Motilal Oswal Initiates Coverage of Castrol India with a Buy Recommendation

Motilal Oswal Maintains BUY Rating for Castrol India

Castrol India, a leading lubricants manufacturer, has reported its financial results for the first quarter of the current fiscal year (1QCY26). According to a research report by Motilal Oswal, the company's earnings before interest, tax, depreciation, and amortization (EBITDA) and reported profit after tax (PAT) came in line with the investment firm's estimates.

In terms of volume growth, Castrol India has reported a significant increase in the first quarter of the current fiscal year, with sales volume growing in high single digits year-over-year (YoY). However, the company's EBITDA margin contracted by 30 basis points (bp) YoY, which is a notable decline. Despite this, the reported PAT came in line with Motilal Oswal's estimate at INR2.4 billion. Other income also exceeded the investment firm's expectations, coming in at 2.4 times the estimate at INR233 million.

Motilal Oswal's Valuation and Recommendation

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Motilal Oswal values Castrol India at 22 times its estimated earnings per share (EPS) for the fiscal year ending in December 2027 (Dec'27 EPS), which translates to a target price (TP) of INR220. The investment firm has maintained its BUY rating for the stock, indicating a strong outlook for Castrol India's future performance.

Note: The table above presents Motilal Oswal's valuation multiple, estimated earnings per share (EPS) for the fiscal year ending in December 2027, and the corresponding target price for Castrol India.