Gulf Oil Lubricants India Ltd (BOM:538567) Q2 2026 Earnings Call Highlights: Strong Volume ...

This article first appeared on GuruFocus.

Release Date: November 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Gulf Oil Lubricants India Ltd (BOM:538567) reported a 9.5% volume growth in Q2, outperforming the market growth rate of 3%. The company achieved a double-digit growth in its B2C segment, particularly in personal mobility and rural markets. The OEM segment recorded its highest-ever quarterly volume, despite the monsoon season, indicating strong demand. AdBlue sales grew by 24% in the quarter, contributing to the overall revenue growth. The company's EV charger subsidiary, Tyrex, reported a 75% growth in revenue for H1, indicating strong performance in the EV segment.

Negative Points

The depreciation of the Indian rupee by 3.5% during the quarter negatively impacted profitability due to increased landed costs of imported products. The company faced a mark-to-market ForEx loss of ?6 crore, affecting the finance costs for the quarter. Cash flow generation from operations was lower compared to the previous year, attributed to elongated collection cycles during the monsoon season. The company's EBITDA margin was impacted, remaining at the lower end of the 12-14% guidance range due to external factors like currency volatility. Base oil prices have not decreased in line with crude oil prices, affecting cost management and margin improvement efforts.

Q & A Highlights

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Q: What is the overall EBITDA margin target for the full year, considering the current Forex impact? A: The CFO stated that the EBITDA margin is expected to remain within the 12% to 14% range. While the first half saw a margin of 12.3% due to Forex impacts, the company anticipates improvement if the rupee stabilizes and crude prices remain steady. The margin band remains intact, contingent on external factors like crude movement and Forex volatility.

Q: Can you provide a breakdown of sales growth across different segments and the impact of recent GST reforms? A: The CEO mentioned that key segments such as passenger car motor oils, motorcycle oils, and OEM segments have experienced double-digit growth. The recent GST reforms, which reduced rates for various vehicle categories, are expected to stimulate demand, positively impacting lubricant sales.

Q: How is Gulf Oil Lubricants addressing the competitive landscape, particularly with advancements in technology like API SQ? A: The CEO explained that Gulf Oil Lubricants is competitive in terms of technology, having launched products with the latest specifications like API SP for motorcycles. The company focuses on differentiating through brand perception, product quality, and market strategies.

Story Continues

Q: What is the outlook for Gulf Oil Lubricants' volume growth and profitability for FY26? A: The CEO indicated that the company expects to continue growing at 2 to 3 times the industry rate, which is currently around 3% to 4%. The second half of the year is anticipated to be strong due to factors like the festive season, GST cuts, and robust rural demand.

Q: Can you elaborate on the strategic investment in Tyrex and its future outlook? A: The CFO highlighted that Tyrex, an EV charging subsidiary, has shown significant growth, with revenues increasing from ?12 crore to ?80 crore in recent years. The company expects Tyrex to achieve a top-line of ?300-400 crore in the next 3 to 4 years, reflecting its strategic importance in the EV charging space.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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