Castrol India Limited (NSE: CASTROLIND) Q3 2026 Earnings Call dated Feb. 04, 2026
Corporate Participants:
Saugata Basuray — Wholetime Director and Interim Chief Executive Officer
Mrinalini Srinivasan — Chief Financial Officer and Wholetime Director
Analysts:
Unidentified Participant
Naeem Patel — Analyst
Nitin Tiwari — Analyst
Sabri Hazarika — Analyst
Vijai Pandey — Analyst
Dhaval Popet — Analyst
Vipul Kumar Anupchand Shah — Analyst
Keshav — Analyst
Viraj Yatish Mathani — Analyst
Jay Shah — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Castrol India Limited’s Quarter 4 CY25 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sagatha Basuray, whole time Director and Interim Chief Executive Officer. Thank you and over to you sir.
Saugata Basuray — Wholetime Director and Interim Chief Executive Officer
Thank you and good afternoon everyone. Thank you for joining us on our fourth quarter and financial year 2025 earnings call today. As you’re aware, our reporting follows the January to December calendar. Year 2025 has been a year of strong and consistent delivery for Castrol India. We had our eighth straight quarter of volume LED growth, closed the year with the highest ever revenue and gained market share in our core automotive lubricants business for the full year. Volume grew 8% year on year as supported by steady demand in the personal mobility sector, our continued scale up in the industrial business and our deeper distribution reach, particularly into rural India.
Our industrial portfolio and our rural distribution delivered double digit growth yet again validating the choices we made over the last few years. The performance also reflects our agile approach which enabled us to navigate market cycles. Business grew from expanding our reach, deepening our relationship with key OEMs from the automotive sector and better execution every day in line with our mantra stay close to customers, make smart choices and deliver with discipline. In the fourth quarter we saw some momentum. Revenue grew 6% year on year, making it our highest quarter on quarter revenue in nearly two decades while volume grew by 8% reflecting sustained underlying demand.
However, what is important to note is that this performance came in a very volatile operating environment as competitive intensity continues, raw material movement and currency volatility persisted through the year. Our focus remained on disciplined execution, staying close to customers, managing costs proactively and continuing to invest in building our brands, bringing new innovations into the market through new products and expanding our distribution reach. During the year we moved at pace on innovation, launched new products and localized close to 20 products across automotive, industrial and our specialties range. Some of the major ones include advanced High Sol and Alosol industrial products.
The new Spherol range in and we upgraded our core offer in the personal mobility car space which is Castrol Magnetic. We also launched new products in the autocare range. We continue to send in our distribution and relationship with key OEMs across automotive ecosystems. We also forged a collaboration with Triumph Motorcycles for our brand Castrol Power 1 and signed an MOU with Winfast Auto India to support their ev. After sales at Castrol Service Centers, our brand building initiatives reached an unprecedented scale touching 300 plus million consumers and trade professionals through multi channel campaigns such as the Garnime B3X protection best oil Guaranteed on our commercial vehicle oil range.
Along with establishing our presence across multiple major racing events, these efforts deepen the brand’s connection with consumers and trade alike. On the distribution front, we continue to expand our market reach. Our distribution network now covers more than 150,000 outlets nationwide and the Castrol Auto Care portfolio is now available across E commerce, modern Trade and another 67,000 outlets in physical retail stores. Service network has also grown. We now have a network of 750 Castrol Auto Service points across the country and we reached 30,000 bike workshops and more than 11,000 multi brand retail outlets. Rural distribution continues to scale up.
We are now at over 40,000 rural outlets and we have over 500 rural service installed in the country. These network expansion initiatives ensure our products and services are available to consumers wherever they Sustainability and community engagement remains a core part of our ethos. We introduce India’s first RRBO based engine oil. RRBO stands for renewable closed waste oil for BS6 engines and co engineered with leading OEMs. We also scaled up our community programs such as through highways as classroom initiatives that reach Truck drivers across 46 locations in Uttar Pradesh. Now before I speak further, I will hand over to Mrinalini to take you through the financials in a bit more detail over to you.
Mrinalini Srinivasan — Chief Financial Officer and Wholetime Director
Thank you Shoghito and a very good afternoon to everyone. Let me start with the full year performance first. In fiscal year 25 we delivered strong results. Our revenue from operations grew 7% year on year to 5,722 crores. EBITDA for the year stood at 1,338 crores which represents a 5% year on year increase supported by strong volume growth and operating discipline. Like Shaktar just said, profit after tax reached 950crores up from 927crores to in the prior year. These gains reflect healthy operational execution and. A good product mix. Despite input cost volatility during the year we were able to manage margins through disciplined cost control, pricing and mix optimization while continuing to invest behind brand building, distribution expansion and capability development. Let me turn to quarter four. Revenue stood at 1,440 crores which is up 6.4% year on year basis and Profit after tax for the quarter was at 245 crores which is about 8% sequentially higher than quarter three and it reflects the improved operating leverage as volumes scale through the years. Pat was down from 271crores in quarter four. 24 though this was impacted by one time labor code related changes in this quarter.
