Castrol India slumps and falls

Castrol India is amongst the top losers on the BSE currently, down over 3.5% at Rs.393, closer to its intra day low of Rs.390.60.

The company declared its 2015 and Q4 numbers yesterday. The company showed a 7% (YoY) rise in net profit at Rs.141 crore though sales showed a drop of 8% at Rs.791 crore. The jump in profit can be attributed to the 29% fall in raw material costs, which is crude oil. But this advantage to some extent was diluted due to the falling rupee vis-à-vis the US dollar. And the company ended 2015 with a 30% jump in net profit at Rs.615 crore.

Following this performance, Deutsche Bank cut the target price of the stock from Rs.540 to Rs.495, with a “buy” rating and this could be one of the main reasons why the stock is down in the red today.