Gulf Oil Lubricants India Ltd
NSE:GULFOILLUB
Gulf Oil Lubricants India Ltd
NSE:GULFOILLUB
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Ladies and gentlemen, good day, and welcome to the Q3 FY '25 Earnings Conference Call of Gulf Oil Lubricants India Limited, hosted by Systematix Institutional Equities. [Operator Instructions] Please note that this conference has been recorded.
I now hand the conference over to Mr. Sudeep Anand from Systematix Institutional Equities. Thank you, and over to you, sir.
Thank you. On behalf of Systematix Institutional Equities, we welcome you all to the Q3 and 9 months FY '25 conference call of Gulf Oil Lubricants India Limited. From the management side, we have Mr. Ravi Chawla, Managing Director and CEO; and Mr. Manish Gangwal, CFO.
I'll now hand over the call to the management for their opening remarks and followed by the Q&A session. Over to you, sir.
Thank you. This is Ravi Chawla. Good evening to everyone who have joined us in this call. I'd like to start off by, of course, wishing all of you a Happy New Year. We are in the New Year 2025. And of course, we are also delighted to share with you that Gulf Oil in quarter 3, we have achieved the highest ever revenue and the highest ever EBITDA in our -- ever in our history of Gulf Oil. We have seen that there was definitely macroeconomic headwinds in India with the elections, other things had slowed down in quarter 2 and quarter 3. But we have been focusing on our -- how can we capitalize on the opportunities, navigate what's been evolving.
So really for us, this highest ever quarterly volume and strong double-digit top line growth of 11% year-on-year, crossing these 2 milestones of INR 900 crores in revenue and INR 122 crores in EBITDA for the first time ever in the quarter have been also showing the strength that we definitely are resilience, our team efforts to deliver even when macroeconomic conditions are facing headwinds. And of course, we are seeing some early signs of recovery, demand recovery. So that's really one of the highlights.
So we delivered also our highest-ever core lubricants volumes of 38,500 kl during the quarter, and this is a growth of 7% year-on-year. So that's another good thing that happened in Q3. Of course, growth was seen across all major segments for us. It was, in this quarter, largely driven by double-digit growth in our Motorcycle Oil segment and a good double-digit growth in B2B, definitely in B2Bs or subsegments like infra and industrial giving us this double-digit growth.
We've also seen that -- we've seen our B2C sales also grew due to the MCO. And that's another thing. And our premium range of products we saw a much higher growth level double the normal growth rate. So these are the things which are well for us. We also had a few other achievements, which we'd like to share with you. Definitely, we had the strategic partnership with Nayara, where we are expanding to their network of 6,000 outlets. We're already selling lubricants there. The AdBlue will also get sold, and definitely, this is going to help us to create availability. So this process has now started.
We renewed our exclusive partnership with Piaggio India till 2032 now and continue to deliver high-quality lubricants in the -- across the ranges and even 2-wheeler range of high-performance sports bikes were added. We have obviously got this partnership until 2032, and we also have extended our long-term partnership with Piaggio for the Commercial Vehicle segment up to 2030.
The other good thing that happened this quarter is we had reported AdBlue was slightly soft in quarter 2. It picked up in quarter 3, and that's again a good sign for us. And I'd like to also mention that we had mentioned about our mega brand campaign, The Unstoppable, which was a 360-degree campaign, which started towards the end of September, that continued. And this featured all our 3 brand ambassadors. It was actually a very creative and technology savvy campaign, which had -- was released like a movies released and the right from the song launch to finally on the ground campaign using outdoor. This was right across retail outlets in all types of media, social media handles using influencers. This was a big success, and I think solidifies our brand consumer bonding and also did give opportunities for deeper engagement and a long-term affinity.
We had another major event when we are looking at the high end of the biking segment. We've been looking at that as an investment all around in terms of products, reach out programs and also building the brand through influencers. And we had sponsored India Bike Week, which is actually a very strong property, which is the biggest in India in terms of the adventure premium biking motorcycle enthusiasts. This is held once a year in Goa and it's one of the biggest in India. It is the biggest actually. And we have more than 25,000 motorcycle enthusiasts, adding all the top end bikes and Gulf is the title sponsor there. We had lots of activities, and I had myself gone for the event. It's a very, very good event with a lot of creation of many properties from Gulf and a lot of OEMs there, a lot of passionate riders, there's a club village that 62 motorcycle clubs come from 15 cities. And we have a property called Ride with Gulf, which is our initiative on social media, lot of influencers. So really, this has been a good platform.