Most importantly, our full year EBITDA margin which reflects the structure and health of the business, remained healthy and cash from operations was robust underpinning the quality of our earnings. From a balance sheet and cash flow perspective, the business continues to remain and resilient. Supported by healthy cash generation and continued financial discipline. We managed costs and working capital tightly which supported profitability even in a high growth environment. This disciplined approach enables shareholder value creation and we maintained a strong balance sheet while returning cash to the investors. In recognition of this performance, the Board has recommended a final dividend of 5 rupees 25 peise per share, taking the total dividend for the year to 8 rupees 75 paise per share.
This reflects our commitment to consistent shareholder return while ensuring that we have flexibility to invest in the business. I’ll now hand it back to Shobhato to share our outlook.
Saugata Basuray — Wholetime Director and Interim Chief Executive Officer
Thank you. Looking ahead, we expect India’s mobility landscape to evolve steadily rather than change overnight. Internal combustion engines and hybrid engines will continue to form the backbone of the market for the foreseeable future. Even as new technologies gradually scale up, sustained economic growth and low per capita penetration of cars and bikes should continue to support the coal lubricant demand in the personal mobility space. At the same time, government led manufacturing initiatives are expected to underpin growth in the industrial segment. That said, we remain mindful of comparative pressure, the volatility in raw material prices and currency movements.
These are realities of our operating environment. We are focused on keeping an eye on them and responding when the environment changes. Our response is clear. Strengthen the core automotive business, accelerate supply chain localization and grow in adjacencies where customers are seeking value including services and solutions. Without scale, distribution reach, strong brand and deep customer relationships. We believe Castrol is well poised to adapt to the shifts in the environment and continue building a resilient and future focused business. Thank you and I’m now happy for us to take questions. Thank you very much.
Questions and Answers:
operator
Thank you very much sir. We will now begin with a question and answer session. Anyone who wishes to ask questions may press star and one on the Touchstone form. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to Use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions. The first question is from the line of Naim Patel from Bastion Research. Please go ahead.
Naeem Patel
Hi. Am I audible?
Saugata Basuray
Yes, you are audible.
Naeem Patel
Thank you for this opportunity. So I had some questions regarding our supply side of the business. So when we use lubricant additives in our products, so are these lubricant additives source internally or do we source it from some external supplier? If I could just repeat the question. So I’ve understood it. Your question is the additives that are used in the lubricants, are these sourced internally from within Castor or bought from vendors? Is that what you asked?
Naeem Patel
Yes, from one of the. Either from the big four. Is it from external before or is it just from Castrol Internally.
So we have a variety of ships across our entire range of automotive and industrial grids. There are certain additive score molecules that we develop internally within the global Castrol system. We have technology centers, as you may be aware, across the world. And there are certain additives which we have procured or which we procure from our global partners who supply, who supply specialized additives for specific applications. We do both. And is there any mix like how much of it is an internal or how much of it is external when on the product range? Right. And a typical product in automotive will have multiple additives.
So you would say a majority of that is, is something that we source from our strategic partners. Okay. And if is one of those partners one of the big four big and additive players like Infinium, Chevron, Librisol or Afton? Yes, we work in all four. And just a follow up on that, do we have like a long term agreement with them or do we switch our mix on a quarter to quarter or a year on year basis? And if we do switch from one supplier to another for a particular period, what factors do we consider that has led us to switch from one supplier to another? So I’ll give you a broad answer.
Typically this is driven by our innovation requirement. As you know, this is a brand led business which we’re looking to deliver value to customers that they’re seeking and whatever the best suited chemistry for that, then we go and figure out what, which is the right molecule to put into the product to deliver that benefit. That’s the way we approach it over time. And there are different segments within Castrol. There is, there’s commercial vehicle, cars, motorcycle, industrial, so on and so Forth. And there are different suppliers who have strengths and we accordingly work with them in each of those sectors.
And just one final question. Do we procure from any of the Indian suppliers in this aspect or are they just the global hybrid? We have variety of suppliers, as you can imagine. I can’t keep sick names, but we have variety of suppliers, global as well as local. All right, yeah, that. Thanks a lot. All the best for you. Thank you. Thank you.
operator
Thank you. The next question is from the line of Nitin Tiwari from Philip Capital. Please go ahead.
Nitin Tiwari
Hi, good afternoon and thanks for the opportunity. So my first question is actually a bookkeeping one. Can you give me the volume number for the quarter in million liters?
