Gulf Oil Lubricants India Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Gulf Oil Lubricants reported 23.1% YoY increase in revenues to | 283.6 crore, above our estimate of | 244.3 crore due to higher volume growth of ~30% vs. estimate of 7.5%. Excluding an institutional order, volume growth was at 16% in Q1FY17 Subsequently, the EBITDA increased 40.5% YoY to | 48.5 crore (our estimate: | 36.9 crore). The EBITDA per litre was at | 22 per litre in Q1FY17 vs. | 20.3 per litre in Q1FY16 (our estimate: | 20.2 per litre)...

The results were broadly in line with ourestimates. Revenues at INR271cr increased 3% YoY mainly driven by volume growth of 10%. B2B volumes jumped 21%, aided by new tie-ups with OEMs. B2C growth was at a 3% vis-a-vis industry growth of 1%. Gross margins expanded by 600bp YoY and 90bp QoQ on the back lower raw material costs....

ICICI Securities Ltd | Retail Equity Research Gulf Oil Lubricants reported a 3.1% YoY increase in revenues to | 271.9 crore, above our estimate of | 264.6 crore on account of...

Gross margins expanded by 570bp YoY and 100bp QoQ on the back lower raw material costs due to a fall in base oil prices by 31% YoY. EBITDA Margin at 15.8% came in-line with our estimate and is up 270bp YoY & 20bp QoQ. Current EBITDA margins would be somewhere near the peak and we expect them to stabilise at current levels of...

Gulf Oil Lubricants (GOL) reported good numbers, with 9.1% YoY revenue growth (at Rs 2.6bn) led by a healthy 13% volume growth. Strong expansion in gross margin (GM) continued ( 696bps to 45.9%) aided by RM tailwinds (base oil prices down ~31% YoY). EBITDA growth ( 28.9%) was healthy, with 243bps YoY rise in EBITDA margin at 15.8%.

We believe GOL is undervalued despite its low leverage, superior return ratios (FY18E RoE ~40.9%), multi-year market share gains, healthy dividend payout (~35%) and growth prospects. We maintain BUY with a TP of Rs 632 (25x 1-year forward rolling EPS).

Gulf Oil Lubricants (GOL) 3QFY15 PAT, which grew 9% YoY to Rs 182mn, was subdued on account of (1) lower than anticipated revenue of ~Rs 2.4bn (13% YoY growth) and (2) forex MTM loss of Rs 30mn.