(Reuters) -Engine oil and lubricants producer Castrol India reported an 8% rise in first-quarter profit on Monday on the back of growing demand for its products.
Profit at Castrol India, majority-owned by British oil major BP, rose to 2.33 billion rupees ($27.4 million) from 2.16 billion rupees a year ago. Revenue increased 7.3% to 14.22 billion rupees.
Castrol is India’s largest private retailer of engine oils. In recent years it focussed on offering more premium products for sport utility vehicles – India’s most sold category of cars – while also expanding in rural areas.
Analysts say the company will continue to benefit from rising demand for its oil products as the transition to electric vehicles in India happens at a slow pace.
EVs form just 2.5% of car sales in the country and 5% of two-wheeler sales. India is aiming for 30% of all new vehicle sales to be electric by 2030.
India’s overall auto sales by manufacturers to dealers grew about 2% in the January-March quarter, with sales of large trucks, SUVs and scooters leading the way.
Castrol India supplies its lubricants to India’s biggest auto manufacturers across segments, including Maruti Suzuki and Hero MotoCorp.
“The successful relaunch of Castrol Activ and continued traction in rural markets have been key growth drivers and contributed meaningfully to our volume growth this quarter,” Managing Director, Kedar Lele, said in a press release.
The company’s shares closed 3.2% higher on Monday ahead of the results.
($1 = 85.0070 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Eileen Soreng)