Mrinalini Srinivasan
Mr. Tiwari, very nice to talk to you. We engaged even last quarter, so thank you for rejoining our call. While specifics of how many million liters we don’t usually share, I think what you heard speak at length was that it is sustained volume growth as we closed the financial year 25, in fact all four quarters, we were able to deliver high single digit 7 to 8% volume growth. So I think that is, that is what we really tried on and it’s. And the other good thing is it is a bit more diversified across all our portfolio where we play automotive, rural of course, and in the industrial part of the portfolio.
Yeah, I would perhaps at this point leave it at that.
Nitin Tiwari
Thanks for that, Mrinali. But I suppose we’ve been sharing this number historically in the calls, like in earlier calls since I asked this question because you’ve been very specific with the volume number. It would be great if you can like, you know, as well.
Mrinalini Srinivasan
I understand. Let me, let me help you a little bit there. Of course I won’t get specific. It has been a good year for us and we have seen, you know, upwards of 60 million liters in all our quarters. So we definitely are celebrating a good. Year closure for us, about a 60, 364 would be a good ballpark for this quarter. Upward of 60 in quarter four of last year. And every quarter, if I may just respond, has a certain seasonality in our business because at different times of the year, where the agri business is big and certain times of the other, the automotive, the core motorcycle businesses respond and have some demand. And we anticipate that we will have similar seasonality this year. And we will, we will hold on to our guidance of growing our volume at 1 1/2 to 2 times the market growth rate.
That’s fair. I’m just referring to this quarter because you mentioned that you’ve grown at 8% for the year and also 8% for the quarter. So hence I asked that would 63 to 64 million liter good ballpark for quarter four to understand the volume number. Yeah, broadly, ballpark and keep it at that. Typically, quarter for quarter one is slightly different, but you can hold it around that range.
Nitin Tiwari
Okay, sure. So, and my second question. Sorry, you were saying something? Yeah, yeah. Secondly, my question was saying that your. Estimate is a good estimate. My second question is with respect to your margin. So our operating profits have grown by about 5 1/2 percent, whereas volume growth has been at 8% as we indicated. So we’ve seen a margin compression in this year vis a vis previous year. Right. So what are the key reasons for that and how could we see this number going ahead?
Mrinalini Srinivasan
So, Nitin, you would recollect we had given a guidance that we will operate in the ebitda margin range 21, 24 as we close the year. We are actually right at the top of range at 24. Sorry to interrupt you, ma’. Am.
operator
I’m sorry to interrupt you. Can you please repeat because your voice broke in the middle.
Mrinalini Srinivasan
Okay, I’m going to repeat one more time. Is my voice better now?
operator
Yes, ma’, am, much better. I would request you to speak in the same manner, ma’, am, please. Thank you.
Mrinalini Srinivasan
I’ll do that. Thank you for letting me know. So, Nitin, as I was saying, we’ve given our guidance as operating margin, obviously EBITDA margin in the range of 21% to 24%. And as we closed the financial year 25, we actually closed it right at the top of range, almost at the 24% mark.
So from that sense, we are very much within our guidance and we are actually happy with that result. But you identified the mix, correct? As we grew volume high single digits and ebitda groups above 5%, 5.5%, there is a dilution, and we’ve spoken about this earlier as well. As we expand, as we change our business mix towards the industrial side of the portfolio, we know that we cannot operate at the same level as an automotive industry does. So that level of dilution we expect, we anticipate. And additionally, we have chosen to invest in the business.
We are in a growth journey. So you will see our fixed costs also growing, really focused on the investment buckets. And both of those have played out well for us, which is why you see the 5% return.
Nitin Tiwari
Thanks. That’s a very elaborate one. So given that you mentioned your focus is towards industrial demand, so is data center. They cannot demand something which you think is a reasonable one, which can come up in the US to follow. And what’s your assessment of potential demand from data centers in the time to come?
Mrinalini Srinivasan
Okay, let me try to recap the question and then between SH and I, we will try to address it. I think, Nitin, your question was on data centers. Your question was, do we see big potential in data center business as a growth opportunity? So let me take a short and then Shabita can build on. So it is indeed very, very small for us right now. We are at a very early part of the journey being a part of the global Castrol. We do benefit from the research and development which has brought us to this place where we have a solution for cooling in data centers.
Very small in India today. And given the role that India will play in overall data centers for the world, more so looking forward, indeed, we do think it’s a good opportunity for the future. Shout over to you.