So we continue to build our brands. Of course, we are still trying to keep it in the 3%, 3.5% range. And that's where we are. So I'll now request -- yes, I just want to also mention on tariffs. Tariffs, as you know, we have got a majority share there, the subsidiary. And this continued to perform well. And the 9-month top line is at INR 40 crores, which is nearly 3x growth during this period versus last year. Healthy order pipeline is there, and we are on track to close the year on a strong note in this business, which is going to add to us.
Our brand ElectreeFi which is a software-as-a-service company where we have an investment that continues to perform well, securing new customers in the 9-month period. So 2 other good initiatives that are reaching a good stage of, I would say, to take off as the EV -- enthusiasm on EV products as we see all around also going up in India.
So I'd like to now hand over to Manish to take you through some of the other highlights and then, of course, take your questions. Thank you. Over to you, Manish.
Thank you, Ravi. Good evening, everyone. So as Ravi mentioned, we had a very healthy performance for Q3, and we said double-digit revenue growth and EBITDA of INR 120 crores, which translated into an EBITDA margin at 13.5%, a sequential basis improvement of nearly 90 basis points, which is auguring well towards our guided band of 12% to 14% towards the higher end.
And for the 9-month period also, we continue to deliver very strong performance with nearly 21.5% PAT growth and 14% EBITDA growth. So overall, the financial performance continues to do very well. On the gross margin side, also, you will see that there is an improvement sequentially in the gross -- at the gross margin level, which means that the input costs have been relatively stable, although there was a depreciation of the rupee, which started during the quarter and continues as we speak. And obviously, that requires a margin management to kick in.
But in spite of that, we have been able to improve our gross margin, led by product mix improvement and overall segment mix. At the same time, you will see that the AdBlue improved, AdBlue volumes improved. And at the net debt level, we continue to remain a debt-free company with net debt of -- net cash position now upwards of INR 450 crores at the end of December.
Our working capital has improved from the last quarter by nearly around 5, 6 days. So overall, on the financial side, also, it has been a very good quarter for us overall. The only thing you will see also in the results published is that the quarter-on-quarter finance cost has gone up, and that is because of the ForEx loss because of rupee depreciation, which on our working capital loans. And that was an impact of around INR 5 crores for this quarter. Although first H1, we were in -- we were having a net ForEx gain. So for the YTD 9-month period, we are at nearly INR 3.5 crores of ForEx loss as rupee depreciated sharply towards the end of the quarter, especially from November onwards.
So with that note, we would be happy to take Q&A from the investors. Thank you.
[Operator Instructions] The first question is from the line of Probal Sen from ICICI Securities.
Just a couple of questions. Firstly, as far as the margin improvement is concerned, given the way that crude has behaved where it probably strengthened a bit towards the end of the quarter, but after that has once again softened back and now is at the sub-$75 level. How should we be looking at the margin trend. Of course, as you rightly mentioned, this is offset a bit by the rupee depreciation, which has been a significant drag. But on the whole, are we confident that we can maintain this trajectory of improvement that we have seen in the last quarter over the next couple of quarters? That was my first question.
So thank you. I think, as you rightly picked up, while there is a stability in the crude, it went up above $80 for some time, but then it stabilized in the range of around $75. And as long as the crude remains in this trajectory of $75 to $80, the input costs should remain stable. Of course, the base oil follow with a lag and there is a demand-supply situation in various grades of base oil. But lastly, we are hopeful that with crude stability the base oil prices remain stable, but the landed cost because of rupee depreciation obviously goes up because India imports a large part of base oil from overseas, including ourselves. And that impacts the landed cost.
So we -- as I mentioned in my opening remarks, we will closely monitor the landed cost situations across base oil category. And will take accordingly the actions in terms of margin management. Our guided band of EBITDA, which is 12% to 14%, definitely, we will be maintaining that band going forward as well, at least for the Q4 and part of one of the next year is what we currently estimate.
Right. So just on pricing, sir, did we have any significant price changes that is from our business in this quarter?
So we keep evaluating the margin management scenario, as I mentioned, and obviously, the competitive action also is there in the market. And based on that, the scheme rationalization and some sort of discounting, which we -- which is there, quarterly schemes are there, we try to rationalize those in the interim. And if there is a major change in the input cost, then the MRP level changes also are affected. So we closely monitor both trying to rationalize through the scheme adjustment. And if not, then the MRP level changes are also announced. So we closely monitor that.
