Emkay Global Financial is bullish on Gulf Oil Lubricants India has recommended buy rating on the stock with a target price of Rs 1000 in its research report dated May 31, 2021. GOLI / EBITDA / PAT revenue increased by 44% / 41% / 66% increased by 7% / decreased by 6% / decreased by 7% collection to Rs5.17bn / 781mn / 598mn on Q4FY21 – 4% more / in line / 1% below our estimates.
The 7% volume stroke was subtracted equally from EBITDA / ltr as the absolute limit was weakened. The sales volume of the Lube increased by 39% yo / 6% collectively to 35.0mn ltr, driven by improved demand in all sectors due to better economic activity. B2B, OEM and industry sold record sales in Q4, but although improved human mobility was below pre-Covid levels. Net recognition increased by 1% collection to Rs147.8 / ltr but was 3% miss, while unit COGS increased by 11%.
Total margin decreased by 9% collection to Rs63.6 / ltr (7% miss). Unit opex decreased by 16% yoy / 8% collection to Rs41.3 / ltr (7% below est.). EBITDA / ltr entered Rs22.3, down by 12% collection / up 1% yoy.
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Vision
We cut FY22 / 23E EPS by 3% / 2%, we built 6% / 8% low EBITDA / ltr, partly removed by 1% / 4% price increase. We keep multiple 20x targets (Mar’23E EPS) due to consecutive line limitations. We reduce TP by 2% to Rs1,000 and repeat Buy.
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