Nitin Tiwari
Yeah, I’ll just build on what Linny was saying. I think two things. It is a market which is, which is growing fast. It’s also changing quite quickly and fundamentally. What large data centers require is to cool the servers which are immersed into liquid that can conduct heat, but not electricity. The technology that was used and used in many other places today is pure air conditioning that is moving to emotion coolant. So opportunity is evolving. It is moving very fast. We think it is going to be a big, big market out there. We have trials that are ongoing and we will see, you know, how, as the market stabilizes, what is the size of the opportunity? Still at a very early stage to project.
I, I understand that, but I suppose it’s an early stage in India, but can you help us with any, any figure?
operator
Mr. Ti, your voice is also muffled, so if you could use your handset, please.
Nitin Tiwari
Sure. Just give me a moment. Is this better than before?
operator
Yes.
Nitin Tiwari
Yeah. So I was saying sober, if you can help us understand from any of the figures that we can source on Castlow Global in terms of how much data center demand is cast for global catering to, and that will help us have an understanding on the potential for demand in India, I won’t be able to comment on the global demand, honestly, because. But what I can tell you is large demand is coming out of markets such as the US out of China, parts of Europe and India. Of course. And again, as I said, you will have seen all the announcements on Tera, WhatsApp, data centers being created, but a lot of that is very early Stage of execute and at this stage it’s not completely clear what is the technology that is going to be used on.
Saugata Basuray
Right. So as I mentioned, it is something which will evolve and that’s the case even globally.
Nitin Tiwari
Got it. Fair enough. Thanks. Thanks so much for taking my questions. I’ll get back in the queue for more. Thank you.
Saugata Basuray
Thank you.
operator
Thank you sir. The next question is from the line of Sabri Hazarika from MK Global Financial Services. Please go ahead.
Sabri Hazarika
Yeah, good afternoon. So looking at your annual volume run rate of say around 240 to 50 million liters, are you like fine with the current capacity of your plant or is there a thought process of like expanding capacity or something like that? Yeah, look, we have been going very strongly as you picked up and we have three to answer in India we feel that we are adequately equipped to release capacity. There are always process transformation programs which are in play and we’ll be able to support the growth for the next couple of years at least.
Okay. And I think you mentioned CY25 capex to be somewhere at around 130, 140 crore. So I think 150 crore. So that is the run rate we can expect going ahead also. And CY25 was 150 crore. Was it different?
Mrinalini Srinivasan
Let me take that question. We invest Capex and really it’s a growth driver for us. We invest in two forms. One is in our plants and building capacity for innovation like Shoghata just spoke and making sure that we can enable all the new launches that he also spoke about in which is about half my capex. We also invest Capex in growing in our, you know, to enable our distribution growth. So in our dealer boards as well as in the market and you know, a rural service express investment as well. So Overall between the two buckets we spend about 100 crores of capex and that is the trend that we have demonstrated in the past.
As we look forward, what we know for sure is we will invest when the investment pays out. And given our strong structural margins, we know that every time there is a growth proposal it pays out. So capex is not a constraint for us. We have kept a healthy cash balance sheet and we would invest wherever there.
Sabri Hazarika
Is a business need. Right, got it. And just one small follow up. Your dividend payout this time has been around 91%. I understand in CY24 there was a special dividend, but is 90, 91% the sustainable rate right now for dividend payout?
Mrinalini Srinivasan
Indeed, that’s a good question. And I’m hoping the shareholders are happy with the given out right now 90% is industry leading payout ratios and I’m very happy that we’re able to do that. Last year was the celebration of the 125th year of Castrol because of which we had globally, because of which we had given that special dividend. And we always look for such to sort of delight our shareholders. Nonetheless, even without those special dividend payout. Dividend Payout is usually 4.8, 4.5% and that’s something we really want to see.
Sabri Hazarika
Got it. Thank you so much. And all the best.
Mrinalini Srinivasan
Thank you. Thank you so much.
Saugata Basuray
Thank you.
operator
We’ll take the next question from the line of Lokesh from Ionion Capital. Please go ahead.
Unidentified Participant
Yeah, the first question is to return to the BP, the patent company recently announced its selling stake, 65% to be precise, in cash for global global lubricant business. So how could this impact Indian shareholders in terms of like brand licensing agreement, R and D support from BP’s global centers and basically long term strategic direction under ownership.
Saugata Basuray
Right, thank you for the question. Let me try and address that. And as you rightly said, the global announcement was made in December, which was subsequent to strategic review that was also flagged early in the year. So the parent level BP has signaled that they will form a joint venture with an investor where BP will remain a 35% shareholder investor will take.
I must caution that this is all subject to regulatory approval and we expect the transaction at some point to close toward the end of the year. As and when that happens, there would be any regulatory related disclosures to be made that new shareholders would do that. To your question on what may or may not impact very early, it’s business as usual for us over here and Castrol and India particularly remain a very big market for Castrol globally and we are focused on executing on our plan. And we think that those are the matrices which have created that kind of value for our shareholders, including the ones who have invested.