Got it. Sir, the second question was more housekeeping. I'm sorry, I didn't quite catch the exact number of the core lubricant volume and AdBlue volume if you can kindly...
38,500 kl is the core lubricant volume in the quarter and AdBlue is at 36,000 kl.
Okay. And sir, just one last question, if I can squeeze in one. As far as Tirex is concerned, the trajectory of growth that you mentioned where it has grown substantially in the 9 months of this year. Any guidance you would venture to give us for what target is there for FY '26? And in order to support this level of growth, does that require a little bit more investment, whether internally or from your side?
So Tirex, which is where we have a 51% stake, include DC fast charger manufacturing. And their last year's full year turnover was around INR 25 crores, this year in the 9-month period, they have cost around -- they are at around INR 40 crores. And usually, the quarter 4 is a stronger quarter because many of the orders are materializing in the quarter 4. So we will -- as our previous calls, if you refer, we said that we would like to double the revenues every year for the next few years. And that is where we want to highlight that we are on course for that. And definitely, we should end the year on more than double of last year revenues and trajectory for the next 1, 2 years also remains on that way.
Okay. And with regard to the investment, sir, does that mean any increase in investment required or that's not really there's sufficient capacity to support this kind of revenue growth without any huge investment?
So all the investors will recall that out of the -- when we acquired the company, 51% in the company, INR 65 crores was invested as a primary investment into the company. And a part of that money is still lying with them to take up some of the expansion projects for capacity increase and trying to -- we are looking for a slightly enhanced capacity plant and the work is on for that. But till such time for the next 1 to 2 years, they have sufficient capacity. Plus there are some working capital arrangements needed as we increase the volumes, which are also in place. So no major funding from -- for the expansion is -- as of now seems necessary from Gulf Oil to Tirex.
[Operator Instructions] The next question is from the line of Sabri Hazarika from Emkay Global.
So congratulations on good numbers. So I have got a few questions. Firstly, with respect to your volume breakup. So how -- you mentioned about MCO, but overall, how has the different segments seen in terms of growth during Y-o-Y?
Overall, as Ravi highlighted, our motorcycle grew double digit and Industrial also grew double digit. Rest of the volumes were in the mid-single digits. So overall, we have been able to deliver 2x growth across most categories. Agri was slightly subdued in the quarter. But overall, we have been able to deliver 2x plus volume growth of the industry.
And our mix also slight improvement in the personal mobility. As Ravi mentioned also that MCO was a very good growth. So from the classification perspective, diesel engine oil was around 39%. And personal mobility went up by 2% to nearly 23% for the quarter, and rest where others and industrials as we keep highlighting. So overall, we have good growth in certain segments, especially in motorcycle and B2B.
So factory fill has been the area of weakness. So ex of that, what could be the growth? And how are you seeing the current scenario in terms of factory fills?
So obviously, the -- excluding factory fill, our quarterly growth was around 7.5% since factory fill still was for the quarter negative, although we saw an improvement starting December. And as we speak, there is a traction which is coming back in the factory fill business. And because of this overall DEO volumes are also in the mid-single-digit growth last quarter, but we are seeing an uptick there clearly from the factory fill side. And then the rotational effect will also come into FWS in the coming quarters as well.
So if factory fill normalizes or say suppose growth at a positive rate, then could you be like closer to 10% sort of like Y-o-Y growth in volumes?
So Mr. Sabri just to highlight, our 9-month volume growth for the current year, excluding factory fill is also around 9%. So we are very close to the double-digit mark even in the current year, excluding factory fill given the environment we were into in terms of the overall macro economy and the Indian economy. So that gives us a lot of confidence going forward that one even some of the business pieces like factory fill et cetera, also start firing then obviously, we'll continue our trajectory of 2 to 3 years the market growth rate. That is the expectation we have.
Okay. Then on AdBlue, so the volumes have picked up this quarter. So how do you see the overall trajectory of AdBlue for the next, say, 2, 3 years?
Yes. So you'll see, we have been looking at 10% to 15% growth in the segment. I think that is where we see it. Obviously, there are more opportunities now with Nayara, we have entered into a tie-up. So I think our -- we would want to look at how we maintain ourselves as a high-quality brand. And I think that's the outlook. And of course, Nayara is going to add an opportunity of outlets. We'll have to -- out of the total outlets, we'll have to see what is the consumption. And I think it's obvious well for us to try to touch about that 15% mark. But between 10% and 15% is what we could aim for.
And is there hope for margin improvement in AdBlue also, I mean it's like a single-digit margin product, but can there be any improvement there just because of the fact that the volumes have almost become as big as lubricants itself?
