Gulf Oil Lubricants India Ltd. reported a nearly 7 percent increase in its fourth quarter net profit, thanks to sales growth across all key segments. Lower finance costs and higher other income also contributed.
The Mumbai-based company posted a standalone net profit of Rs 32.1 crore (Rs 321 million, or U.S. $5 million) from January to March 2017, up from Rs 30 crore a year earlier, according to a regulatory filing.
Other income jumped 23 percent annually to Rs 7.2 crore from Rs 5.8 crore, while finance costs declined 33 percent year on year to Rs 2.2 crore. Total expenses increased nearly 12 percent to Rs 255 crore.
Gulf Oil, which sells a wide range of automotive and industrial lubricants and greases, reported that net sales in the quarter increased 10 percent to nearly Rs 299 crore. It has more than 300 distributors and over 50,000 retailers in India.
In a statement, Gulf Oil said the growth was robust during the quarter despite the impact of demonetization continuing in the fourth quarter in certain segments.
For the fiscal year 2016-2017, Gulf Oil posted net profit of Rs 121 crore, up about 21 percent as sales and other income rose and finance costs declined. Annual net sales increased 12 percent to Rs 1,128 crore.
The company, part of Hinduja Group, said it achieved more than 3 times the 2-3 percent annual rate at which Indias lubricant industry is growing and recorded approximately 11 percent volume growth for the full year, thanks to increased market share across segments and improvements in product mix.
Gulfs sales of commercial vehicles, passenger cars and motorcycle oils continued to grow, with synthetic and premium products key in the personal mobility segment. Gulf also grew its original equipment manufacturer dealership business across various product categories including through new business generated by its recent tie-up with Bajaj Auto Ltd.
Business-to-business volumes also continued to grow, although some sectors like construction and infrastructure partially slowed down due to the demonetization impact, said Gulf Oil, whose competitors in Indias 2.4 million metric tons finished lubricants market include Castrol, Hindustan Petroleum Corp. Ltd., and Bharat Petroleum Corp. Ltd.
Gulf Oil continued to invest in brand-building to attract consumers and trade partners in the passenger car motor oils segment by leveraging its global associations with the Manchester United football club. It also launched several initiatives to connect better with its trade partners and influencers such as mechanics in the commercial vehicles segment. The company continued to expand its exclusive retailer loyalty program, Gulf Unnati. More focus on Gulf Car Stops and Gulf Bike Stops branded workshops also yielded growth in those segments.
Gulf Oil, which is building a new blending plant in Chennai, said several key aspects of the facility have been completed or are near completion. The plant is on schedule to start commercial production in the third quarter of Gulfs fiscal year. It is investing about Rs 150 crore to build the 50,000 metric tons per year plant.