Unidentified Participant
Yeah, thanks for the reply, sir. And the second one is with regard to EV Fluids. We have been talking about EV Fluids for a few quarters now. Can you give us any like quantitative update with regard to OEM approvals received in India in the last 2012 months or the current run rate of EV fluid sales and the kind of margin expansion that we see with EV compared to ICE products? Right. Okay. So look, the demand for EV fluid is directly proportional to the number of EVs being sold in a year. Right. And you would know from public, I mean publicly available information that the number of two Wheeler EVs is roughly 10% of the total new vehicles sold in each year and in cars at about 5 to 6%.
Saugata Basuray
Okay. The good news is that we have access to the best technology on the EV fluid front which is developed by a global team. We have a center of excellence in Europe on EV fluids and in India I think stand today about 70% of the OEMs, especially in cars, they have approved gastrol products and they used in a lot of the vehicles over here. But again the population is quite small so therefore it is not a material part of our business today. But we have prepared and ready to cater to that demand as that business scales up.
Unidentified Participant
Yeah, I get it sir. But just a bit on that. How would we see the margin expansion that we see? How is there any like higher margin so it be EV fluid sales compared to ic? So there’s certain segments in which the EV margins are better. Like when you say ic, there are a whole range of products that we sell starting from commercial vehicle engine oil, we have grease gear oil and then we have the high end synthetic products that go into cars. All those margins are higher on, on a aggregate basis I would say the EV margins would be at the same range as if you have a core automotive business.
Yeah, that’s a great clarification sir and thanks for the update. Thank you very much. Thank you sir.
operator
We take the next question from the line of Vijay Pandey from Nuwama. Please go ahead.
Vijai Pandey
Hi sir, thank you for taking the question. Sorry, this is first time coming to the conference so you know I may not be well worth with the my details about previous calls. I wanted to understand how are we, what is our expectation because of the upcoming EV growth? So how do we see the transition in between the from that? So how much impact will it be on our number going forward in midterm as well as in the long run? And in the case of because of the increasing PHEV and hybrid sales, does that also carries lower contribution? Like does PHEV and hybrids have a lower sales for Castro? Is it that similar level as compared to ice? So that will be my first question.
Saugata Basuray
Right. Okay. So I, if I’ll. I’ll rephrase or I’ll recap the question you mentioned said because the voice was not very clear. To make sure that I’ve got it. You are asking what is going to be the impact of the transition into EVs in mobility space in the medium and long term. And does hybrid also have an impact on demand for lubricants Is that. Are those your two questions?
Vijai Pandey
Yeah, exactly. Okay, thank you. Got it. So the first thing I would say is, look, we believe that the transition to low carbon mobility is going to have multiple pathways for that.
What do I mean by that? I mean that there are efficiencies to be had in the existing ICE powertrains which is already happening and the regulations that are making those engines much more efficient. Then there are multi fuel engines which are being introduced in the market. So you have a lot of manufacturers now selling vehicles which are either on cng and even some people are experimenting in heavy commercial vehicle with LNG. And then you have hybrids and EVs. And all of these are happening in service of efficiency and bringing down the carbon intensity in mobility space.
So the second point I would make is the penetration level of personal mobility, especially in India, is quite low today when you compare to middle income and developed markets. So the headroom for growth on motorcycles and cars remains very robust. And we can see that in terms of the growth that you see in new vehicle sales registered last year. So there are about four and a half million cars being sold in the country and there’s another 18 to 20 million two wheelers being sold in the country. The contribution of pure EVs within that today is still small.
Okay. But the contribution of multi fuel or alternate fuel vehicle, cng, lp, glng, all of that is growing. All of them, along with hybrids, require lubricants. And we have products, in fact for hybrids we have a new range of product called high specific. And all of those are available but estimated in the medium term. In India, hybrids and ICE will remain the backbone of the market. And as and when EVs do scale up, we have taps with all leading OEMs in two wheelers and in cars and we will cater to that demand too. I hope that answers your question.
Yeah, partially also. So does the EV also.
operator
Mr. Pandey, I’m sorry to interrupt you. There is a lot of background noise at your end. Sir, I would request you to move to a quieter place and also please your handset to ask questions so that we have more clarity on your questions. Thank you. You may please proceed.
Vijai Pandey
Is it okay now?
operator
Yes, so much better. Please continue.
Vijai Pandey
Yeah, so I wanted to take the. So does the EV also required like the requirement of lubricants as EV should be lower than the requirements of lubricants and ICE and hybrids. Is this understanding correct?