See, we have positioned ourselves with many brands with OEMs and our own brands, which are in the market. And it's more, as you see, a supplementary requirement to diesel engine oil. So it is going to continue to be competitive. And I think we will obviously have to look at market pricing because it's a consumable. So it needs to be effectively -- people who use the product probably by a monthly basis. So it has to be a price competitive. So I think it is important to have the right distribution. And of course, we want to maintain the margins because competitive intensity might go up in this segment as the product gets more used.
Got it. And other expenditure, I mean, it is slightly higher. Is it because of the campaign and the ad spends due to which it was sort of like higher?
So it is also linked to the AdBlue volume increase as well because last quarter was a subdued AdBlue volume and our freight components and all goes up. So it has to do with that. A&P-wise, the quarter has been around 3% of the top line. So we are back to our normal range. Of course, there were these special marketing campaigns, which were there during the quarter, but we moderated some of our other lines of expenses to keep it at 3% of the revenues for the quarter.
Okay, sir. Yes. And just last question, any update you'd like to share on the EV fluid segment?
I think EV fluids is a small volume. But as we have mentioned earlier, we have more than 10 partnerships in that area. So I think we continue to look at more with both the component makers and the OEMs. So I think that is something which is steady, but it's a very small number. So I think that focus to get more EV partnerships is on. And I think that is based on what we would enter into contracts with some EV manufacturers. So I think that is a -- it's a good place to be. And I think we would be in the top 3 there also in terms of EV supplies.
[Operator Instructions] The next question is from the line of Probal Sen from ICICI Securities.
I just had a broader question. I think it has been mentioned over the last couple of years, the attempt to sort of continue to premiumize our product portfolio and sort of grow the B2C segment because obviously, that is a higher-margin segment as compared to the basic factory fill segment. Just wanted your thoughts on how you feel the last 12 months has gone in that direction?
And is it fair to say that if the premiumization across categories continues to sort of recover the guided EBITDA range of 12% to 14% can see an uptick over the next couple of years or rather that is the aspiration as a business that we have?
See, our aspiration is obviously to try to improve our margins. But given that we are present in both B2B, B2C, we have also got -- currently, as you know, there is obviously products which make x margin and the premium products make higher margin. If you look at the client study, which talks about value and volume growth, we have seen that a 3% volume growth and a 6% value growth. So that is where the premium products come in and the new products come in.
Our mix is also B2B and OEMs, a lot of OEMs we do business with. So as a guided overall figure, we said 12% to 14%. And within each of these segments, we are now trying to push our products which have higher margin, which are premium. We're also trying to introduce semisynthetic, synthetic. I gave the example of India Bike Week. Now India Bike Week is all about premium bikes right from the KTMs to the Harley-Davidson to Enfields. So we are looking to sell more there. And obviously, there is going to be a lot of pricing play in various segments, OEM B2B.
So as a balanced approach, -- we believe that if we can premiumize more. So what we're trying to do is suppose we are growing 7% overall, we would like to have the premium products going at at least twice that. So given that -- and that varies, the percentage varies of that across segments. And that is what is our focus. So value range. Also, if you look at that is creating value in terms of pricing. But then market is also moving towards a value range because if you look at rural markets or you look at pricing, we have, for example, a top end motorcycle oil or I would call it, higher end. We have the synthetics, the higher end or a range which we really sell well. Below that, we also have got ranges like a brand called Zipp, which goes into the motorcycle segment.
So we have to cater to different markets in different geographies and also price points. Secondhand vehicles are there, they would pay less for a lubricant. So this is, I would say, complex sort of metrics which we need to keep. But given that if we can improve our premium grades to again a margin of 12% to 14%, we'd be happy to look at the next trajectory of 14% to 16% as and when we come across that, the sooner the better for all of us.
Right, right. And sir, in terms of the OEM relationships, any update you can share in terms of any fresh OEM tie-ups that we may have done over the 9 months period itself?
Yes, we got the 2-wheeler business from Piaggio. So that's a new business, which has helped us -- which is the higher bikes of Aprilia and Vespa and all. So that's a new one. And I guess we will make some announcements in the next -- before the next quarter. We are renewing most of our contracts with our OEMs, and we are also talking to -- the Nayara is another one which we had, which I mentioned earlier, in terms of retail leverage.
With respect to the Nayara tie-up, how will the sort of revenue model was? Just wanted to understand what's the kind of commercial arrangements, anything you can share outside of what is, of course, confidential?
