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Pricing Resilience and Market Share Gains Properl Growth:

As highlighted in our initiation report, Gulf Oil Lubricants (GOLI) continues to balance aboveindustry volume growth with improving profitability, leveraging premiumisation, a favourable product mix and disciplined pricing.GOLI demonstrated a strong earnings resilience amid input cost inflation, maintaining an EBITDA margin of 11.8% through effective pricing and cost management. Revenue growth was largely volume-led, with 16% YoY volume growth, supported by proactive measures to ensure uninterrupted product availability and supply security during the crisis. The company's expansion across 12 of its 15 operating segments has strengthened its competitive positioning, translating into sustained market share gains and growth nearly 2–3x the industry average of 3–4%.Looking ahead, we expect brand-led distribution expansion, strong B2C traction and continued market share gains to underpin above-industry volume growth. Sticky retail pricing and operating discipline projected to support profitability, while prudent treasury management and timely price adjustments help mitigate nearterm FX volatility. We believe these structural advantages position GOLI to sustain its growth premium over the average growth in the lubricants industry while maintaining healthy margins over the medium term.

Overhang of EV penetration:

GOLI has strengthened its presence in the EV charging ecosystem through its 65% stake in Tirex. With nearly one-third of India's electric buses using Tirex fast chargers, the business offers significant growth potential. We estimate the segment to generate INR 3–4 Bn in revenue over the next few years, contributing ~10% to GOLI's topline at EBITDA margin of 12–14%.

Q2FY27 Review: EBITDA beat, PAT in line with CIE estimate

* Revenue was up by 44.2% YoY and 4.5% QoQ at INR 13,794 Mn (vs CIE estimate of INR 11,015 Mn)

* EBIDTA was up by 37.4% YoY and down by 4.5% QoQ at INR 1,627 Mn (vs CIE estimate of INR 1,421 Mn). EBITDA margin stood at 11.8%, contracted by 58 bps YoY (vs CIE estimate of 12.9%)

* PAT was up by 34.5% YoY and down by 8.1% QoQ at INR 1,172 Mn (vs CIE estimate of INR 1,161 Mn). PAT margin contracted by 61 bps YoY, reaching 8.5% (vs CIE estimate of 10.5%)

Capacity Ramp-up to Support Volume Growth: GOLI aims to increase its capacity, from 140,000 to 240,000 KL, by FY27. The additional capacity in Chennai is expected to come online by Q3FY27, while Silvassa facility anticipated to ramp up by Q1FY28

View and Valuation:

We have retained our target price of INR 1,525 and revised our FY27 EPS estimate upwards by 14.5%. We value the company using the DCF framework and derive a TP of INR 1,525/sh, implying PE multiple of 12.0x/9.9x at FY28E /FY29E EPS. We retain our ‘BUY’ rating on the stock.

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SEBI Registration no.: INZ 000160131