The company expects 7-8% volume growth in October-December 2024 quarter (Q3FY25), which is twice the market levels, said CFO Manish Gangwal speaking to CNBC-TV18 from the sidelines of the Motilal Oswal India Ideation Conference 2024.
The company has renewed its partnership agreement with Piaggio. The collaboration is extended till 2030 to deliver lubricants to Piaggio’s commercial vehicles and this partnership will cover lubricants including advanced BS-VI oils & electric vehicles (EV) fluids.
The current market capitalisation of the company is ₹5,761.17 crore.
These are the edited excerpts of the interview.
Q: Just wanted to understand what is Q3FY25 looking like. What have the trends been in terms of volume, especially both on the core business and also Gulf AdBlue volumes?
A: July-September 2024 (Q2FY25) was a good quarter, considering that it was a seasonal quarter being rain impacted, monsoons were there, and some impact of elections continued, but overall, we still have done quite well in terms of overall volume delivery. We are seeing some of the segments which were slightly lacking in Q2FY25, like the commercial vehicle factory field segment are all coming back. So we are seeing, after many months, some revival in commercial vehicle sales also in terms of factory field.
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Overall, rural is doing good in Q3FY25. So we are seeing offshoots of recovery coming back from the slightly subdued Q2FY25 – it being a monsoon quarter. But usually, the second half of the year is a better quarter from a lubricant perspective. So we are hoping for a good Q3FY25 and January-March 2025 (Q4FY25).
Q: Will you be able to quantify in terms of what will be the volume growth one can pencil in as far as Q3FY25 is concerned? Secondly, we want to talk to you specifically about the AdBlue segment – market share improvement was there in Q2FY25, where has it now reached, and what can you achieve at the end of 2024-25 (FY25)?
A: Our aim has always been to deliver 2-3% as the market grows. We know that the market is growing at 3-4% in terms of lubricant, and we continue to deliver nearly 7-8% or in some good quarters, 10% volume growth.
Our compounded annual growth rate (CAGR) volume growth for the last 15 years has been nearly 10% double-digit. So we continue to deliver that kind of volume growth, even in Q3FY25 we are looking at a similar kind of growth in terms of volume, 7-8% volume growth, which is 2x the market. That is the trajectory we aim at, and we are getting some tailwind help from even commercial vehicle factory field supplies, which are positive now in November month.
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We are also looking at AdBlue as a segment. And after a slightly subdued Q2FY25 in AdBlue, we are seeing some pick-up happening in AdBlue as a category. That category of AdBlue has grown nearly 600% in the last two years for us. So six times volume growth has happened.
Now at the current level of volume, we expect this category to continue to grow at 10-15% for us. The number for the first half of the year has been nearly around 11-12% volume growth. We want to close the year with a similar 15% volume growth for AdBlue. So overall, both the segments, lubricant and AdBlue are doing well.
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