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Another investment into EV Space

Gulf Oil Lubricants India has recently announced to acquire 51% stake in Tirex Transmission for Rs 1030mn. Tirex based in Ahmedabad is working on DC fast chargers and currently has over 400 charges installed for customers such as NTPC, HPCL, PowerGrid and Electra. This is Gulf Oil Lubricant’s third investment in the EV charging space after investing in Indra Renewables which is in AC & bidirectional charging and in ElectreeFi which is a SaaS provider having expertise in implementation of IoT based e-mobility solutions. Gulf Oil Lubricant is envisaging Revenue of more than INR 5bn from Tirex in next 5 - 6 years from India market. For Battery business have plans to grow at ~20% CAGR for next 5 years and revenue of Rs 2bn. Core lubricant business to incur Rs 200mn capex each year for next 3 years. The focus is to remain primarily on growth of Lubricants and additional investment opportunities being evaluated where it has synergies and its existing network, brand and partnerships can be leveraged.

* Tirex Transmission Private Limited: Tirex based in Ahmedabad is working on DC fast chargers for last 5 years and currently has over 400 charges installed for customers such as NTPC, HPCL, PowerGrid and Electra, Kerala State Electric Board, etc. Revenue for FY22: 79.4m, FY23: 132.6m. Gulf Oil Lubricant has strategically invested in Tirex where it will be supporting the founder team lead by Arth Patel. Deal is expected to close in next quarter. Approximately 2/3 of the amount that would be invested in Tirex Transmission has been earmarked for improving operations, capacity upgradation and R&D. As per India Energy Storage Alliance, the demand for chargers will surge to 1m units out of which approximately 15% is expected to be fast DC chargers. DC fast charger market is growing at fast pace globally and can pose further opportunities for Tirex. Tirex currently holding around 8% of the market share and aims to maintain a 10% share in this rapidly growing market.

* Indra Renewables: Gulf Oil Lubricants India holds 7.5% stake in the company. Gulf Oil International holding has increased to majority recently. It is situated in UK and engaged in the business of AC chargers. It is pioneering in bidirectional charging enabling control of the flow between EV, home & Grid. Trials are currently running in India to suit the needs of consumers and requirement of vehicles in India.

* Battery: The revenue from Battery segment it registered was Rs 160m in Q1FY24. It forayed into two-wheeler batteries 8 years ago. It is in replacement market with its valve regulated lead acid batteries. Annual volumes sold were 1.35m batteries through its network of 12,000 touchpoints across the country. These batteries are currently imported, while work is on for localization of the batteries manufacturing. Once manufacturing is localized, margins will improve. Gulf Oil has market share of around 3%. Ambitious plans to grow by ~20% CAGR for next 5 years and reach Revenue of Rs 2000m.

* Lubricants: The current market share is of ~6-7%. Annual capex that will be incurred is around Rs 250m. Gulf Oil Lubricant has been growing its market share at 2-3x the industry which is growing at 2-3%. The Adblue volumes have been growing at faster pace as it is mandatory for BS VI vehicles 

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