COVID-19 impact: Castrol India reports decline in Q1 revenues & net profit

The COVID-19 pandemic has affected the world economy, including India, leading to significant decline and volatility in economic activities. Castrol India has reported a decline in its revenues as well as net profit for the First Quarter (Jan - March 2020).

Castrol India reported revenue from operations at Rs 688 crore (as against Rs 976 crore in Q1 2019); while the company’s profit after tax stood at Rs 125 crore (Rs 185 crore in Q1 2019).

The manufacturing facility of Castrol India at Patalganga (Maharashtra), Silvassa and Paharpur (West Bengal) were closed on March 23, 2020 following the country-wide lockdown due to the pandemic. The company has since obtained required permissions and commenced partial operations at all its three manufacturing facilities from May 2020.

Sandeep Sangwan, Managing Director, Castrol India, commented, “The first quarter of 2020 has been unprecedented with an overall slowdown in the economy, liquidity crunch as well as the break-out of the global COVID-19 pandemic. As a result of which, the overall lubricant industry in the country has been hit by severe demand and supply disruptions.”

Adding further, Sangwan said, “Castrol India was resilient and stepped up in managing this extraordinary situation with three clear objectives – protecting people, supporting communities and protecting the financial health of our business. We have taken various measures to support employees, support staff, distributors and suppliers during these difficult times as #IndiaFightsCorona. We have also stepped up and made contributions to impacted communities in several ways. Our CSR efforts have been focused on helping government hospitals, essential service workers, mechanics, truckers, migrant workers and labourers affected by the crisis.”

Castrol India continues to work on numerous cost control actions, working capital management as well as efficiency programmes to drive margins and protect the company’s finances.

“As part of our strategic delivery, we sustained our efforts to drive consumer communication and customer acquisition across key geographies and markets. We renewed our long-term partnership with JCB, the largest off-road vehicle manufacturer in India. Readying ourselves for a low carbon future, we entered into agreements for EV fluids with OEMs in India including MG Motors and Tata Motors, as well as to supply lubricants to various OEMs for their BS-VI compliant vehicles,” Sangwan added.

The company will continue to monitor the dynamic nature of the ongoing crisis and evolve to protect the health and long-term sustainability of its business. Sangwan said, “Our current strong liquidity position gives us confidence to be able to meet the near-term challenges. We are committed to our overall strategy and growth agenda which will help us realise our potential when normalcy is restored.”