Castrol India Q3 FY26 Results (NSE: CASTROLIND)
Signal: Margin pressure
The read
The trajectory has inflected from Q2's 26.4% margin to approximately 15.1% in Q3: revenue still grew 27.3% YoY to ₹1,734.72 crore, but raw-material and inventory costs rose to 63.5% of revenue from 50.0%, driving EBITDA down 19% to ₹262 crore and PAT down 22.6% to ₹176.37 crore; pricing actions moderated rather than absorbed the commodity shock.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,734.72 Cr | +27.3% | -7.3% |
| Net profit | ₹176.37 Cr | -22.6% | |
| EPS | ₹1.78 | -22.6% | |
| EBIT margin | 15.1% |
P&L walk
Standalone revenue increased 27.3% YoY to ₹1,734.72 crore, but material-cost inflation lifted raw-material and inventory costs to 63.5% of revenue from 50.0%, compressing gross margin to 36.5% and EBITDA margin to 15.1%; PAT fell 22.6% to ₹176.37 crore.
Key positives
- Revenue from operations rose 27.3% YoY to ₹1,734.72 crore, with pricing actions helping offset part of the high double-digit commodity-cost inflation.
- Nine-month revenue reached ₹5,151 crore, up 20% YoY, while nine-month EBITDA rose 11% to ₹1,086 crore.
- Industrial business volume delivered another quarter of double-digit growth, and distribution expanded to approximately 1,67,000 outlets, including 46,000 rural outlets.
- EPS declined 22.6% YoY to ₹1.78, matching PAT growth and showing no dilution-related divergence.
Key concerns
- Gross margin compressed approximately 1,330bps YoY to 36.5% as raw-material and inventory costs increased to 63.5% of revenue from 50.0%.
- EBITDA fell 19% YoY to ₹262 crore and EBITDA margin declined approximately 897bps to 15.1%, showing that pricing actions did not fully pass through the commodity-cost increase.
- PAT declined 22.6% YoY to ₹176.37 crore despite 27.3% revenue growth, indicating substantial cost absorption during the quarter.
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