Castrol India PAT falls 23% YoY to ₹176 Cr as raw-material costs slash EBITDA margin to 15%

Castrol India's Q2 FY27 (quarter ended 30 September 2026, standalone — the company reports no consolidated figures) print shows revenue from operations up 27.3% YoY to ₹1,734.72 Cr, but profit after tax down 22.6% YoY to ₹176.37 Cr. Sequentially the swing is sharper: PAT nearly halved, down 49.3% QoQ from ₹347.70 Cr, as the margin strength of Q1 FY27 (EBITDA margin 26.4%) reversed completely. The driver sits squarely on the cost line: cost of raw and packing materials consumed jumped 70.8% YoY to ₹1,085.86 Cr, far outpacing the 27.3% revenue growth, pushing the raw-material ratio to 62.6% of revenue from 46.7% a year ago and 50.2% last quarter. EBITDA (PBT excluding other income, plus finance cost and depreciation) fell 18.8% YoY to ~₹262 Cr despite the higher revenue base, taking the EBITDA margin to ~15.1% — down from 23.7% YoY and 26.4% QoQ, and below the company's stated 21-24% structural range. There were no exceptional items in either this quarter or the year-ago quarter, so the YoY PAT decline is a clean, unadjusted comparison. Management had flagged this outcome at the Q1 call in August: prior guidance explicitly warned "Q3 expects significant commodity inflation impact and margin pressure," with low-double-digit pricing actions already taken and more pricing possible "if raw material/FX deteriorates further." That is what played out — MD Saugata Basuray called it a "quarter marked by a sharp rise in raw material costs and adverse currency movements," where early pricing action only "helped moderate" the impact, while CFO Mrinalini Srinivasan reiterated the company will "act with agility to manage margin pressures through pricing and cost actions." Against our pre-result preview, which set the bar at revenue of ₹1,850-1,950 Cr, EBITDA margin of 21-24%, and high-teens YoY PAT growth, the quarter missed on all three counts. The industrial business kept double-digit volume growth and the outlet network expanded to ~1,67,000 (46k rural), but neither offset the commodity/FX hit. Separately, the board approved Price Waterhouse Chartered Accountants LLP as statutory auditor for a five-year term from the 49th AGM, replacing Deloitte Haskins & Sells LLP under mandatory rotation — unrelated to the quarter's financial performance. Nine-month FY27 PAT is still up 8.6% YoY at ₹766.25 Cr on 20.3% YoY revenue growth, so the broader trend remains positive, but Q2's margin breach below the guided 21-24% range raises the bar for Q4 to show the compression is transient. The checkpoints into next quarter are whether further pricing action restores margin toward the structural range, and whether industrial volume momentum can offset continued commodity/FX pressure.