CASTROL INDIA LTD - Quantamental Equity Research

Quantamental Equity Research on CASTROL INDIA LTD | Release: 07 Feb 2019 14:40:46 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:CASTROLIND and BSE CODE:500870
Last Close:  INR 149.95
Fair Value:  INR 121.5
Est. Price by Dec 18:  INR 230.45
Market Capitalization (INR Crs):  14831.89
Industry:  Oil Marketing & Distribution
Rating:  STRONG BUY
Upside:  54%
Company Profile
Castrol is the world leading manufacturer, distributor and marketer of premium lubricating oils, greases and related services to automotive, industrial, marine, aviation, oil exploration and production customers across the world.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 6% 32% 34%  
EBIT % 3% 47% 60%  
Earnings % 3% 46% 55%  
Book Value %  4% 105% 57%  
Stock Total Return %  -4% -24% 24%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 51.00  
(B) FII/FPI 8.97  
(C) DII/Insurance Companies 18.49  
(D) Public holding < 2 lakhs of cap. 13.74  
(E) Others 7.80  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17  Dec-18 E   Dec-19 E   Dec-20 E   Dec-21 E   Dec-22 E   
Price 76 111 107 153 150 250 215 197 190 230 252 272 291 306  
Return on Equity 77% 89% 80% 69% 68% 96% 107% 68% 68% 68% 70% 72% 73% 72%  
Price to Earning  17.3 22.3 22.0 50.6 43.7 52.2 34.5 29.1 27.1 31.2 31.2 31.2 31.2 31.2  
EVTI 2.8 4.0 3.5 7.1 6.8 7.2 6.3 5.6 5.1 5.7 5.8 5.8 5.9 5.9  
EVTIFM 17.3 22.3 22.0 50.6 43.7 52.2 34.5 29.1 27.1 31.2 31.2 31.2 31.2 31.2  
Price to Book Value 13.3 19.8 17.5 34.9 29.6 49.9 36.9 19.9 18.4 21.2 22.0 22.5 22.7 22.6  
Debt to Equity  0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0  
Dividend Yield 5% 3% 4% 2% 2% 1% 2% 3% 4% 3% 3% 3% 3% 3%  
Cash Flow to Firm 54% 22% 23% 7% 8% 7% 7% 5% 5% 4% 4% 4% 4% 4%  
Detailed Estimates
Title Dec-17 Dec-18 E Dec-19 E Dec-20 E Dec-21 E Dec-22 E  
Sales       3,584.32       3,904.62       4,215.12       4,508.84       4,778.65       5,017.58  
EBITDA       1,116.77       1,155.11       1,246.96       1,333.85       1,413.67       1,484.35  
EBIT       1,071.27       1,105.54       1,209.92       1,306.16       1,392.97       1,468.89  
PBT       1,070.07       1,105.54       1,209.92       1,306.16       1,392.97       1,468.89  
NPAT          691.81          729.77          798.67          862.20          919.50          969.61  
Price to Earning             27.11            31.23            31.23            31.23            31.23            31.23  
Price to Book Value            18.38            21.21            22.00            22.48            22.68            22.62  
Debt to Equity                  -                   -                   -                   -                   -                   -    
Return on Equity              0.68              0.68              0.70              0.72              0.73              0.72  
Enterprise Value to Total Income (EVTI)              5.11              5.70              5.78              5.82              5.85              5.87  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            30.80            35.38            35.35            35.32            35.29            35.26  
Price or Est. Share Prices          189.60          230.45          252.25          272.35          290.50          306.35  
DISCOUNTED CASH FLOW
Title Dec-18 E Dec-19 E Dec-20 E Dec-21 E Dec-22 E  
PBT       1,105.54       1,209.92       1,306.16       1,392.97       1,468.89  
Interest                 -                   -                   -                   -                   -    
Depreciation            49.57            37.05            27.69            20.70            15.47  
Cash Flow Before Tax       1,155.11       1,246.96       1,333.85       1,413.67       1,484.35  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax          762.49          823.12          880.48          933.16          979.82  
Terminal Cash Flow                                                                                    -       15,658.25  
Total Cash Flow          762.49          823.12          880.48          933.16     16,638.07  
Present Value of Cash Flow     12,016.67  
Debt                 -    
Value of Equity     12,016.67  
Fair Value Per Share          121.50  
Equity          14,832
Debt                   0
Beta Take from Reuters 0.63
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                   1
Tax Benefit                   0
Interest Net of Tax                   1
Debt                   0
Cost of Debt 0%
Cost of Equity 12%
Debt Weight 0%
Equity Weight 100%
WACC 12%
Cash Flow of Dec-22 E          979.82
Growth 5.0%
Present Value of Terminal Cashflow     15,658.25
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Tata Chemicals           594.40          15,143          444.96              9.22            11.38              1.18            17.82              1.34              7.83              0.55              3.70              7.10              6.05          11,759            30.63               136            -4.35            10.02          -31.78          -65.94          867.74
   2  Pidilite Inds.        1,125.00          57,147            72.82            30.19            37.64              7.43            71.70            15.45            61.19              0.03              0.53            20.63            29.08            7,522            69.76               305              5.17            19.79            -5.25            -8.49          173.54
   3  Guj Fluorochem           856.25            9,410          483.80            56.54              7.94              1.76              4.66              1.77            13.09              0.42              0.41            47.96            36.07            6,076            68.33                 22              8.80            69.00          269.23          584.88          854.58
   4  Castrol India           149.95          14,832            10.31          105.59          105.28              3.32            18.38            14.54            20.94                 -                4.67            -0.09            -0.07            4,236            51.00                 80            11.49              6.50            40.89              7.73            40.75
   5  Godrej Inds.           493.30          16,594          124.72            17.65              9.33              1.63        -570.17              3.96            37.77              1.76              0.35            15.19            18.13          11,528            74.72             -136          -13.43            14.76            72.24            72.13          192.97
   6  Aarti Inds.        1,613.00          13,114          207.10            45.33            16.30              2.97            22.62              7.79            30.53              1.35              0.06            44.16            51.63            5,074            52.74                 99            -2.41            28.07              7.92            47.08          496.21

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