Motilal Oswal has issued a buy rating on Castrol India with a target price of ₹250 in its research report dated February 04, 2026. According to the brokerage's analysis, the stock is valued at 24x December 2027E EPS to arrive at the target price. The recommendation comes despite the company's recent quarterly performance falling short of analyst expectations.
Castrol India's Q4CY25 results showed mixed performance with volume growth of 8% year-on-year to 63.7 million litres, as reported by Motilal Oswal. However, EBITDA margin contracted by 230 basis points year-on-year, indicating pressure on profitability despite volume expansion. The company's adjusted PAT was 12% below estimates at ₹2.6 billion, with EBITDA and reported PAT missing estimates by 10% and 17% respectively.
The company recognized incremental obligations of ₹225 million related to new labor codes during the quarter, according to Motilal Oswal's analysis. This additional cost impact contributed to the overall performance miss against analyst expectations. Despite the quarterly challenges, the brokerage maintains its positive outlook on the stock's long-term prospects.
Motilal Oswal has reiterated its BUY rating on Castrol India despite the recent quarterly performance shortfall. The brokerage's target price of ₹250 suggests potential upside from current levels, based on their valuation methodology of 24x December 2027E EPS. The recommendation reflects confidence in the company's long-term growth prospects despite near-term operational challenges.
