Maintain BUY. Gulf Oils 4QFY20 adj. volumes declined ~13% YoY amidst the downturn in the auto industry and COVID-19 impact. However, we expect Gulf Oil to outperform the industry on the back of expansion of its distribution network and improving product/customer mix. The company is expected to gain market share in the PCMO segment as customers shift towards personal mobility.

We reiterate BUY and expect Gulf Oil to outperform industry leader Castrol. However, we believe that the co's performance is now impacted by the slowing industry scenario and moderating growth rates (volumes have declined over Jun-Dec19). We trim down our earnings by ~6% over FY20-22E and reduce our target multiple to 20x (vs. 22x earlier) to factor in the above. Also, the recovery in factory fill volumes is likely to be delayed. Key risk: Faster than expected adoption of EVs. Gulf Oils 3QFY20 adj. volumes declined 2% YoY amidst the downturn in the auto industry. However, EBITDA margin surprised at 18.4% (+260bps YoY) owing to stable input costs. Maintain BUY with a revised TP of Rs 995 based on Dec-21 EPS.

Maintain BUY as (1) Gulf Oil is significantly outgrowing the industry leader Castrol (over FY16-19 Gulf's vols have risen 17% vs. 3% for the latter) and is expected to grow ahead of the industry over FY20-21 (2) New capacities, expanding distribution network and improving product/customer mix will help from hereon and (3) Diversification into the battery segment will drive growth in the medium term. Despite weak macros in 2QFY20, stable input costs and improving realizations (due to changing product mix) has helped Gulf Oil to deliver EBITDA margin of 18% (+90bps YoY, vs. our estimate of 17%). We expect the co to deliver 3x the industry growth as it expands into new segments and ramps up its distribution reach. Maintain BUY with a TP of Rs 1,145 (@22x Sep-21 EPS).

We reiterate BUY as (1) After significantly outgrowing the industry leader Castrol (over FY16-19 Gulf's vols have risen 17% vs. 3% for the latter), we expect Gulf to grow ahead of the industry over FY20-21. Growth will be driven by increased capacity (new capacity of 150mn KL p.a. in 19), expanding distribution network (~70k retailers vs. 150k for Castrol) and improving product/customer mix (2) Gulf is diversifying its portfolio by entering the battery segment which will drive growth in the medium term (3) The co enjoys robust return ratios with ROEs in excess of 30%. (4) Faster than expected adoption of EVs will be a key risk to our thesis. 1QFY20 operating performance was healthy as EBITDA margins expanded ~120/70bp YoY/QoQ to 17.7% driven by an improved product mix. We expect Gulf Oil to deliver 3-4x the industry growth as the co expands into new segments and ramps up its distribution reach. We have a TP of Rs 1,050 based on 22x FY21 EPS.

Gulf Oil Lubricants reported Q1FY20 results largely in line with our estimates although volume growth was marginally below estimates of 10% and were at 7.5% YoY (core volume growth of 10% in line with estimate). Revenues increased 12.9% to | 440.7 crore, in line with our estimate of | 449.3 crore. EBITDA per litre was at ~| 26.3 per litre (Q1FY19: | 23.5 per litre), above our estimate of | 24.5 per litre on account of a better sales mix. Subsequently, EBITDA during the quarter increased 20.6% YoY to | 77.9 crore, above our...

Volume traction strong, margins expanded. Recommend Accumulate. GOLIL's revenue and profitability were in line with our estimates. Volume in Q1FY20 grew 7.5% YoY. (Core volumes grew 9.8%). While economic factors were slowing down and there was a slowdown in auto sales, GOLIL outperformed the industry in Q1FY19. Sales came from personal mobility, industrial and infrastructure segment. DEO segment had a slowdown due to slowdown in auto sector. Gross margins improved by 280 bps due to better product mix, segment mix, better realisations (retail price hike taken...

Over FY15-19, Gulf's volume/ revenue/EBITDA/PAT has grown by 17/19/21/20% vs. market leader Castrol's 3/6/4/4%. Gulf's superior growth is led by increase in capacity (75 to 90mn KL p.a. in FY16 and 150mn KL in FY19), expansion in distribution reach by ~15% p.a. (~70k retailers vs. 150k for Castrol), and improving product and customer (B2C) mix. We reiterate our Buy, as Gulf's growth story is solid led by a focused management. We expect market-share gains to be driven by an expanding distribution network. Short-term weakness, if any should be an add-on opportunity. Our recent meeting with the management of Gulf Oil reinforces our view about the companys industry leading volume growth and superior execution. We expect Gulf to continue to deliver 3-4x industry volume growth and gain market share. Reiterate BUY; TP of Rs 1,052 @ 22x FY21E EPS.

