Gulf Oil Corp. Ltd., based in India, announced last week that it will demerge its lubricants division and the segment will operate as a separate subsidiary effective April 1, 2014.
A Gulf Oil spokesperson declined to comment on the Aug. 7 announcement, which was posted on the Bombay Stock Exchange and the National Stock Exchange of India.
The announcement came out on the same day as the conglomerates first quarter earnings results for the quarter ending June 30. The company reported growth in both revenue and volume for its lubricants division.
Despite citing very tough market conditions, under which the automobile industry is facing one of its toughest times of recent years, the company noted in its earnings release that net turnover for its lubes division increased to Rs. 207 crores (U.S. $33.7 million), up by about 4 percent from Rs. 199 crores a year earlier. Operational profit also increased by 3.5 percent to Rs. 27.94 crores before interest and tax from the same quarter last year.
The company also pointed to increased market share in categories such as new generation diesel engine oils, motorcycle engine oils, and business with original equipment manufacturers.
Gulf Oil Corp. Ltd., part of the family-owned Hinduja Group conglomerate, first addressed the possibility of the demerger in an announcement posted on the National Stock Exchange of India earlier this year. The move will separate the lubricants business from the conglomerates other segments – explosives, mining and infrastructure, and property development. The resulting lubricant company will be a separately-listed entity on the two stock exchanges.