800% Payout: Small-Cap Stock Declares Rs 16/Share Dividend; Buy?

As of Tuesday's closing session, Gulf Oil Lubricants India Ltd. has a market capitalization of Rs 4,368.51 Cr, making it a small-cap lubricant firm. Gulf Oil Lubricants India Limited (GOLIL) is a firm that produces synergy products and lubricants for both automotive and non-automotive use. GOLIL is an Indian company that belongs to the Hinduja Group. Financial results for the quarter ending December 31, 2023, and an interim dividend of 800% for FY24 have been released by the corporation.

Gulf Oil Lubricants India Dividend

For the fiscal year that ends on March 31, 2024, the company's Board of Directors has announced an interim dividend of Rs. 16/-per equity share with a face value of Rs. 2/-each (800%). Tuesday, February 13, 2024 has been fixed as the record date for the purpose of dividend, as per a regulatory filing.

Gulf Oil Lubricants India Financials

The company's revenue from operations for the quarter ended December 31, 2023, was Rs. 817.26 crores, up 4.63% from Rs. 781.10 crores. The company's net profit stood at Rs. 80.74 crores against Rs. 62.65 crores, growth of 28.86% compared to the Quarter ended December 31, 2022, representing a growth of 28.86% YoY. Its EBITDA reached Rs 111.06 Cr in Q3FY24 up by 23.38% YoY from Rs 90.02 Cr in Q3FY23 whereas the EBITDA margin stood at 13.59% compared to 11.52% in the year-ago quarter.

Commenting on the performance, Mr. Ravi Chawla, Managing Director & CEO, Gulf Oil Lubricants India Ltd., said, "I am quite excited by the new milestones being achieved by the team with another remarkable performance delivered for December quarter and nine-month period, reinforcing our dedication to continuous growth and operational excellence.

Our success spanned various categories, capitalizing on robust distribution and brand initiatives. Our key focus remains on strategic, sustainable, and profitable growth across our portfolio. This quarter witnessed a significant elevation in brand investments with activations such as IBW, CII's Excon exhibition, new TVCs, and campaigns with brand ambassadors that amplify brand awareness levels and increase market share in our targeted segments."

"Our strategic partnership with India Bike Week (IBW), targeting premium bike owners with Gulf Syntrac engine oil, has taken root across Indian cities, catering to both metros and Tier 2 cities. The introduction of "Ride With Gulf" social media page enhances our engagement with the passionate motorcycle riding community nationwide. In a series of Sustainability Initiatives, we will enhance our solar power capacity at both the plants by June/July'24 and also looking at various sustainable packaging solutions.

We participated in CII's Excon exhibition where we showcased our innovative products, including Adblue, biodegradable hydraulic oils, and EV charging solutions via Tirex DC chargers and Electreefi, a SaaS provider, gaining significant attention. We maintain a positive outlook, anticipating market demand to keep growing in coming years due to strong GDP growth, significant infrastructural impetus, and increased vehicle penetration," he further added.

Manish Gangwal, CFO, Gulf Oil Lubricants India Ltd commented "Benefiting from a stable input cost environment and ongoing efforts to enhance our product mix across categories, our material margins have improved by over 5% on a YoY basis. This has translated into a highest ever quarterly EBITDA of Rs. 111 crores, firmly positioning us at 13.59% EBITDA to Revenue. Consequently, our earnings have witnessed substantial growth, marking a 29% and 31% increase for the quarter and nine-month period, respectively, compared to last year. Drawing a lot of confidence from the performance, the Board has declared an Interim Dividend of Rs 16.00 per equity share, amounting to 800% on the Face Value of Rs. 2 per Share."

"Going forward, our strategic focus remains twofold: achieving revenue growth surpassing market trends by 2-3x, coupled with improving margin trajectories. Furthermore, we are committed to leveraging our investments in the e-Mobility space, capitalizing on synergies for sustained and impactful future growth," he further stated.

Gulf Oil Lubricants Share Price Target

Gulf Oil Lubricants is bearish and very overbought on the Daily charts with strong resistance at 935. Investors should book profits at current levels as a Daily close below support of 812 could lead to a target of 705 in the near term, said AR Ramachandran from Tips2trades.

Disclaimer

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