Adverse trends in supply chain and sales, including unstable base oil prices and rupee depreciation, were among market factors cited by Indian companies in earnings announcements for the quarter ending March 31, the fourth fiscal quarter of most companies in India.
Profits dropped in the quarter for Savita Oil, GP Petroleums, Tide Water Oil, and Maximus International, while Continental Petroleums posted a large increase in profit, and Balmer Lawrie reported higher operating profit for its greases and lubricants segment.
“The challenging times continued into the last quarter, both on supply side and on the sales side, creating a double whammy of being saddled with high-cost inventory and the cost recovery challenges in the industry,” GP Petroleums CEO Prashanth Achar said in the company’s earnings press release. “However, what is heartening is the growth in the mainstream manufacturing business (read branded lubricants) during the quarter, where we grew by 10.7%, offsetting a 15.5% decline in trading business by adding new customer segments.” Achar noted the company trod cautiously in trading due to the volatile situation.
“Instability in the base oil prices and rupee depreciation has compressed profitability to a certain extent,” Gautam N. Mehra, chairman and managing director for Savita, said in its earnings release.
Savita Oil
Mumbai, India-based Savita Oil – which supplies transformer oils, white oils, lubricants and other products – reported a 37% drop in net profit to Rs 37.7 crore. For the full fiscal year, the company’s net profit declined 12% to Rs 220 crore, from Rs 250 crore.
The company’s total income for the quarter rose 18% to Rs 942 crore. In the full fiscal year, total income increased 24% to Rs 2,853 crore.
For the quarter, Savita’s revenue from petroleum products increased 17% to Rs 924.9 crore. The company’s full-fiscal year revenue from petroleum products reached Rs 3,501.6 crore, a 25% jump.
“We witnessed good volume growth in our transformer oil and lubricating Oil verticals in FY23 and continue to see that traction going forward,” Savita’s Mehra said.
He noted in its earnings press release that the company will commission a new synthetic ester fluid plant in the second fiscal quarter of fiscal year 2024 to manufacture high performance fluids across the company’s verticals. Many will be manufactured for the first time in India, Savita claims.
GP Petroleums
GP Petroleums, based in Mumbai, reported net profit of 4 crore, a 53% drop in the quarter. For the full fiscal year, net profit grew 33% to Rs 25.2 crore.
Revenue from operations was down slightly at Rs 181.9 crore for the quarter. In the fiscal year, revenue from operations increased 10% to Rs 790.4 crore.
Revenue for GP Petroleums’ manufacturing segment – which includes production and marketing of lubricants and greases – increased 10% to Rs 118.9 crore in the quarter. For the full fiscal year, manufacturing segment revenue jumped 27% to Rs 506.7 crore.
Revenue for the company’s trading segment, including base oil activities, declined 15% to Rs 63 crore. For the full fiscal year, trading segment revenue decreased 11% to Rs 283.7 crore.
Tide Water Oil
Tide Water Oil reported that its standalone profit for the quarter tumbled 35% to Rs 22.7 crore. For the full fiscal year, standalone profit fell 20% to Rs 84.9 crore.
The manufacturer and distributor of Veedol-branded lubricants said revenue from operations rose 7% to Rs 388.7 crore. For the fiscal year, revenue from operations climbed 20% to Rs 1,492.4 crore.
Maximus International
Maximus International reported consolidated net profit of Rs 1.3 crore, a 3% decrease, for the quarter. For the full fiscal year, consolidated net profit rose 56% to Rs 7.3 crore.
Consolidated revenue from operations for the Vadodara, Gujarat-based company jumped 31% to Rs 25 crore for the quarter. Fiscal-year consolidated revenue from operations surged 44% up to Rs 99.8 crore.
Continental Petroleums
Lubricants and grease seller Continental Petroleums Ltd., based in Jaipur, reported a 91% jump in net profit to Rs 1.8 crore. In the full fiscal year, net profit edged down 3% to Rs 3.9 crore.
Total revenue decreased 7% to Rs 27.4 crore in the quarter.. For the full fiscal year, total revenue declined 19% to Rs 98.5 crore.
Balmer Lawrie
Balmer Lawrie’s greases and lubricants segment reported operating profit of Rs 15.6 crore, an 8% increase. For the full fiscal year, the segment’s operating profit rose 29% to Rs 54.5 crore.
Net sales for the company’s greases and lubricant segment climbed 24% to Rs 167.8 crore. Net sales for the full fiscal year jumped 28% to Rs 653.5 crore.