The shares of this small cap stock, engaged in the business of manufacture and distribution of automotive and industrial lubricants surged up to 13 percent on Thursday after Bloomberg’s reports of Saudi Aramco’s potential bid in the firm.
Stock Performance
With a market capitalization of Rs 24,208.77 crore, Castrol India Ltd surged up to 13 percent in Thursday’s trading session and made a high of Rs 252 per share compared to its previous closing price of Rs 222.30 per share. The stock retraced from its day’s high and was trading at Rs 244.75 which is a 10 percent increase compared to the previous closing price.
What Happened
According to a Bloomberg report, Saudi Aramco, the world’s largest energy company, is evaluating a potential bid for British Petroleum’s (BP) lubricant business Castrol. The Saudi company is in the process of analysing whether it should bid for all parts of BP’s lubricant business or just those which operate under Castrol.
The report also suggests that Aramco may consider merging Castrol with Valvoline, which it acquired for USD 2.65 billion in 2023. However, discussions are still in the early stages, and no final decision has been made.
Aramco’s interest in Castrol’s USD 10 billion lubricant business is driven by its presence in fast-growing markets such as India. The Castrol business is also attracting interest from other potential bidders, according to the report.
Company Overview
Castrol India Limited is a lubricant manufacturer engaged in producing and marketing automotive and industrial lubricants, along with related services. It operates in both Indian and international markets, offering a range of car engine oils, axle lubricants, auto transmission fluids, and greases.
The company operates 3 blending plants and has a distribution network of 350 distributors, reaching over 100,000 retail outlets across India. BP, the ultimate parent company of Castrol India, holds a 51 percent stake in the Indian company.
Financial Performance
In the latest quarter, Castrol India reported a 7 percent YoY increase in its revenue from Rs 1,264 crore to Rs 1,354 crore. On a quarterly basis, there was a 5 percent increase from Rs 1,288 crore in Q2 FY25.
This was accompanied by a 12 percent YoY increase in net profits from Rs 242 crore to Rs 271 crore. On a quarterly basis, the company saw a 31 percent increase in profits from Rs 207 crore in Q2 FY25.
Written by Shwetha Sairam
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