Volume traction strong, margin to bounce back. Maintain BUY. GOLIL's revenue and profitability were in line with our estimates. Volume in Q4FY19 grew 10% YoY. While economic factors were slowing down and there was a slowdown in auto sales, GOLIL outperformed the industry by 4-5x in Q4FY19. Sales came from personal mobility, industrial and infrastructure segment. DEO segment had a slowdown. Core sales growth for FY19 was 18% YoY, which came from new customers and new segments. GOLIL has taken adequate price hikes of 2-3% each in December,...

Gulf Oil Lubricant's Q4FY19 numbers were below our estimates on account of a slowdown in volume growth due to weak auto sales numbers. Volume growth in Q4FY19 was at 10% YoY, below our estimate of 14% YoY. Hence, revenue growth was below our estimate of | 448.2 crore and grew 16.8% YoY to | 436.2 crore. EBITDA per litre was at | 24.9 per litre (Q3FY19: | 24 per litre) below our estimate of | 27.5 per litre on account of higher-thanexpected operational expenses and negative operating leverage. Subsequently, EBITDA during the quarter increased 18% YoY to | 74.2 crore, below our estimate of | 85.1 crore. PAT increased 15% YoY at | 47.6...

ICICI Securities Ltd | Retail Equity Research Gulf Oil Lubricant's Q3FY19 numbers were above our estimates driven by higher-than-expected YoY volume growth. Revenues...

We have revised our FY20/21E earnings to factor in Gulf's healthy volume trajectory. Maintain BUY with revised TP of Rs 1,037 @ 22x Dec-20E EPS. Gulf Oil Lubricants (GOL) registered healthy volume growth of 20% YoY (34% including a one-off institutional order). Revenue/EBITDA/PAT grew by ~30/18/17% YoY to Rs 4.6/0.7/0.5bn. Gross/EBITDA margins were down by ~500/150bps to 43.3/15.8% on account of low-margin institutional order. Adjusted for this order revenue/EBITDA growth would be ~21/18% with ~30bps margin decline YoY.

We hosted the GOLIL management team Mr Ravi Chawla (MD) and Mr Manish Gangwal (CFO) in Mumbai for investor interaction. Our interaction has reinforced our belief in the management team. According to the management, lubricant business will continue to be driven by distribution,...

We hosted the GOLIL management team Mr Ravi Chawla (MD) and Mr Manish Gangwal (CFO) in Mumbai for investor interaction. Our interaction has reinforced our belief in the management team. According to the management, lubricant business will continue to be driven by distribution,...

We initiate coverage on Gulf Oil Lubricants India (GOLI), with a Buy rating and a target price of Rs1,150 (over 50% upside). We value GOLI at 22x FY21E EPS on the back of 18% EPS CAGR and 30%+ ROE during FY18-21. GOLI recorded a robust 3-year volume CAGR of 12% despite major economy-wide disruptions such as the demonetization and GST. In 1HFY19, core growth accelerated...

Maintain BUY with revised TP of Rs 946 @ 22x Sep-20E EPS Gulf Oil Lubricants (Gulf Oil) 2QFY19 was healthy on operational front. This was led by robust volume growth of 22% (30% including one-off low-margin orders from govt. agencies). Revenue grew by 29%, EBITDA 15% and APAT 13%. RPAT was flat as included Rs 80mn forex loss impact in interest costs.

Volume growth in Q2FY19 was at 30% YoY (core volume growth:22%), above our estimate of 13% YoY. EBITDA/litre was at | 24 per litre (Q2FY18: | 27 per litre) marginally above our estimate of | 23.6/litre. Subsequently, EBITDA during the quarter increased 15.4% YoY to | 71.4 crore, above our estimate of | 61.3 crore PAT remained flattish at | 40.3 crore (our estimate: | 38.3 crore). PAT growth was lower in comparison to EBITDA growth mainly on account of higher interest costs (due to forex losses)...

GOLIL delivered a healthy volume growth of 33% for Q1FY19 driven by strong growth across all segments and channel sales. We expect this sale to stabilize and retail channel to grow faster than B2B channel in FY19. Raw material prices are now stable, however, GOLIL has taken a price hike in July 2018 to protect margins. Volume growth of GOLIL would be around 3x of industry average. This growth would be driven by the new product launches, expansion of distribution channels and focus on gaining more OEM tie-ups. Improvement in the working...

Maintain BUY with TP of Rs 1,027 @ 25x FY20E EPS. Gulf Oil Lubricants (Gulf Oil) 1QFY19 was healthy led by 33% YoY volume growth. Revenue at Rs 3.9bn in 1QFY19 grew by 39.4%. Gross margin declined by 136bps YoY to 46%. EBITDA grew by 31% to Rs 645mn. PAT at Rs 400mn was up by 17%. PAT lagged EBITDA on account of commissioning of Chennai plant and forex loss of Rs 20mn.

ICICI Securities Ltd | Retail Equity Research Gulf Oil Lubricant's (GOL's) Q1FY18 numbers were above our estimates driven by higher-than-expected YoY volume growth....