Gulf Oil Lubricants India’s stock saw a significant rise of over 7% on Monday after ICICI Securities initiated coverage on the stock with a ‘Buy’ rating. The shares reached as high as ₹1,076.90 on the BSE.
ICICI Securities has set a target of ₹1,250 per share for Gulf Oil Lubricants India, suggesting a potential increase of 25% from the closing price on Saturday.
Gulf Oil Lubricants India is the second-largest private player in the petroleum lubricant sector, holding around 7-8% market share in automotive and industrial lubricants. Despite the overall lubricant industry slowing down by 0.8% over the last five years, Gulf Oil has shown remarkable volume growth with a Compound Annual Growth Rate (CAGR) of 17.6%.
According to ICICI Securities, the company has displayed resilience and brand strength in the competitive lubricants market, improving market share and margins. With aggressive expansion in distribution infrastructure, brand investments, new product launches, and entry into new segments, Gulf Oil Lubricants is positioning itself for sustained growth in the next 3–5 years.
ICICI Securities predicts consistent positive business growth for Gulf Oil Lubricants from FY24-27, expecting a 6.7% CAGR in volumes for the core lubricant business and a faster 14.7% CAGR for the AdBlue segment over the next three years.
The brokerage firm is particularly excited about the growing demand for Electric Vehicle (EV) fluids and industrial fluids, countering any potential slowdown in traditional vehicle lubricant demand in the long term. The expected surge in demand from the Commercial Vehicles (CV) segment, combined with national road infrastructure expansion and increased industrial activity, is anticipated to drive industry-leading growth for Gulf Oil Lubricants over the next 3–5 years.
While the brokerage factors in an 11.4% Earnings Per Share (EPS) CAGR estimates over FY24-27, it also highlights potential downside risks, including a decline in traditional lubricant demand, execution delays, and competitive pressures.
Gulf Oil’s share price has surged over 20% in the last month, more than 55% in three months, and over 48% year-to-date. Over the past year, Gulf Oil Lubricants shares have witnessed an impressive rally, soaring over 157%. As of 2:00 pm, Gulf Oil shares were trading 6.86% higher at ₹1,067.80 on the BSE.
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