Castrol India Limited analyst Q&A

Thank you, Mr. Lele. We will now begin the question and answer session. We'll take our first question from the line of Harsh, an Individual Investor.

So, congratulations to the team for another good qu arter. I was just seeking some clarification in terms of the direction of the company. So obviously, we had a leadership change recently and then we are expected to have another leadership change, right? And we saw with the leadership change how we now ar e trying to tap into new products, aftercare products as well as building up our indus trial portfolio, so on and so forth. So I just wanted to know with the new leadership coming in, should the investors expect a change in the direction or will we continue to focus on our new products as well as the old segments?

Thanks, Harsh. I should first thank you for your ki nd remark. And I must also tell you that Mr. Saugata Basuray, who's going to be taking over from me as of 1st of Jan, is a quality product of Castrol having spent 26 years in the company. And this year, we did not change the direction of the company. We simply brought alive what we had be en saying for a while with a lot more execution focus. And Saugata is part of the leadership team, which designed, deployed and executed that strategy. So -- and it's working for us. We have seen now 6 q uarters of growing momentum. And with that, a good balance between volume growth, profitability delivery as well as innovations. So as long as -- as far as I see, there's no chang e of strategy in the near or midterm. Of course, there will be some decisions that will happen basis the strategic review outcome of Castrol, which should strengthen our play in India and South Asia. And I'm more than excited about what future holds for Castrol in this geography.

My second question was we have some INR400 crores, INR500 crores invested in ki Mobility Solutions. So could I just get an update on how that investment is performing? And any basically quarterly or yearly updates on that?

Yes. That's another great question. Now I think we have -- it's been over 2 years since we invested in KMS. And like any prudent organization, every year, twice, we look at the value of that investment, and it gets audited by our auditor as well. And we are maintaining the value of that investment as ki Mobility goes through its own expansion plan as well as pivots that they are having. As you know, ki Mobility is one of the largest mul ti-brand service network, opening new outlets. They've also gone into a corporate franchisee route and building a very sharply differentiated ecosystem of digital services, which includes digital spare parts catalog, ordering app as well as integrated workshop management systems. So it is allowing us to learn a lot about what hap pens in the service environment. It is also allowing us to make our brand and our products available in those workshops and of course, use them as our partners as we start expanding CAS offerings. So no change from what the blueprint of our investment was, and we continue to remain committed to ki Mobility Solutions.

And so what about like the revenues and profits, if any, from that?

So see, it's a private company and our investment i s predicted, as I said. And the revenue that we get is from sale of lubricant into that network. We also get a small commission on sale of spare parts in that network and so on. So that is a small part of our revenues, and we don't identify that in our results as yet. But it is consistently meeting the expectations that we had set aside for that business, for both revenues as well as learning.

We'll take our next question from the line of Dhaval Popat from Choice International.

Congratulations on good set of numbers and also on the margin expansion. I understand on the industrial lubricants as we take over the automotive over the next 3, 4 years and the company is already present, I understand, in the premium segme nt of the industrial lubricants section. But how would you ensure that the margins do not dilute from here on as far as the overall -- on the back of industrial lubricants component is concerned for Castrol? That is one question I have?

Yes. So the second part I wanted to understand is that the key investor question, of course, which, of course, lubricants face is the EV penetration. And I understand that the company already has EV fluids, but it's just 30% to 40% lubricants that being used as compared to engine oil. So what is the company's strategy or I would like to hear your thoughts about the same?