Saugata Basuray
On a per unit basis, an EV will require less, is likely to require less number of liters of product. The application of lubricant, application of fluids and EVs can be in two places that and, and it’s evolving with a certain battery that require emotion coolant technology where you know, the coolant enables faster charge and better discharge rates for the batteries and therefore prolong the life of the battery.
And that is a high value product. And there are certain cases where the EV transmission fluids have dielectric coolants in that whereby it cools, cools the motor, the transmission at the same time, you know, it removes heat but does not conduct electricity. So the application or use cases change. And these are differentiated product and therefore not something which we can compare clearly with the lubricants that are going into ice engines. Okay, okay. And if I consider as 2013. So how do you see our product mix changing between autos and industrials and within autos, the hybrid, ICE and ev.
If I just comment on that, see the question to up to 2030 the contribution change between automotive and industrial and within automotive the contribution change. Is that your question? Yes. Yes. Okay. So today predominantly our business has been automotive. But we have, we have informed all our investors a couple of years back that we want to scale up in industrial. And the industrial business has delivered double digit volume growth. Our core businesses delivered single digit high single digit growth. I anticipate that profile of growth from industrial segment will continue. Okay. So therefore over time going up to 2030, which is just about six years, about four years away and the contribution of the industrial business on the volume side is only higher than what it was and what it is in 2020, what it was in 2025.
Within the core lubricant business, we see growth coming through in all three. That is a commercial vehicle, cars and bikes, different parts of the country are growing differentially. So our two wheeler business, motorcycle business is growing very strongly driven by our reach into rural India where based on, you know, media reports you will see that anywhere between one and two or one and three new two wheelers are being sold in rural India. And that’s why we have invested heavily in terms of increasing our distribution rural India in the last few years that is bearing results.
We anticipate that will continue. And that’s what is going to drive our motorcycle category growth. Where we have leading, we have a market leader with a brand called Castrolactive. In cars, it’s a big city play. Again, we are leading in the market with a brand called Magnetic and gtx. We anticipate that is going to grow faster in terms of percentage growth compared to two years because just because the penetration level of cars is quite low in the core commercial vehicle business, the resilient low single digit growth which is linked to high growth of freight there.
We anticipate the business to move beyond the diesel as I mentioned earlier, the multi fuel vehicles going in the market. So we have products which can be used or which are used in powertrain that use CNG in commercial vehicles we also have products that are used for last mile mobility, your sub 1 ton delivery vehicle that you see in cities and that will contribute to the growth in commercial vehicles. But those are going to grow at low single digits. Okay, okay. Thank you sir and all the best. Thank you. Thank you very much.
operator
Thank you. The next question is from the line of Dhaval Popet from Choice International Ltd. Please go ahead.
Dhaval Popet
Congratulations on the results and thank you for the opportunity to ask question. My question is on basa. So I see a recent announcement where there has been partnership with HPCA and it has been trying to revive the used engine oil for base oil. So I understand 50 to 55% of base oil is currently imported and so can this percentage go down going forward and how much incremental payroll oil can be procured from this partnership? My question is finally to do with your gross profits or more you get it domestically, the lower the impact of FX and higher the profits.
So how do you see your B being procured locally? That’s my first question.
Mrinalini Srinivasan
Let me take that firstly back. I remember speaking with you last time as well. So you are right. We do import about slightly more than half of our base oil is imported and the rest is bought low locally. And that is a trend I believe we would like to continue because as we buy locally we save a little bit on freight and it’s better cost for us. It’s also better response like lower inventory, lower lead times. It’s the right strategy. That being said, I heard your line question within that was does it really protect us from the, you know, the foreign exchange exchange fluctuations there? Incidentally it doesn’t because end of day base oil is a commodity and it does, it is really back to the dollar price that is a globally tracked metric.
So while we save a little bit on cost, what we don’t really protect ourselves is on foreign exchange fluctuation which is why our discipline on cost saving, on pricing and on hedging is very important and we continue to focus on those strategies. Did you have any other questions related to this? The HPCL mou. So let me hand over to Shoghazar and he can talk about that.
Saugata Basuray
Yeah, I think on the HPCL piece that is a MOU that we have signed with HPCL to explore the two companies coming together to explore what can, what we can do to help and develop a base oil audio ecosystem in India. So one of the, one of the big challenges that we have determined which is coming in the way of a very vibrant RR ecosystem in India. The challenge on collection and last mile collection and given the reach of Castro and HPCL in different segments, we are exploring what could be ways of working together to try and get that going.
And that in itself should then help at some stage to develop an RRBO wide RRB industry in India. So that’s at a very early stage of scoping out. Okay, that helps. And I understand you domestically Procure bezels from PSUs and IOC are coming up with more refineries or more output of base oils. So is there already some contracts in place? Are you guys already talking to them regarding procuring domestically or can you shed some color on that?
