
advertisement spends by the oil PSUs could result in margin pressure for private
players like Castrol.
OEMs introducing own brands:
Some OEMs have introduced their own brands.
However, for these OEMs, lubricants are not a core business, and they do not have an
addressable market beyond their immediate requirements. Due to these issues, their
costs are relatively higher and they are also not able to achieve minimum efficiencies
of scale.
Exchange rate volatility:
Castrol imports ~40% of its raw material requirements, and
raw materials account for ~50% of its sales. As such, it is exposed to exchange rate
volatility. Nonetheless, Castrol has been able to pass on any adverse impact and
maintain fairly stable margins.
30 July 2012
33

Castrol India
Background
Castrol India Limited, a 71% subsidiary of BP, is a leading lubricants player in India,
with ~20% market share of the domestic automotive lubricants industry. It
manufactures and markets a range of automotive and industrial lubricants. It markets
its automotive lubricants under two brands - Castrol and BP. The company enjoys
leadership in most of the segments it operates in, including tractor oils, car engine
oils, two-wheeler 4-stroke oils, and multi-grade diesel engine oils.
Castrol has the largest manufacturing and marketing network amongst the lubricant
companies in India. It has five plants across the country, including a state-of-the-art
manufacturing facility at Silvassa. It has a distribution network of 270 distributors,
servicing over 70,000 retail outlets.
Though Castrol is present in both automotive lubricants and industrial lubricants, its
strengths are in the automotive segment. In CY11, the product mix between the
automotive and industrial & marine segments was ~86% and ~14%, respectively. EBIT
contribution was also similar, with the automotive segment contributing ~84% and
the industrial and marine segment contributing ~16%.
Castrol: Involvement across the value chain
Source: BP Downstream Presentation 2030
Castrol: Revenue and EBIT contribution from the automotive segment
Source: Company/MOSL
30 July 2012
34

Castrol India
Key management personnel
Mr SM Datta, Chairman
Mr SM Datta graduated with Honors in Chemistry from the Presidency College, Kolkata
and obtained a Post Graduate degree in Science & Technology from the University of
Calcutta. He is a Chartered Engineer, Fellow of the Institution of Engineers, Fellow of
the Indian Institute of Chemical Engineers, Member, Society of Chemical Industry
(London) and Honorary Fellow of All India Management Association. He has been
President of Associated Chambers of Commerce & Industry, President of the Council
of EU Chamber of Commerce in India, President of the Bombay Chamber of Commerce
& Industry, President of Indian Chemical Manufacturers Association, and Chairman of
Bombay First.
Mr R Kirpalani, Chief Operating Officer, Director - Automotive
Mr Ravi Kirpalani is an Economics (Honors) graduate from St Stephens College, Delhi
and an MBA from IIM, Kolkata. Mr Kirpalani has over 30 years of experience in Sales,
Marketing and Strategy. He joined Castrol India in 1999 as General Manager, East and
was promoted in 2002 to Vice President - Sales. In 2004, he was appointed as Customer
Director for India, Middle East, Turkey and Africa. In 2005, he moved to the UK as
Transformation Director and was a Member of the Global Strategy Team. He played a
key role in the implementation of the group's global strategy. Mr Kirpalani returned
to Castrol India in 2009 as Director - Automotive and Chief Operating Officer. Prior to
Castrol, Mr Kirpalani worked for Reckitt Benckiser for 12 years and for a leading
consumer products company in Muscat, Oman.
Mr Uday Khanna, Director
Mr Uday Khanna is a Chartered Accountant. Before joining Castrol, he was with the
Lafarge Group. He joined the Lafarge Group in Paris on 1 June 2003 as Senior Vice
President for Group Strategy, after a long experience of almost 30 years with Hindustan
Lever/Unilever in a variety of financial, commercial and general management roles
both nationally and internationally. From July 2005 to July 2011, Mr Khanna was the
Managing Director and Chief Executive Officer of Lafarge India.
Mr Sujit Vaidya, Director - Finance, Whole-time Director
Mr Sujit Vaidya has been Director - Finance and Whole-time Director since November
2010. Mr Vaidya served as an Additional Director at Castrol India from 12 October 2010
to 16 November 2010. He is a qualified Chartered Accountant with a varied experience
in financial control & accounting, business strategy & planning and financial analysis
of over 20 years in MNCs (P&G, Citibank), accounting & consulting firms (BCG & KPMG)
and a large oil company (BP/ Castrol).
30 July 2012
35