Thanks, Dhaval. I always remember you come up with great questions. Last quarter, you asked about strategic pricing. So let me first clarify th at industrial is a very large segment when you look at the universe of industrial lubricant requirement, right? But our play is limited into higher end of that industrial lubricant. We don't play gen eral industrial, which is an undifferentiated product, which is almost 60%, 70% of the volume. Now what do we play? We play high-performance lubr icants. We play metalworking fluids, we play rust preventers and so on and so forth. We also play something that I call as CMS services, chemical management services, which in one line is takes lubricants off the mind of manufacturer, reduces the total cost of ownership, reduces the breakdowns and hence, efficiency goes up. That's really the offerings in industrial. We are also expanding into newer sectors, which ar e the growth sectors for India, which could be steel, cement, glass and so on, like I mentioned in my prepared remarks. Having said that, you must know that about 12% to 14% of our volumes come from industrial, and they are growing in double digits. So over the next 10 years, how much ever -- how mu ch faster we grow industrial, I don't see industrial being larger than automotive, right? So it's a good emerging part of our business, which we want to focus on because industrial will remain protected from EV transition, and it's a very long-term strategic focus of the organization to expand. Having said that, you would appreciate it, Dhaval, that industrial lubricants, how much ever high performance they may be, will never make same money or margin as automotive lubricants do, right? Because it's an industrial COGS. And hence, I keep saying that we have to balance how much growth we get from industrial versus the profi tability growth that we must get from ICE engines as well as EV fluids. So -- and I should give you a good sense to unders tand if automotive lubricant gross margin is 100 index, then lubricants in industrial will be less than 25, 30. That's a good way to understand the profitability headwind that you will have from pure industrial guide, right? If you look at some of the global majors in indust rial lubricants, they make single-digit EBITDA versus what you are used to seeing with Castrol in the 21% to 24% kind of a range, correct? So we will have to remain cautious, smart and balance the requirements of the business while we make this business future fit by investing into industrial as a pillar of growth. Now your second question is about EV fluids. See, I'm also concerned about it because if you drive an EV car, there is no engine. So you are not going to replace the engine oil like you do once or twice a year. But an EV vehicle also uses f luids. For example, there is a transmission fluid, there are greases that you have to use and E V vehicle tends to be heavier than a normal vehicle, which means that the rotating parts require more frequent maintenance. And if your battery tends to use a coolant, then w e also make that coolant. So -- and I'm not getting into profitability just now. But if I were to do a broad CLTV analysis, customer lifetime value analysis of lubricants in a vehicle for 5 years versus transmission fluid as well as coolants in an EV for 5 years, it will be a comparable number. It won't be too way off. So as long as the organization is clear and commit ted to ensuring that our innovation, our range offerings and our products are available for this e nergy transition or EV transition that's taking place, we should keep seeing a business that grows with time.

We'll take our next question from the line of Nitin Tiwari from Phillip Capital India.

I'm sorry, I joined the call a little late and if y ou already answered this, I'm sorry for this. But just wanted to understand the volume number in this quarter. And if you can also provide some color on that volume in terms of how much of that was automotive and how much was industrial and within automotive breakup between personal mobility and commercial vehicles? That would be the first one?

Yes. So Nitin, thanks. I'm sure you will look at the recording later again. But volume growth has always been the focus of Castrol in recent years when we started playing for sustainable volume growth of the business to get benefit of scale and also to get higher number of consumer franchise across our brands. Now this quarter, specifically, we have delivered 7% volume growth, which brings our YTD volume growth to 8%, right? So -- and if you rememb er the industry numbers, it is way ahead of the industry bottom line volume growth. So we ar e growing faster than the industry consistently. That's the first good news. Second is, if you were to break it into personal m obility, CVO and industrial, which is typically the flavor of growth that you are interested in, our personal mobility has grown at over 6%. Our CVO has grown at about 8% and industrial is in good double digits.

Yes. I was saying that if you can provide me a brea kup of volume and percentage terms, percentage of the volume in terms of automotive and CV, etc. I really appreciate you provided the growth number?

Yes, you heard the growth number. And see, we have put these numbers every quarter in our conversations with analysts and the numbers don't change too much. So industrial, marine does about 13%, 14-odd percent. CVO does about 38%, 40% and our personal mobility is balance, which is 48%, 50%. And depending on the quarter, many a times, you will know that the Q3 is a quarter when there is low agri, low CVO, Q2, summertime is the high CV O months and high agri months. Q4 will also be high agri months. That's why I'm giving you a range and percentages. And hence, these numbers are usually range bound and stay within that.

Thanks.

The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund.

