Gulf oil Lubricant India limited : A consumable play in Auto & Industrial segment CMP Rs562 TP Rs 785

 

About Company 

Gulf Oil Lubricants India Limited (GOLIL), part of Hinduja Group and Gulf Oil International, is one of the leading players in the lubricant market in India and has a top 2 / 3 position in key segments amongst the private sector brands. GOLIL has a wide range of world class-leading products in the automotive and industrial lubricants space catering to B2B and B2C segments with a growing distribution network. The brand has tie-ups with around 40 OEM's and is a leader in the direct sales network to industrial, infrastructure and institutional customers, and exports to over 25 countries. 

Gulf Oil India is one of the prominent manufacturer and marketer of quality Adblue product range and is one of the preferred supplier of many automotive OEMs. Along with automotive and industrial lubricants, greases, They Have a Top 5 share in the 2-wheeler batteries replacement segment. In India, 

Gulf oil has a strong manufacturing and R&D bases with two plants in Silvassa and Ennore, Chennai. The brand is working towards being future-ready to offer additional mobility solutions and has recently tied up with Indra Technologies- UK based charger/mobility company and ElectreeFi, an EV SaaS provider to drive the change. 

Today, globally the Gulf brand is present in more than 100 countries across five continents. The Gulf Oil international Group's core business is manufacturing and marketing an extensive range of over 400 Performance lubricants and associated products for all market segments.

Gulf enjoys a strong brand recall built through association with brand ambassadors like Mahendra Singh Dhoni, hardik Pandya, Smriti Mandhana, Chennai Super Kings coupled with global sporting partnerships like Williams

AdBlue® is a diesel exhaust fluid used in vehicles with Selective Catalytic Reduction (SCR) technology to reduce harmful gases being released into the atmosphere. AdBlue® is solution of high-purity, synthetically manufactured urea in de-mineralized water. It is a safe-to-use fluid.

Financials

Gulf oil Q1: results topline grew by approximately 15% and net profit grew by 23% thanks to lower RM prices. adlube brand which is a consumable to reduce engine exhaust pollution is received by the market well and seeing good demand and contributing to the growth of company, diversifying and focussing on EV ,also industrial lubricant segment catering to,engines,compressor, bearing,marine,turbine segment will see a rise in demand due to higher domestic manufacturing activities & expansion 

Promoter holding:72%

ROE: 21%

ROCE:24%

Last Dividend: Rs 25

Face Value :Rs 2

Gulf oil  came with buy back offer last year at Rs600 current price after becoming ex dividend is less then the last buy back.Looking at trend it has potential to deliver EPS of Rs 52-55 for year 23-24 based on estimated EPS stock is available at forward PE of just 10-11.

Long term investors may accumulate on dips for one year TP of Rs 785.