No, arrangements, we can't. See, they were doing business with 2 loop companies. We are now doing business with them and 1 company continues. They have 6,000 retail outlets that they are going to rapidly expand. As you must have seen the kind of investments they have made in the retail outlets, they are both Tier 1, Tier 2, Tier 3. And getting our product available is there an exclusive arrangement for AdBlue, so I think this is more a distribution come marketing initiative. And you will see now Gulf products available across a lot of their petrol points. And I think this is an opportunity for us to also get our brand more available and reach out to more consumers. And definitely, arrangements are quite confidential in terms of what we do with various partnerships. Yes.
No, no, I wasn't trying to get the exact number, sir, what I wanted to understand was you have to -- the way it works is we have to pay a royalty to Nayara for every unit of products sold from their outlet or how does it work? That is what I wanted to understand.
That arrangement is actually confidential because we do have to give some margins and sharing between their outlets and also definitely, we work together on promotions and all with Nayara.
The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund.
One question on the near-term volume outlook. Are we seeing uptick in the volume in the seasonally strong Q4? Would we be seeing a stronger growth than Q3 in Q4?
No, our objective always has been to grow 2 to 3x the market. And without being specific, we want to mention that we would like to continue our trajectory of 2 to 3x the market growth rate on an annual basis. Of course, quarters sometimes can be varying because of the seasonality of some of them, like our September quarter is usually a monsoon impacted quarter. But trajectory-wise, 2 to 3x growth is what we aim at for -- on an annual basis.
And in terms of the margin, would there be a bit of a sequential pullback in Q4 because of the rupee depreciation, and we are taking a calibrated sort of reduction in the discounts?
Yes. So it's a normal situation. We have to evaluate the margin management, as I highlighted earlier also, that we keep a very close watch on the margins. And of course, then we -- it also some esteemed related adjustments are done, which are short on -- actually resulted an immediate impact and the immediate improvement in the realization. But MRP level changes take some time and we have to wait for that in terms of overall trajectory of rupee now.
The good thing is that crude is stable, in fact, come down from the recent highs. So that should partly support the input cost in terms of overall impact. But yes, if rupee continues to behave the way it has, definitely pricing actions and/or scheme related adjustments will come in, which will neutralize part of the impact of this input cost increase.
Right, sir. One more question was about the base oil linkage to the crude. Has that linkage sort of bit broken out during the last year with base oil remaining more or less stable against the crude variation? Or has it continued as in the past?
So we have always maintained that crude moves on a sustainable basis, that impacts base oil. The short-term movements in the crude are not impacting base oil immediately because there is a lag effect of 1 to 2 months on base oil. And within that, if the crude comes back, then the short-term impact doesn't really matter on the base oil side. So the short-term volatility has been more, but the long-term crude -- over full year basis the crude has remained quite stable, and that is where base oil also has remained quite stable for the year.
Sure, sir. And would you be able to give more color between the sort of Group I, Group II, and Group III [ base oils ], how the trend has been and drivers?
So that depends on the demand and supply and some of the refineries only made Group I base oil, some of the refiners only made Group II and they take as maintenance shut down for a longer period. Then the availability sometimes globally becomes short for a short-term period. So -- but -- so yes, there are challenges sometimes on the individual grades of base oil. But overall, I think on a larger horizon basis, everybody then follows crude over a longer period. If you plot a chart of base oil and crude for 5 years, you will find a lot of symmetric.
And what would be our consumption of Group II and Group III at this point?
We have been one of the large consumers of Group II, Group III base oil because all of our premium grades, and long-grain products are based on Group II, Group III propulsion. So yes, the proportion of Group II Group III base oil is quite high in our overall portfolio.
And in terms of -- one more question probably on the base oil, do we also sort of get the annual rebates as well as the base oils where that can support our margin on a sequential -- quarterly basis?
We follow accrual basis of accounting. So whatever the annual rebates and all which are there, we accrue on a quarterly basis on a projected listing of the volume. So we usually take it on every monthly quarterly basis in our accounting.
The next question is from the line of Yogesh Patil from Dolat Capital.
Congratulations for the good set of numbers. sir, Indian refiners are expanding our capacities, and we hope we will also be building the base oil production capacity based on the market demand. Will it help us in terms of pricing to procure base oil from domestic refiners instead of Q4? And that will improve any gross margins in the long run, we wanted to understand on this side.
