Castrol India (CASTROLIND)
StalwartFairStock Score: 69/100 — STEADY
Score breakdown: P/E: 2/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 1/1
Key Financials
| Current Price | ₹186.82 |
| Market Cap | ₹18,478.78 Cr |
| P/E Ratio | 17.43 |
| ROCE | 60.27% |
| ROE | 57% |
| Dividend Yield | 6.69% |
| Profit Growth | 42.1% |
| Debt/Equity | 0.03 |
| Sales Growth | 25% |
| Free Cash Flow | ₹1,288.87 Cr |
| Promoter Holding | 51% |
| 52-Week Range | ₹170.1 — ₹210.75 |
| Sector | Petroleum Products |
| Book Value | ₹19.27 |
Strengths
- Exceptional profitability with ROE of 49.99% and ROCE of 60.27%
- Virtually debt-free balance sheet (D/E 0.03) with strong free cash flow of ₹1,289 Cr
- Attractive dividend yield of 4.68% supported by hefty cash generation
- High promoter holding of 51% aligning interests with minority shareholders
- Financially safe: Piotroski F-Score 7/9 and Altman Z-Score 6.81
Concerns
- Very modest growth: profit up only 2.45% and sales up 6.65%
- Rich valuation: P/E 19.29, P/B 9.57, PEG 9.05, leaving no margin of safety
- Price far above Graham Number (₹64.42) and DCF value (₹94.16)
- Negative EV/EBITDA of -61.68 is a red flag, though likely due to low interest burden; still needs scrutiny
AI Analysis
Castrol India is exactly the kind of business I admire from the outside but cannot buy at today's price. The lubricant franchise is a solid stalwart, with a powerful brand, wide distribution, and an extraordinary return on equity of nearly 50%. ROCE at 60% confirms that management deploys capital efficiently, and with a debt-to-equity of just 0.03, the balance sheet is rock solid. It throws off ₹1,289 crore in free cash flow and pays a handsome 4.68% dividend, supported by a 51% promoter stake. The Piotroski score of 7 and Altman Z of 6.81 also confirm financial strength. But Benjamin Graham taught me that even the best business can be a poor investment at the wrong price. Sales grew only 6.65% and profit growth merely 2.45% — this is a steady, mature cash generator, not a fast grower. At ₹183.85, I am paying 19.29 times earnings and 9.57 times book value. The Graham Number, conservatively based on earnings and book value, is ₹64.42, and my rough DCF indicates an intrinsic value of ₹94.16. That gives me a negative margin of safety of over 190%. The market is pricing in perfection for a company whose growth is barely keeping pace with inflation. The 4.68% dividend is comforting, but it does not compensate for the risk of overpaying. I would rather wait for a meaningful pullback — perhaps closer to the DCF value — before I consider this a prudent investment. As always, price is what you pay; value is what you get.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer