Gulf Oil Lubricants India has announced ambitious plans to expand its production capacity by 70% from current levels, aiming to reach 250 million litres within the next 18 months. The company, which currently operates at 95% utilization across two plants handling 152 million litres annually, is set to embark on a significant growth trajectory.

Expansion Strategy

CEO Ravi Chawla revealed that the capacity expansion will commence at the Chennai plant, with land acquisition already completed at the Silvassa facility. This two-pronged approach underscores the company's commitment to meeting growing demand and strengthening its market position.

Strong Performance Across Segments

Gulf Oil reported impressive growth in the first quarter, with double-digit increases in both volumes and revenues. The company's performance outpaced the industry, growing nearly three times faster across various segments:

• B2C (Business to Consumer)
• B2B (Business to Business)
• Industrial
• OEM (Original Equipment Manufacturer)
• Agri-rural

Targeting Underrepresented Categories

In a strategic move to capture additional market share, Gulf Oil is focusing on categories where its current market share is below 5%. This approach aims to identify and capitalize on expansion opportunities in less saturated segments.

Financial Snapshot

As of the latest report, Gulf Oil Lubricants India's market capitalization stands at ₹6,078.00 crore. The company's shares are currently trading at ₹1,233.50, reflecting an 11.00% decrease over the past year.

The ambitious expansion plan, coupled with strong performance across various segments, positions Gulf Oil Lubricants India for potential growth in the coming months. However, investors should note the recent share price decline and consider both the opportunities and challenges as the company embarks on this significant capacity expansion.

Oil India Limited (OIL), a Maharatna CPSE under the Government of India, reported a significant decline in its standalone profit for the first quarter, primarily due to lower crude oil prices. Despite the challenges, the company's consolidated performance remained stable, supported by strong contributions from its subsidiary and Russian investments.

Financial Performance

Oil India's standalone profit after tax (PAT) for Q1 stood at ₹813.00 crores, a 45% decrease from ₹1,467.00 crores in the same period last year. The company's revenue declined to ₹5,012.00 crores from ₹5,839.00 crores year-on-year. Earnings per share (EPS) fell to ₹5.00 from ₹9.00 previously, while the EBITDA margin dropped to 34% from 43%.

The primary reason for the decline was a 22% fall in crude oil realization, which averaged $66.20 per barrel during the quarter, compared to $84.89 per barrel in the previous year.

Consolidated Performance

Despite the standalone profit decline, Oil India's consolidated profit after tax remained stable at ₹2,047.00 crores. The consolidated earnings per share slightly improved to ₹11.66 from ₹11.59. This resilience in consolidated performance was attributed to strong contributions from its subsidiary, Numaligarh Refinery Limited (NRL), and Russian investments.

Operational Highlights

• Crude oil production for the quarter was 0.85 Million Metric Tonnes (MMT)
• Natural gas production reached 0.83 Billion Cubic Meters (BCM)
• The company announced a new hydrocarbon discovery in the Namrup-Borhat OALP block
• Gas production commenced from the Bakhritibba DSF in Rajasthan

Future Outlook

Oil India has planned a capital expenditure of ₹6,995.00 crores for the current fiscal year. The company has set production targets of 3.70 MMT for oil and 3.65 BCM for gas.

Numaligarh Refinery Limited Performance

NRL, Oil India's material subsidiary, reported strong performance:

Russian Investments

Oil India's investments in Russian assets continued to yield positive results:

• Taas-Yuryakh project: Received dividends of approximately USD 17.00 million in Q1
• Vankorneft asset: Received dividends of USD 11.20 million in Q1

The company expects the dividend inflow from these assets to continue, subject to geopolitical conditions and oil price movements.

Conclusion

While Oil India faced challenges in its standalone performance due to lower crude oil prices, its diversified portfolio and strategic investments have helped maintain overall stability. The company continues to focus on production growth and long-term value creation across its portfolio.