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Margin Strength Sustained Through Timely Price Increases: GOLI is strategically shifting its product portfolio towards high-margin premium segments to drive volume growth and protect profitability simultaneously. Through aggressive expansion across 12 of its 15 operating segments, the company continues to gain market share. We derive this from the fact that GOLI is expanding at nearly 2–3x the average industry rate of 3--4%, thereby increasing its share in the overall lubricants market. As acknowledged by the management, there is going to be more of B2C business going forward. In our opinion this will support margin expansion in two ways (a) GOLI will be able to leverage on the brand it has built over the last decade as higher B2C business magnifies branding impact of A&P expenses as compared to B2B business, (b) it will be able to exercise pricing leverage, wherein average realised price can be increased through product mix, hikes and schemes even during the period of declining base oil prices as demonstrated by the firm previously. FX volatility has remained a headwind for GOLI; however, the company is proactively managing currency risk through expert supervision, while a favourable industry pricing environment allows timely price hikes to safeguard margins.

Overhang of EV penetration: GOLI has reinforced its strategic entry into the EV supply chain by increasing its stake from 51% to 65% during last fiscal year by investing INR 380 Mn. Tirex gained 35% to 40% share of the new DC chargers' market in the electric bus segment during FY26. We estimate this optionality could scale up to INR 3–4 Bn revenue, adding ~10% to the topline, with an EBITDA margin of 12–14%, in the next few years.

View and Valuation: We have revised our target price to INR 1,525 as we now assume higher risk-free rate of 6.7%, lowered perpetual growth rate of 1% and revised our FY27 EPS estimate downwards by 1.1%. We value the company using the DCF framework and derive a TP of INR 1,525/sh, implying PE multiple of 12.9x/11.0x at FY28E /FY29E EPS. We reaffirm our BUY rating on the stock.

Q4FY26 Review: Revenue and EBITDA beat to CIE estimates while PAT trails

* Revenue was up by 13.7% YoY & up by 4.2% QoQ at INR 10,402 Mn (vs CIE estimate of INR 9,246 Mn)

* EBIDTA was up by 8.5% YoY & up by 3.7% QoQ at INR 1,351 Mn (vs CIE estimate of INR 1,208 Mn). EBITDA margin stood at 13.0%, contracted by 62 bps YoY (vs CIE estimate of 13.1%)

* PAT was down by 1.7% YoY & down by 9.8% QoQ at INR 900 Mn (vs CIE estimate of INR 1,151 Mn). PAT margin contracted by 136 bps YoY, reaching 8.7% (vs CIE estimate of 12.4%)

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 will ramp up by Q4FY27.

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