Castrol India Face Value - Rs 10 Buy Rs 287

Ticker: 500870 Equity: Rs 123.64 crore H/L: Rs 376/190

Castrol India (CIL) which is a subsidiary of Castrol UK, has
recently posted a splendid performance in Q1CY08, where
the company posted a topline of Rs 492.90 crore and
bottomline of Rs 72.80 crore as against Rs 442.10 crore and
Rs 41.50 crore respectively for Q1CY07.

The most important fact to be noted here is, even in the
scenario rising crude prices, CIL has managed to improve its
EBITDA to 23 per cent from the earlier levels of 14.50 per
cent. This clearly shows that the company has managed to
pass on the cost to its client through its value Added
products.

Going ahead, we feel CIL is expected to get benefited from
its parent company as several global automobile OEM's are
entering the Indian market with new technology and hence
with that good company is expected to grab good pie from
the market.

On the valuation front, the CMP of Rs 287 discounts its
CY08E earnings by 10.58x which gives the Scrip some scope
for upward movement and hence we recommend the
investors to buy the scrip at current levels with a target price
of Rs 400 in next one year.
(karvy consultants)