For a company dependent on imports to flourish in the current scenario, where the rupee is sliding and the economy is slowing, is a tough challenge. However, Castrol India has done that by improving profit margins over the past few quarters.
The company has been facing several challenges. Its sales volumes are under pressure due to the slowdown in the OEM and non-automotive segments. It imports all of its raw material, base oil, which is getting costlier as the rupee depreciates and crude oil prices remain strong.
The company is focusing on strong marketing programmes targeted at consumers, trade and other stakeholders to drive sales. And it has achieved results, with volumes in the personal vehicles segment, especially twowheelers, growing. This, along with the launch of new technology products, has enabled it to pass on a part of the costs to consumers. With tight control over other costs, Castrol has improved margins in the first half of 2013.
In spite of the resilience it has shown so far, the going will be tough. In a weak demand scenario, it has only limited ability to pass on the cost increases to its consumers without hurting demand. Yet the company has the potential to surprise on the positive side.
The company has been facing several challenges. Its sales volumes are under pressure due to the slowdown in the OEM and non-automotive segments. It imports all of its raw material, base oil, which is getting costlier as the rupee depreciates and crude oil prices remain strong.
The company is focusing on strong marketing programmes targeted at consumers, trade and other stakeholders to drive sales. And it has achieved results, with volumes in the personal vehicles segment, especially twowheelers, growing. This, along with the launch of new technology products, has enabled it to pass on a part of the costs to consumers. With tight control over other costs, Castrol has improved margins in the first half of 2013.
In spite of the resilience it has shown so far, the going will be tough. In a weak demand scenario, it has only limited ability to pass on the cost increases to its consumers without hurting demand. Yet the company has the potential to surprise on the positive side.
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