Gulf Oil Lubricants - A low risk way to play the economic cycle?

Q2 FY24

Volume Growth:
Core lubricant volume for the quarter was 34ml,
AdBlue volume was 30ml,
contributing to a total volume of 64ml for the quarter.
Segment Growth:
Double-digit growth was observed across various segments, including OEM franchise workshops, B2B, and infrastructure.
Distribution showed a double-digit increase in both urban and rural areas.
A strategic partnership with Kia for franchise workshops.
Gross margins improved by nearly 1.8% (41%)
Ebitda margin improved by 3% (13%)
Financial Performance:
Sales 802 cr 11.5% y-y growth
Ebitda 100 cr 25% y-y growth
Pat 74cr 41% y-y growth
cash on the balance sheet 720 CR gross cash as on 30th September


Core lubricants saw a 6.3% increase, reaching 34ml.
Ad blue, showed significant growth of almost 40%, reaching 30ml .
The combined total volume for the quarter was 64ml.

Historical margins of around 17%, the current margin has decreased to 13% due to escalating input costs from past few years.

Base oil is a raw material of lubricant.
Base oil costs are stable; manageable as long as crude oil prices stay within $75 to $85 per barrel.
Base oil comes in different grades (8 to 10), each with its spread to crude oil prices, determining a specific spread is challenging due to the variety of base oil grades.
Base oil is correlated with crude oil prices, but short-term fluctuations in crude prices take one to two months to impact base oil prices.

Holds a 7% plus market share in personal mobility
in CV the market share is 9% plus.
Second position in the private sector, with a 7% estimated market share.

The company has consistently been growing at 2 to 3 times the market rate for over a decade.
In the previous financial year,15% growth in volumes.

OEM business includes various segments, such as factory fill, franchise workshops, dealerships, and aftermarket relationships.
The company has strong partnerships with over 35-40 OEMs.
OEM partnerships vary across different segments, making it challenging to provide precise numbers.

Clarified that rumors about Gulf Oil Lubricants entering the defense business pertain to another entity, Gulf Corporation Limited, which is a separate listed company.

Growth in the lubricant market, projecting a 3% volume and 6% value growth over the next 8 to 9 years, even with the increasing penetration of electric vehicles (EVs).
Objective to achieve 2x to 3x volume growth and outperform market growth rate.
Aiming for an EBITDA margin band of 12% to 14% over time.

Growth trigger for the future:
Acquisition of a 51% shareholding in Tirex Transmission.
Which specializes in DC fast charger manufacturing.
Currently holds 8-10% market share with over 500 installations across India.
Total consideration for the acquisition is INR 103 crores.
Expected completion of the transaction within October.
The opportunity for fast chargers in India is projected to be nearly $1 billion to $1.4 billion by 2030.
Company had a turnover of around 13cr in FY23 & 8cr in FY22.
Customer segments include bus OEMs, PSUs, and retail segments like shopping malls or offices.
expected to have a business of 500 crores plus in five years.
Tirex faces competition both from domestic players and imported charging stations.
Operates on an outright sale model.
Looking for overseas expansion pending necessary certifications.
Specializes in manufacturing high-value fast DC chargers, ranging from 3 lac to 13 lac, utilizing complex technology, limited competition. Indra Renewables (AC slow chargers)

Advertising expenditure for the quarter was around 3.5% of total spending.
The gross working capital has increased from around 105 days to approximately 110 to 112 days due to increase in inventory levels of base oil and finished goods.
Battery revenue for the quarter amounted to approximately 20 crores.
Presently, the company boasts an impressive annual sales volume of around 13.5 lakh batteries.
Battery Buz for revenue target of INR 200 crore in 4-5 years.

AD Blue is described as a supplementary product to the core business of lubricants.
AD Blue is used as an emission control fluid.
ADD Blue has single-digit margins.

Not to disclose specific realization figures for AD Blue and Core Lubricant.
Close to 95% to 100% capacity utilization in both the plants in this quarter.

Personal Mobility (motorcycles and cars) contribute 23% of the company’s total revenue in this Q.
Commercial vehicles contribute 38% of the company’s total revenue in this Q.
The share of commercial vehicles stayed in the range of 38% to 42%.
The share of Personal Mobility stayed in the range of 21% to 23%.

One of the primary reasons for the increase in other expenses in the Q is higher freight costs.
The rise in AdBlue volumes leading to increased freight expenses.
As the company scales up AdBlue volumes, the associated freight costs also increase.
Another significant factor to the increase in other expenses is higher advertisement costs.

Gulf Oil’s factory fill business, constituting less than 10% of total volume, is indirectly linked to new vehicle sales.
Stronger quarters are Q3 and Q4, with increased activity post-monsoon and during festival seasons.


This might be a stupid question but please help me here that when the management says that Tirex would have a 10% share in EV DC chargers market by 2030 which is 100k chargers , average cost of charger being 7lakhs , the math for the revenue comes out to be 7000Cr and considering that as income from associate the company’s share would be 51% of the same , but their guidance is 500Cr . What am I missing ?


What the management has said is that the fast charger market is expected to be more than INR 10,000 crore to INR 12,000 crore by FY 2030. So if Tirex can continue to maintain their share of 8 % to 10 %, Tirex revenue at the lower end would be Rs.1000 crore in FY2030.

And at 51 % stake, that is Rs.500 crores. Note that Tirex will be making 240 kW chargers, these cost upwards of Rs.20 lac to 30 lac per piece based on a google search for similar products.

Electric Vehicle (ev) Super Fast 240 Kw Dc Charger at 3128160.00 INR in Pune | Hmv Products Global (

Truck Exicom 240 kW EV DC Charger, For Buses,Trucks And Cars at Rs 2130000 in Thane (

So assuming an average of Rs.25 lac per piece, you will need to sell about 4,000 chargers to make Rs.1,000 crore revenue for the company. Now whether this pricing will hold is anybody’s guess. In any case, more recently the company seems to have broad-based their plans since the MoU signed with the Government of Gujarat mentions producing 10,000 chargers annually. We will have to wait for the next concall to get additional details on this I think.

Tirex Chargers and Government of Gujarat Ink MoU for One of the Largest EV DC Charger Manufacturing Plants in India (


Yes I read about the Tirex - Gujarat Government MoU through Tirex’s LinkedIn space , what sort of revenue do you expect company might get from EV fluids from B2B and B2C market and by 2030 how sort of growth can we expect in V2G charging ? I think Tirex seems to be the only major growth driver for the company but I am interest to stay invested because I like the company’s consistancy and foresight , they have been trying to generate more revenue from battery segment since 2018.

With the rise of data centers, there is going to be an inherent need for better cooling systems. From what I have been reading, the traditional method of air-cooling will be replaced with liquid cooling systems as they are more cost effective, consume much less power and help in better overall performance. With this in mind, do we know if GOL has any plans to enter this specific segment? For instance, Castrol’s ON immersion cooling fluids have been developed to meet the needs for exactly this i.e. data centre, edge computing etc.


Nothing concrete , this was been asked about in Q4 concall to which Mr Ravi Chawla said data center being the buzzword “can be though about” which basically means - no pen to paper progress uptil now.


As per Mr Ravi Chawla data center cooling isn’t a very large market , the volume estimation is very low as per him - small niche market . Do not expect a large contribution from the same.