Gulf Oil Lubricants share price jumps 7% after ICICI Securities initiates coverage with a 'Buy' call; sees 25% upside

livemint.com:

₹1,076.90 apiece on the BSE. ICICI Securities has a target of ₹1,250 per share for Gulf Oil Lubricants India, implying an upside of 25% from Saturday’s closing price.

Gulf Oil Lubricants India is the second largest private player in the petroleum lubricant space, with an estimated 7-8% market share in its focus segments of automotive and industrial lubricants, as per the company. While the overall Indian lubricant industry has decelerated at 0.8% over the last five years, which is FY18 to FY23, Gulf Oil recorded an impressive volume CAGR of 17.6% over the same period.

Also Read: Adani Ports share price hits record high as cargo volumes surge 33% in February “The company has managed to demonstrate impressive resilience and brand strength in the extremely competitive lubricants space to grow market share and improve margins as well. Additionally, with an aggressive build-out of distribution infrastructure, brand spends, new product launches and new segment entry, Gulf Oil Lubricants is emplacing the building blocks for sustained growth over the next 3–5 years," ICICI Securities said in a report.

It sees Gulf Oil Lubricants tracking consistent positive business growth over FY24-27E and in the base case estimates, the brokerage bakes in 6.7% CAGR in volumes in the core lubricant business while the smaller AdBlue segment should show a faster 14.7% CAGR over the next three years. “What enthrals us further is the increasing demand potential of Electric Vehicle (EV) fluids and industrial fluids, negating any potential slowing in traditional ICE vehicle lubricant demand in the longer term.