Castrol India
Financials and Valuation
Income Statement
Y/E December
Net Sales
Change (%)
Raw Material
Employee Cost
Other Manuf. Exp.
Selling Admin. & Other Exp.
Total Expenditure
EBITDA
Change (%)
% of Net Sales
Depreciation
EBIT
Interest & Finance Charges
Other Income
PBT
Tax
Effective Rate (%)
Reported PAT bef. MI
Change (%)
Adjusted PAT
Change (%)
CY10
28,020
17.2
13,847
993
6,492
4,446
20,770
7,249
26.0
25.9
243
7,006
24
395
7,377
2,474
33.5
4,903
28.7
4,914
27.6
CY11
30,821
10.0
16,945
1,111
6,492
4,650
24,239
6,582
-9.2
21.4
251
6,331
19
846
7,158
2,348
32.8
4,810
-1.9
4,853
-1.2
CY12E
32,865
6.6
18,820
1,183
6,492
4,831
26,458
6,407
-2.7
19.5
301
6,106
19
807
6,893
2,334
33.9
4,559
-5.2
4,559
-6.1
CY13E
35,353
7.6
19,166
1,273
6,492
5,179
27,364
7,989
24.7
22.6
331
7,657
20
848
8,485
2,873
33.9
5,612
23.1
5,612
23.1
(INR Million)
CY14E
38,579
9.1
20,711
1,350
6,493
5,671
29,637
8,942
11.9
23.2
362
8,580
20
940
9,500
3,217
33.9
6,283
12.0
6,283
12.0
Balance Sheet
Y/E December
Equity Capital
Reserves
Net Worth
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Curr. Assets
Inventory
Sundry Debtors
Cash & Bank Balances
Loans & Advances
Current Liab. & Prov.
Sundry Creditors
Provisions
Net Current Assets
Deferred Tax Liability
Application of Funds
E: MOSL Estimates
CY10
2,473
3,062
5,535
5,535
2,955
1,752
1,203
11,628
2,442
1,784
6,193
1,209
7,833
4,949
2,884
3,795
371
5,535
CY11
2,473
3,569
6,042
6,042
3,066
1,941
1,125
12,035
3,009
2,190
5,490
1,347
7,991
5,140
2,852
4,044
562
6,042
CY12E
2,473
3,803
6,276
6,276
3,676
2,242
1,434
13,064
3,334
2,333
5,950
1,446
8,784
5,834
2,950
4,280
562
6,276
(INR Million)
CY13E
2,473
4,370
6,843
6,843
4,026
2,573
1,452
14,169
3,388
2,510
6,716
1,556
9,341
5,750
3,592
4,828
562
6,843
CY14E
2,473
4,886
7,359
7,359
4,396
2,935
1,461
15,587
3,664
2,739
7,525
1,659
10,251
6,213
4,038
5,336
562
7,359
30 July 2012
36

Castrol India
Financials and Valuation
Ratios
Y/E December
Basic (INR)
Adj. EPS
Adj Cash EPS
Book Value per Share
DPS
Payout (Incl. Div. Tax) %
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price to Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors (Days)
Working Capital (Days)
Asset Turnover (x)
Gross Fixed Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
CY10
19.9
20.9
22.4
15.0
88.2
CY11
19.6
20.6
24.4
15.0
88.4
CY12E
18.4
19.7
25.4
15.0
94.9
CY13E
22.7
24.0
27.7
17.5
89.9
CY14E
25.4
26.9
29.8
20.0
91.8
27.0
25.7
17.4
4.5
23.9
2.8
27.3
26.0
19.3
4.1
21.9
2.8
29.1
27.3
19.8
3.9
21.1
2.8
23.6
22.3
15.8
3.6
19.4
3.3
21.1
19.9
14.0
3.2
18.0
3.7
79.4
112.6
93.7
133.6
83.8
109.4
74.0
99.1
85.6
116.7
24
60
129
-44
5.1
9.5
23
58
109
-28
5.1
10.1
26
59
110
-25
5.2
8.9
26
59
108
-23
5.2
8.8
26
59
108
-23
5.2
8.8
0.0
0.0
0.0
0.0
0.0
Cash Flow Statement
Y/E December
PBT before E.O. Items
Add : Depreciation
Add: Interest
Less : Direct taxes paid
Inc/Dec in WC
CF from operations
CF from Oper. incl. EO Items
(Inc)/Dec in FA
(Pur)/Sale of Investments
CF from investments
Inc/Dec in Networth
Inc/Dec in Debt
Less: Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOSL Estimates
CY10
7,377
243
24
2,474
364
5,535
5,535
(238)
5
(232)
7
0
4,325
(4,367)
935
5,258
6,193
CY11
7,158
251
19
2,348
(952)
4,129
4,129
(318)
0
(318)
8
0
4,311
(4,514)
(703)
6,193
5,490
CY12E
6,893
301
19
2,334
224
5,104
5,104
(300)
0
(300)
0
0
4,325
(4,344)
460
5,490
5,950
CY13E
8,485
331
20
2,873
218
6,181
6,181
(350)
0
(350)
0
0
5,046
(5,066)
765
5,950
6,716
CY14E
9,500
362
20
3,217
301
6,966
6,966
(370)
0
-370
0
0
5,767
(5,787)
810
6,716
7,525
30 July 2012
37

Castrol India
N O T E S
30 July 2012
38

Motilal Oswal Company Gallery

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