Saugata Basuray
Yes. So we as you rightly picked up, we source base oil domestically from the PSUs and there is new, new.
There’s a new basal plant that IOC has commissioned with Group 3. So we are in conversation with them and as and when that scales up and other as requirements creep up we always look at what is the most efficient way to source our wasoil and we are quite, quite agile and tactical in terms of making choices as and then opportunities open up to bring efficiency.
Dhaval Popet
Okay, thank you.
Saugata Basuray
Thank you.
operator
Thank you. Thank you sir. The next question is from the line of Mandira A from Investo. Please go ahead.
Unidentified Participant
Thanks for the opportunity. So I have couple of questions. Could you please share the current revenue mix between B2B and B2C segment and additionally what is the product mix breakdown within automotive segment specifically from on PCMO and MCO category. Let me give it a shot Manjana. The. The. The industry is still heavily retail focused. So I, I would say almost about out of my automotive sales 65, 70% still is in you know in the retail segment balance would be let’s say in franchisee workshops etc.
I think your second part of the question was about industrial versus automotive. Is that correct? Yes. Yeah. So I think Shabrato alluded to this earlier. Automotive is a big part of our business today. Industrial is still relatively small at about 1213 but growing very fast and we expect that share to go up. Okay. Additional what the advertisement and promotion spend as a percentage of revenue for most recent quarter. So you’ll see these in our published financial results. We maintain it actually at a healthy 2,3% as financial year 25. We close at a 3% of revenue into advertising and sales promotion.
Great, great. In the recent commentary you mentioned continuing the to strengthen the relationship with key OEMs. So which new automotive OEM have you fed up with?
Saugata Basuray
So we continue to work with the largest OEMs in the country which is again in the public domain. We worked at the Tatas, both commercial vehicle and passenger cars. We’ve been one of the early partners of Maruti Suzuki when commenced operation in in the country we work with two wheeler OEMs as well as with some of the EVs which we talked about. So Tata passenger electric car and like. So the point that we made on the, on the announcement we continue to invest in strengthening that relationship. For example in off road side we work with JCB and we keep we develop products which specifically meet their requirement and that is what we have invested in so that those are the relationships that we continue to nurture.
We also made an announcement a few months back that we assigned an MOU with Winfast as they enter the country and help them meet the requirement for after sales service for the EV cars.
Unidentified Participant
Got it sir, that. Thank you. That was really helpful. Thank you.
operator
Thank you. We’ll take the next question from the line of Vipul Kumar Anupchand Shah from Sumangal Investments. Please go ahead.
Vipul Kumar Anupchand Shah
Hi, thanks for the opportunity. I was disconnected from call for 510 minutes so I don’t know whether my question has been answered or not. So can you give the split between automotive and industrial and within automotive what is the sub segment like two wheeler, four wheeler and commercial vehicles.
Saugata Basuray
Mr. Vipul, good afternoon. Indeed your question was picked up just before the Zalini. So I’ll reiterate what I said earlier. Our automotive business is the largest part of our portfolio historically and remains so industries around 10 to 12% growing. So automotive is going in high single digit, industrial going in double digits.
So the ratios will change. Within automotive we have a very diversified business. So we have a sizable commercial vehicle business which goes into trucks and agri. We have a market leading position in motorcycles with Castrol active with the largest operators in that segment. And we have also got a market leading position in cars and therefore across all three we are material players and that contributes to very diversified and resilient business in automotive. So what is your overall market share and how it has moved over say last two years? So market share has gone up in the automotive Side So if you, you look at Nielsen, the third party, you know, provider of market share in the automotive space of market share gonna buy 50bps at the end of the year and it is in the early 20s.
Is that an overall automotive level covering commercial vehicle cars and two wheelers. Okay, thank you sir. Thank you.
operator
Thank you. The next question is from the line of Harsh an individual investor. Please go ahead.
Unidentified Participant
Yeah, so I was asking we get a volume based discount for the volume that we sell from our parent in the December quarter. Right. We get volume based discount from our suppliers of base oil and some of those contracts are global, so comes from the suppliers. Okay. And it’s in December quarter. So did we get to get that in this quarter? And I just wanted to understand because usually we see a margin hike in the December quarter, whereas this quarter I just wanted to understand what happened. Did you know the Forex eat our that hike that we get?
Mrinalini Srinivasan
Maybe. Let me take that. Harsh. I in fact alluded to this earlier in the commentary as well. I’ll just answer this question from an EBITDA standpoint, average for the year at lows at about 24% EBITDA. Whereas if you see Q4 margins were healthier at 26% and that’s actually the primary reason for the quarter four EBITDA margins being high. And you will see this as a trend in every year because these days oil rebates come to us at the end of the calendar year.