So even currently, we buy base oil from the local refiners. Of course, the proportion is slightly lower. But these Indian national oil companies, when they sell office base oil prices, they consider both global base oil prices and the rupee/dollar ratio. So from that perspective, the overall pricing has always been based on the global considerations and rupee/dollar. So while we obviously wait for the capacities to come up, it can definitely help us in reducing our some of the working capital cycles because when it is imported, we need to store or place orders for sometimes 60, 75 days in advance. But if it is locally available in sufficient requirement quantity, then our -- some of the working capital cycles can improve. And pricing, of course, will have to wait what they calibrate to.
But sir, also our transportation cost will also come down, if I'm not wrong. I just wanted to correct myself.
So everybody -- so all of them, when they announce their price lift now also the factor in the global transportation, the sea freight and the landed cost alternative available to the buyers here and accordingly calculate their pricing, as I understand.
Okay. Sir, my next question is capital expenditure. If you could provide us more details on the capital expenditure plans for next year? And if you could elaborate more on the details on the spending side or project wise?
So our trajectory of CapEx has been around INR 30 crores annually. And going forward, we are going to have a CapEx of around INR 30 crores to INR 40 crores is what is our estimate. Of course, we are running our plants at around 100% capacity. And we have purchased some land, joining land near our Silvassa plant as well, which is connected to our plant. So we look for a sort of expansion plan there as well.
And once some sort of crystallization happens there, we will obviously announce it to all of you. But at this stage, this is under discussion stage. But overall, the general CapEx will be in the range of around INR 30 crores to INR 40 crores.
Sir, as you mentioned, our current capacities are running closer to 100% utilization level. Can we reach it to 110%, 120%? Or do we need to expand our capacity if the demand continues at the rate of double digit for the typical?
When we announce our capacity, it is the blending capacity, which is on 2 shift basis. And we can always do a sort and manage the requirement for the next 1 to 2 years of growth by running excessive and obviously, we keep adding the other infrastructure and filling lines and that's where these CapEx goes annually. But overall, blending wise, we have sufficient capacity even for the next 2 to 3 years as well.
And sir, last one from my side. As you mentioned, the NCU volume growth was double digit. Is it because of festival season merger in all quarter 3 FY '25? Or is there any reason such as a good for the group -- good growth?
You see the demand continue will vary. It is also based on initiatives. Of course, we see different segments respond like agriculture is a seasonal. It depends on how much is being used a tractor. Similarly, I would say there is no great predictability that it will go up because of festival season. But yes, the demand did go up. We had a lot of initiatives and overall, we saw good buoyancy for our products. it will vary. There is no real fixed kind of seasonability. And also, as you know this year, you've seen elections, you have seen so many state and central elections. A lot of the projects got delayed, lot of movement was there. The cold weather, hot weather. So a lot of things there, but there's no real evidence that because of the festivals and then motorcycle demand will go up. It's more something you have to calibrate based on demand.
Yes, monsoon season tends to be low for some segments because the usage is less. But otherwise, it's quite active demand.
[Operator Instructions] The next question is from the line of Chirag Fialoke from RatnaTraya Capital.
I just wanted to understand for this quarter, the difference between the stand-alone -- the minor difference between stand-alone consolidated numbers are because of Tirex, right? Is that right?
Yes.
But then I think in the footnote, it feels like that Tirex this quarter probably broke even or is almost at a profit. Is that right? Or am I reading something wrong?
No, no, you are right. So they were almost at EBITDA breakeven for the quarter.
So this quarter, they have reached it, but our consol number is still lower than our stand-alone number?
That is mainly because of the depreciation, which is there.
Understood. Understood. Okay. Fair enough, sir. And the second question, just on the continuity of the previous participant. When we have the ability to run the third shift that would allow us to do almost 20%, 30% more volumes than we are doing. If you were to run the full third shift, is that correct? Or is there a limitation there that we don't understand?
So we are already running some sort of a third shift for some days during the month. So what we are trying to recalibrate is that we don't want to run all the plants at full third shift capacity around the clock -- around the year. So obviously, we will be looking at some sort of expansion, but that is not yet fully crystallized.
Yes. So as the product requirement goes up, there is filling lines, which go size-wise, there is a space required for packaging, there is other activities which have to be pipeline made. So as we grow, obviously, we have to look at -- that's why we acquired some more land in Silvassa. Chennai, we have space as of now. Silvassa will be doing some things, as Manish mentioned, even on the CapEx once we are clear about the plans, because that way you have to create capacity, to drums to small packs.
Understood. So you're saying it's largely like a space requirement for the SKU with. Okay. Understood. And that...
