#Gulf Oil Lubricants Management Interview 📝🧵
@varinder_bansal @parasbehl7 @sonalbhutra @karansharma_09 @anandchokshi19
@varinder_bansal @parasbehl7 @sonalbhutra @karansharma_09 @anandchokshi19
1/ Business
-Replacement lubricants account for 95% of topline. Lubricants are used in cars, bikes, tractors etc.
-Have usually grown at 2-3x of the market growth rate.
-#2 brand in the overall private market. (55% is B2C)
-Replacement lubricants account for 95% of topline. Lubricants are used in cars, bikes, tractors etc.
-Have usually grown at 2-3x of the market growth rate.
-#2 brand in the overall private market. (55% is B2C)
-Doesn't supply to brand new vehicles, as for new vehicles the oil comes from OEMs.
-Where Gulf has tie-ups with 15 OEMs (Bajaj, Ashok Leyland, Mahindra), so if customers are buying more of Bajaj, Leyland, Mahindra then Gulf will benefit.
-Where Gulf has tie-ups with 15 OEMs (Bajaj, Ashok Leyland, Mahindra), so if customers are buying more of Bajaj, Leyland, Mahindra then Gulf will benefit.
-Sponsors for #CSK. Dhoni has been the brand ambassador for more than a decade.
2/ 1st Quarter
-April was mostly a shutdown month, there were some Agri sales of lubricants.
-Might have some revival during which agriculture was leading the way.
-In June there was a pent up demand in the motorcycle lubricants.
-Overall very low volumes in Q1.
-April was mostly a shutdown month, there were some Agri sales of lubricants.
-Might have some revival during which agriculture was leading the way.
-In June there was a pent up demand in the motorcycle lubricants.
-Overall very low volumes in Q1.
3/ 2nd Quarter
-Have seen a very good pick up in the over all demand.
-They reported 7% volume growth in 2nd quarter. Q2 was 10% better than what they anticipated.
-A lot of the segments have come back quite strongly. In Every region they are seeing pick up.
-Have seen a very good pick up in the over all demand.
-They reported 7% volume growth in 2nd quarter. Q2 was 10% better than what they anticipated.
-A lot of the segments have come back quite strongly. In Every region they are seeing pick up.
-Agri will continue to lead the way. In Agri they have tie ups with Swaraj, Mahindra for Agri lubricants.
-Automotive and industrial business in Q2 did well. Motorcycle was subdued initially but has started improving as the economy opened up.
-Automotive and industrial business in Q2 did well. Motorcycle was subdued initially but has started improving as the economy opened up.
- #Commercial segment: they will have to wait and watch what happens
-#Industrial & #Infra: seeing good pickup, factories have started working and demand is coming up, infra projects have started, cement & metal doing good.
-#Passenger cars demand for lubricants is improving.
-#Industrial & #Infra: seeing good pickup, factories have started working and demand is coming up, infra projects have started, cement & metal doing good.
-#Passenger cars demand for lubricants is improving.
-Margins improved due to lower travel cost and other measures. Cash collection also improved.
-Packaging initially was an issue but that is sorted.
-Distributors are now well equipped with Gulf's stock. Rhythm has come back
-Packaging initially was an issue but that is sorted.
-Distributors are now well equipped with Gulf's stock. Rhythm has come back
4/ Network
-Pan India distribution network
70,000 outlets
300+ automotive distributors
50+ industrial distributors
500+ Infrastructure customers
15+ OEMs
-Pan India distribution network
70,000 outlets
300+ automotive distributors
50+ industrial distributors
500+ Infrastructure customers
15+ OEMs
5/ Product
-Working on products which can reduce the frequency of oil change.
-Going #digital where in customer can order products on an APP.
-Working on products which can reduce the frequency of oil change.
-Going #digital where in customer can order products on an APP.
6/ Key insights
-Ability to pass on increase/decrease in the price of key raw material (base oil) to consumers.
-They have a big #rural network which they started few years ago. That has taken the sales up in the first few months and is continuing.
-Ability to pass on increase/decrease in the price of key raw material (base oil) to consumers.
-They have a big #rural network which they started few years ago. That has taken the sales up in the first few months and is continuing.
7/ Opportunity
-They do not have high share in passenger car motor oils. This can be an opportunity
-They do not have high share in passenger car motor oils. This can be an opportunity
8/ Guidance
-Pent up demand has been continuing. (Even in this month)
-As per their reading, over all the industry volume will contract by double digit this year due to bad Q1.
-In H2 they will try and capture what they have lost in H1.
-Pent up demand has been continuing. (Even in this month)
-As per their reading, over all the industry volume will contract by double digit this year due to bad Q1.
-In H2 they will try and capture what they have lost in H1.
-And will also try and gain some market share from others.
-Expecting to continue 7% volume growth for the next two quarters.
-No capex plans
-Expecting to continue 7% volume growth for the next two quarters.
-No capex plans
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