Buy Castrol India, target price Rs 170: Motilal Oswal

Motilal Oswal has given a buy rating to Castrol India with a target price of Rs 170. The share price moved down by 0.78 per cent from its previous close of Rs 115.85. The stock’s last traded price is Rs 114.95.

Castrol India Ltd., incorporated in the year 1979, is a Mid Cap company (having a market cap of Rs 11369.96 Crore) operating in Petrochemicals sector.

Financials
For the quarter ended 30-09-2020, the company reported a Standalone sales of Rs 849.20 Crore, up 73.09 % from last quarter Sales of Rs 490.60 Crore and unchanged .00 % from last year same quarter Sales of Rs 849.20 Crore Company reported net profit after tax of Rs 188.40 Crore in latest quarter.

Investment Rationale
The stock trades at 15x CY21 EPS of INR7.7 and EV/EBITDA of 9.7x. On a oneyear forward P/E basis, the stock trades at ~34% discount to its LT P/E average of 27.4x.

Promoter/FII Holdings
Promoters held 51 per cent stake in the company as of June 30, 2020, while FIIs held 11.5 per cent, DIIs 18.7 per cent and public and other 18.9 per cent.