Yes, sorry. Go ahead, Chirag.
And the third shift, I suppose you were to run it on a regular basis, first half the month, every month or something like that, that doesn't incur any incremental onetime costs or anything, nothing that would sort of show up in the numbers in one quarter or something like that. That's not something that would be expected, right? Because it's just a continuation of the second shift. I'm just guessing if there is a hiring of more labor or something which is involved, which involves onetime cost also on...
The number could not be any material to be discussed here.
Understood. Perfect. Congratulations for a great set of numbers.
The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund.
In terms of the expansion at Silvassa that we are looking at, what kind of CapEx could be involved when we are looking at expansion of line and what kind of line, some broad color in terms of what we are considering that.
So we are -- as I mentioned, we are looking at the plant right now. And based on that, we will -- once we form up the plants, we'll obviously come back and announce.
What's our current size at Silvassa?
We have 90,000 tonnes capacity today in Silvassa plant, and Chennai plant is 50,000 tonnes.
And what's the typical module of addition when we are considering the addition?
So as I mentioned, we have not yet comped up the plant. So we'll have to really work out on the basis of the requirements and the pack-wise requirements as Ravi highlighted. And based on that, we'll have to really do a detailed exercise and then we'll be able to firm out.
The next question is from the line of Harsh Maru from Emkay Global.
So my question actually relates to the battery segment. So could you share some bit of financial metric around the battery segment for the 3 months and the 9 months of this fiscal? And also, if you could talk about the localization initiatives that you were I think undertaking over here.
So battery business, as we have been highlighting, is crossing around INR 20 crore quarterly revenues, INR 20 crores to INR 25 crores range and have turned EBITDA positive during the current year. They were earlier marginally negative, but now this year, they are at EBITDA positive. Overall localization, we have been able to successfully localize 1 major SKU and working on for more SKUs to be localized.
Right, right. And secondly, in terms of the additives. So a couple of things. One, do you see the overall composition of additives in your total inputs increasing? And if you could throw some light on the pricing trends around additives?
See, normally, additives are 10% to 15% of the -- what we make the lubricant. So that varies, of course, on the quality of the additive and the percentage dosing. So this is a raw material component in all the lubricants. Some products have lesser percentage. So I think this is something which is normally done. We also have a global procurement strategy for additives, which we do globally with all the 4 major additive suppliers. So that continues to be the part of the cost building on the -- and we continue to also work with additive companies for higher technology products and new products. So basically, the pricing is quite well set in terms of our global procurement.
The next question is from the line of [ Pratik Vaidya ] an individual investor.
Yes. I wanted to check, you mentioned that you will be doubling your revenue over the previous year. Is that correct?
So we mentioned that we will be doubling our revenue for Tirex business, which is our DC fast charger subsidiary in that business, yes.
Okay. Got it. And the other thing I wanted to check, how are you seeing the data center business, what kind of volumes you are doing? Or what kind of traction are you getting there?
Yes. So data center as we have got our data has to use our data. The total lubricant market is today 2,900 million liters. If you take away processed oils in India is around 2,000 million liters. If the entire data centers, which today are not immersion cooling they're cooled with air cool, if we were to just take a simple assumption that everything gets converted, it will not happen. So given the potential that everything gets converted, it's very expensive to go into the immersion cooling. It's a technology which is new. Today, there's hardly any. So if we take a very, very simplistic assumption and says that everything gets converted, our assumption of our Indian market is that this will require 14 million liters against the market side of 2,000 million liters, it is not even 1%.
Now at the 1% level, we are getting our products ready. Globally, we have a product technology team. They are working on that. So once the products are ready in a few quarters, we'll be able to place it with some of the data centers who will go for immersion cooling. With immersion cooling, the high level of -- now the chips are going to get much faster. The requirements of data is going to go very high. So we will be in a position to do these trials and hopefully test this segment. It's a good segment globally. And definitely, we are also looking at it globally.
But in India, the context is that how much will get converted. So we will be in a state of readiness in a couple of quarters to be able to work in this segment. And hopefully, you will see a lot of large data centers coming. There are certain cities in India, which are definitely gunning for this couple of cities all mentioned. So this is actually a definitely a futuristic product, which we are preparing for.
Okay. Got it. All right. Fair enough. And in terms of your margins, so just checking historically, 13%, 14% is kind of a peak margin that you achieved. So how do you see traction going ahead? So I don't want the guidance to it, but some ballpark or some guidance to it, will you be able to maintain improve? How do you see that?
