Castrol India faces challenging times in the wake of economic slowdown
Castrol India’s results for the September quarter highlighted the challenges the company faces as the economic slowdown continues to hamper demand. The rupee’s depreciation has also contributed to increased costs. Castrol India’s net profit for the quarter showed a 10% drop.
“The cost of goods continued to grow significantly despite softening of base oil prices due to continuing rupee depreciation, putting margin under pressure. The adverse impact of the Rupee depreciation was Rs58 crores (US$10.6 million) during the quarter under review,” said Ravi Kirpalani, COO and automotive director of Castrol India.
The company said the next few quarters will be challenging. Despite a 3% growth in the automotive lubricants segment, the company exhibited an almost flat volume growth. However, Castrol continues to invest in its brand and distribution network. (October 24, 2012)
