LIC-Backed Energy Stock Okays Rs 4.50/Share Final Dividend: Buy?

In the energy sector, Castrol India Limited is a large-cap firm. Castrol India Limited is a manufacturer of lubricants for industrial and automobile applications. The financial results for the quarter that ended on December 31, 2023, have been released by the corporation, along with a dividend payment for eligible shareholders.

Castrol India Dividend

The Board of Directors "recommended final dividend of INR 4.50/- per equity share of the face value of INR 5/- each for the financial year ended 31 December 2023 subject to approval by the Shareholders at the 46th Annual General Meeting; fixed Thursday, 21 March 2024 as the record date for determining entitlement of members to final dividend for the financial year ended 31 December 2023. The dividend, if approved by the Shareholders will be paid on or before Friday, 26 April 2024," said Castrol India in a stock exchange filing.

Castrol India Results

With Revenue from Operations of Rs 1264 Crores for the 4Q of 2023 (October to December), the Company saw a 7% increase over Rs 1176 Crores in the 4Q of 2022. Profit Before Tax for the fourth quarter of 2023 was Rs 324 crores, up 31% from Rs 248 crores in the same period the previous year. With a 25% increase from Rs 193 Crores in 4Q 2022 to Rs 242 Crores in 4Q 2023, the profit after taxes climbed.

Sandeep Sangwan, Managing Director, Castrol India Limited, said, "In 2023, we navigated strategic landscapes with precision, driving robust top- and bottom-line growth by deftly balancing volume, margin, and unwavering cost management. Our bonds with the trucking community, auto dealers, and consumers strengthened, fueled by the triumph of the #BadhteRahoAagey campaign-an anthem of empowerment for the trucking sector. Pragati Ki Paathshaala, our ongoing on-ground initiative, aspires to be the heartbeat of skill development and entrepreneurship among truckers nationwide."

"In the realm of two-wheelers, Castrol POWER1's 'India's ULTIMATE Motostar' sought to discover the nation's top motorsports talent. As for four-wheelers, our Castrol Auto Service centers, now totaling 450+, provided reliable service across India. Expanding our reach into rural Bharat, we enhanced product availability to 32,000 outlets deep in the hinterland. The launch of our auto care products gained momentum, now accessible in 21,000 outlets and embraced by trade and consumers alike. Direct consumer outreach, especially through e-commerce platforms, has yielded a positive impact," he added.

Deepesh Baxi, Chief Financial Officer, Castrol India Limited said "In 2024, we will boldly navigate through challenges and capitalise on opportunities. Despite economic uncertainties, we see steady inflation and a positive shift in consumer confidence. Our focus on resilient manufacturing remains unwavering, with a keen eye on global risks. We move ahead with confidence, investing in our brands and innovations. Castrol is well-positioned to thrive, embracing smart factories and adapting to evolving market trends."

"Building on strong financial performance and marking significant milestones of 125 years globally and 115 years in India, the Company's Board of Directors recommended a final dividend of Rs 4.50/- per equity share of the face value of Rs 5/- each for the financial year ended 31 December 2023 subject to approval by the Shareholders at the 46th Annual General Meeting. This takes the total dividend for 2023 to Rs 7.5/- per share. This distribution reflects the Company's appreciation for the ongoing support of its shareholders throughout its 40 years as a publicly listed entity," said Castrol India in a stock exchange filing.

Castrol India Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said CASTROLIND is presently trading at Rs 198, with the stock price fluctuating in the range of 188 to 208. It is anticipated to remain sideways within this range. If the price breaches the 207 level, there is potential for it to further ascend to the 220-222 level in the short run, while support is observed near the 185 level.

The Relative Strength Index (RSI) is currently at 62 and is trending upward, indicating a significant sideways movement.

The overall trend for CASTROLIND is bullish, supported by various technical indicators, reinforcing the optimistic outlook. Given these signals, there is a possibility for the stock to achieve a target price of Rs 222 in the near term.
It is advisable to consider buying on dips, particularly around Rs 195, to capitalize on potential retracements in the stock price. To prudently manage risk, implementing a stop-loss (SL) at Rs 185 is recommended. This precautionary measure is crucial to safeguard investments in the event of an unexpected market reversal.

Castrol India Shareholding

As per the shareholding pattern of the company for Q3FY24, insurance giant LIC held 11,16,89,381 equity shares which is 11.29% of the total fully paid-up share capital of Castrol India.

Disclaimer

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