So as we mentioned, we continue to track 12% to 14% EBITDA margin, which is our current guided band. And in one of the previous questions, we mentioned that, obviously, our -- we aspire to move to the higher trajectory over a period of next 2, 3 years, every 2, 3 years, you would like to move to the higher band. And the premiumization efforts, the Unlock 2.0 strategy theme, which we unveiled some last year, is on the go, and every segment is looking for premiumization of the product and focusing more on selling better products, higher margin products, as Ravi highlighted earlier.
So with that, the trajectory is always to look for the higher bands, but it will not happen in 1 quarter or 2 quarters. It will be over a period of 2 to 3 years is what we are aiming at, and also our strategy to continue to grow volumes towards the market remains. And that's where the operating leverage also keeps coming in and will also help achieve that.
[Operator Instructions] The next question is from the line of Hardik from ICICI Securities.
So any price hikes have you taken in this quarter or in this financial year and to what extent?
So that we have already answered in our earlier one of the investors questioned about that that we are looking at the rupee depreciation and the impact on the input cost, while crude has come off the highs and it is positive overall to maintain some of the stability. Base oil impact has been minimal of the crude movement and base oil has been stable. We are not seeing any major changes in base oil as of now. But rupee impacts the landed cost, and we will definitely look at margin management and recalibrate our pricing. So currently, it's -- in the entire rupee depreciation has accentuated in the last fortnight or so we would think. And obviously, we are closely watching that. We'll definitely take some actions if required on the margin management, right?
Yes. So it's not about the price hike that will be taken. I'm just asking about -- have we taken any price hike in passing this financial year?
So if you recall, I think there was only 1 price increase in until May quarter 1. And thereafter, there have been no price increase because rupee and base oil have been very stable.
And to what extent was it? 1%, 2%?
It was around 2% at that time, we recall correctly at this moment.
[Operator Instructions] The next question is from the line of [ Nisha Mulchandani ] an individual investor.
Sorry, if I'm repeating this question again, but what is the amount of battery turnover in this quarter?
Yes. Nisha, it was around INR 21 crores for the quarter to be very specific.
Okay. And is there any increment into the export percentage? What is the range on the total revenue that we have exports in this quarter?
Exports are growing well for us, but there are still not -- they are still single digit of our overall volumes.
And that would be a higher single digit like as mentioned in the last quarter's investor call?
We will not be able to give that specific number. Nisha, if you will appreciate that.
Okay. Okay. And in terms of the subsidiaries that -- Tirex that we have, is there any major improvement into the next year that we see like we see that there is a 300% growth. So any major improvement that we can see into the next quarter as well or any major plans for that?
You are talking about the quarter or for the next year, I'm not clear?
For the next year, like given the kind of growth that we're showing, so is there any substantial improvement that has been planned for the next year as well?
Our aim for the Tirex business, which is a DC fast charger business, of course, depends on the EV penetration and the overall government impetus on the EV charging side of the infrastructure. But yes, we want to definitely take that at a rapid pace over the next few years in terms of our aspiration on the revenue side.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Yes. Thank you. Well, we'd like to, of course, thank everybody for being on the call. And of course, we'll try to answer the questions to the best of our ability. Our outlook and focus remains on both strategically and also in terms of our executions to deliver consistent 2 to 3x of the market growth, which we anticipate about 3%, of course, continue our profitability band of 12% to 14%. And of course, volume-led growth, which is profitable in our core lubricant business is our focus. While we also strengthened the EV charging segment to become a growing contributor to our vision, both in the medium and long term.
So looking ahead, we are optimistic that -- about the improving demand conditions that we are seeing both in B2B, B2C. And definitely, we have started seeing some early signs of demand recovery because it has been slightly challenging in the last few quarters. As we see the announcement on the middle class income getting expanded, the uptick in government CapEx and infrastructure, this, of course, [ as ] well for our segment-wise growth. Our focus remains on strengthening our brand, enhancing the customer experience, increasing our conversion, empowering people obviously and to drive sustainable growth. And definitely, we are continuing to do that, focusing also on our theme of Unlock 2.0, which is to accelerate, premiumize and transform.
We are investing a lot in digital. And hopefully, we are going to see a lot of good initiatives in terms -- and I'd like to also end by mentioning that we have declared a very good return to our shareholders in terms of an interim dividend of INR 20 per share, which is 1,000% on the face value of INR 2. And I look forward to chatting with all of you in the next call. Thank you so much, all the best.
Thank you. On behalf of Gulf Oil Lubricants India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.