Gulf Oil Lubricants India Ltd. share price target

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....

GOLIL delivered a healthy volume growth of 19.5% for Q4FY18 driven by strong B2B sales. We expect this sale to stabilize and retail channel to grow faster than B2B channel in FY19. Raw material prices can increase, however, GOLIL can pass on any increase and protect margins. Volume growth of GOLIL would be around 3x of industry average, achieved by distribution expansion and increasing product portfolio. This growth would be driven by the new product launches, expansion of distribution channels and focus on gaining more OEM tieups. Improvement in the working capital cycle further improves the...

ICICI Securities Ltd | Retail Equity Research Gulf Oil Lubricant's Q4FY18 numbers were above our estimates driven by higher-than-expected YoY volume growth. Revenues...