Unidentified Participant
Okay, fair enough. And my other question was when do we take our annual price hikes and what sort of price hikes can we expect in the next year? So we look at the market, we benchmark ourselves to our key competitors and we have a certain price range within which we operate. At the same time, we are very mindful of the cost inflation, currency movements. So as and when there are opportunities where we see we are bringing new innovations in the market or we see the cost inflation going beyond the range that we operate in, we take pricing action then.
And that’s what we have done. That is a approach we have taken for the last several years and we’ll continue to remain in that way. So, so it’s not a, it’s not a fixed time thing. It’s as and when we see something pop up, we act according to. Okay. Okay, fine. Thank you. Yes.
operator
Thank you. Before we take the next question, a reminder to all the participants that you will please press star and one to ask questions at this time. The next question is from the line of Keshav from Kotak, please Go ahead.
Keshav
Hi, I just had one question. What is the reason for more than 200 decline on bio y EBITDA margin? So last year if I can see the EBITDA margin was closer to 27.8% in 4Q and this, this year it is somewhere around 25.5%. So what’s the reason for that?
Mrinalini Srinivasan
Let me take that. Kesha, thank you for the question. Indeed you have spotted the trend, right? It is on a percentage margin basis it is a. It is lower versus same quantity quarter last year. And I think the reasons are few of the factors that we’ve discussed in the call. For example, structurally we know that we are growing faster in the business versus the automotive industrial business and that will have a certain play on the margin. Secondly, because I’m sure you are also very aware the foreign exchange exposure to Euro has been very very steep in the fourth quarter.
So from a macroeconomic lens standpoint we did have an input cost inflation and like Shabbato just said, we don’t take knee jerk reactions. So we have a structural intervention in play to address such macroeconomic trends. And those structural interventions take some time to hit the market. And hence Q4 saw a little bit of dilution behind those macroeconomic trends as well. And then so overall nonetheless, like I just shared with the previous question also we landed at 26 crore percent of the as an EBITDA margin which is still beyond our guidance of 21 to 24%. So I think we still in a very healthy zone.
Keshav
Thank you so much.
operator
Thank you. The next question is from the line of Viraj Yatish Mathani from Jupiter Financial. Please go ahead.
Viraj Yatish Mathani
Yeah, my question is regarding data centers. The colon present data centers. Can you give some color on that when this business would become starting and what kind of growth we anticipate in this? Actually the growth percentage is not. Is not the main criteria because the business is very small today. So it will rapidly grow on a very small base. When will it become material is a bit difficult to project at early stage because the data centers had evolved in UN still at an early stage of execution. So we’ll have to see how that space evolves into data centers being established.
And then there is also a technology change that is happening. The early data centers are being cooled conventionally with conditioning. The new data centers in surge of efficiency and scale are looking for emotion coolant where they. Where they dip the server inside fluids. Emotion coolant fluids as they call them, which are dielectric and that is where these products are sold. So there’s one element which is to understand how far the new data centers are executed and put on the ground. And the second bit is to understand how many of them and how quickly and helps people scale up and run data centers efficiently.
So we need more time to quantify, to understand how big that opportunity could be. I think it’s good four or five years away, right? Could be, could be, could be sooner than that too. Okay, thank you. Thank you, sir. And all the best. Thank you.
operator
Thank you. The next question is from the line of Jay Shah, an individual investor. Please go ahead. Hello. Yes, please proceed.
Jay Shah
Hello, sir, in previous concourse we have mentioned all the pilot study being done with the data center players for the liquid cooling technology. Can you give some any further update on the same?
Saugata Basuray
Yes, I can tell you that there are those pilots that are happening in India, our global technology center of developing data center fluids in the UK and we have a team which is looking into it and they’re working with certain large hyperscalers in India to develop that. We also have a tech center in India and which further optimizes some of these products to make them suitable for use in India.
And we continue to work with some of the people who have announced data center data center projects for India. So those pilots are still on. Would it be possible for you to name them and when can we expect the commercialization of the thing? Well, you can understand I can’t name them. It is their business, so that won’t be accurate, appropriate for us. All I can see is that we are working very closely on the tech front to help them solve for removing heat, which enables them to operate data centers more efficiently. And that is where our technology comes into play.
Both the global technology center in the UK as well as the work that our technologists in Patal Ganga, which is near Mumbai do to optimize the products for Indian environmental conditions. So as and when some of those arrangements close and those data centers are, you know, scaled up, we would, you know, make the necessary disclosures and announcements. All right, sir, thank you.
operator
Thank you. Thank you, ladies and gentlemen. We are at time. This brings us to the end of the call on behalf of Kestrel India limited. Thank you for joining us and you may now disconnect your lines. Wish you a good day ahead. Thank you.