(Reuters) -Castrol India reported a 5.1% rise in second-quarter profit on Tuesday, fuelled by steady demand for its automobile and industrial lubrication products.
The engine oil and industrial lubricants maker, majority-owned by BP, posted a profit after tax of 2.44 billion rupees ($27.8 million) for the quarter ended June 30, up from 2.32 billion rupees a year ago.
Revenue from operations grew 7.1% to 14.97 billion rupees, while total expenses rose 6.6%, driven by a 3.2% increase in raw material costs.
India’s retail vehicle sales rose nearly 5% year-on-year during in the quarter, lifting demand for companies like Castrol, which generates roughly 80% of its revenue from the auto sector.
Two-wheeler sales were up 5.02%, while passenger vehicles and commercial vehicle sales grew by about 3% and 1%, respectively.
Castrol India supplies lubricants to major auto manufacturers in the country, including Maruti Suzuki and Hero MotoCorp.
In its latest annual report, the company detailed plans to expand its geographic reach by broadening its product portfolio, enhancing its workshop network and investing in premium lubricant brands.
“Industrial is a long-term growth area for us, and we’ve seen encouraging traction in the first half,” said Managing Director Kedar Lele in a statement.
Shares of the company are up 1.6% higher after results were reported, having gained 9.3% in the reported quarter.
In comparison, shares of smaller peer Gulf Oil Lubricants India jumped 10.2% in the same period.
($1 = 87.7940 Indian rupees)
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sumana Nandy)