One question on the strategic review of Castrol. Wo uld you be able to share at what stage the exercise is and when is the outcome expected? And a t the India level, have we participated any data room exercises or something where buyers have started to look at it in a bit more granular details?

As you would appreciate, Kirtan, I'm committed to e xpressing any update that comes to me to the regulator and the market within 24 hours. And y ou know exactly what I know as of today. And I'll repeat, BP announced the strategic review of our Castrol business globally around February in this year, if I remember right. And the intention was very simple that they acceler ate Castrol's next phase of value delivery while BP retires some of its debt by giving the val ue of the assets called Castrol. We have significant growth ambitions across the world, whic h includes growing our core mobility business, expanding our participation in industrial lubricants, enhancing our mobility services as well as diversify into data center fluids. And we believe that this strategic review outcome considers all those options with a focus on true value creation. So it's a good opportunity to determine how we can become even more effective and innovative business partner to our customers. And we aim to ensure that any outcome of this revi ew helps us continue to accelerate our growth momentum and ambition, not just for India but beyon d. Like you said, all parts of the performance units, India or South Asia is one of the performance units. We have been supplying data into a data room for p otential investors, and that gets run from our central team bound by the NDA and administered by BP's global M&A team directly. And I do not participate in any of that transaction.

A couple of more questions on the operations. You s hared sort of growth across 3 different verticals. Would you also be able to share growth in terms of the rural, how much it contributes at this point of time? And what is the growth that we are seeing from our rural penetration? And the second question was about the base oil. In the opening remarks, we referred to the base oil volatility. Last year, when we have seen it, I think base oil price sort of had a bit of delinked with the crude oil price. So are we now seeing this sort of responding to the crude oil? And does it open up opportunity for sort of reducing the cost levels?

Yes. So I should tell you something on the second p art of your questions first, right? So if somebody asks me, is base oil price connected with crude oil, I'd say there is definite causality. But correlation is low, right? So if the base -- if the crude goes to $100, would base oil be expensive? For sure, 100%. Well, it will take some time. If crude oil drops to $50, will it become cheaper tomorrow? The answer is not tomorrow. Event ually, it will. But how much? Time will tell. Now with that, this year, we have had about 3.5%, if it's a range bound, but I think it's about 3.5% reduction of our cost of base oil is what we'v e seen, YTD. And a similar inflation is what we have seen in forex. So net-net, we have a small, small, very small reduction of our COGS based on base oil and the forex combination, right? So that's the first point I thought I should tell you. Second is the question that you've asked. So I thi nk I've answered that. You can give, if there is a color on that, yes. Second question was about how much do we get out of rural. Now I can tell you that there are about 40,000-odd outlets in rura l that we service directly. And we also have close to about 500 rural service express that we ca ll as Castrol kiosk, right? And I spoke about that. And these 2 put together give us a sustainable double-digit growth year-on-year. So -- and rural volumes, if I were to just think a bout what kind of rural volume do we get, it's a sizable 25%, 30% of our B2C numbers. I wouldn't, of course, put an absolute number out there because competitors are always watching for my recording of analyst calls. But suffice it to say that close to 25% of our B2C volumes are now beginn ing to come from rural and growing in double digits.

We'll take our next question from the line of Vipul Shah from Sumangal Investments.

So what percentage of our base oil requirement is i mported? And what percentage is domestic sourced?

Yes. Maybe let me take that, Vipul. Thank you for t he question. Today, almost about 50% to 55%, slightly more than half of our base oil comes as an import. The balance is all procured locally. But I -- what's interesting for us as we navigate the supply chain is that actually base oil is a commodity, globally traded and hence, prices are almost globally landed. What we're able to do when we get it locally is we 're able to get it at a lower lead time and there's a little bit of logistics costs that we're able to save. And on the imports, we actually -- we use -- we buy from some of the large players in the market, and we hence are able to negotiate a good rate because our buying scale goes up as well. So while there's a split of domestic and import, I think on a cost basis, we have found the right advantage of sourcing.

And my second question is, can you give the volume in million liters for this quarter and same quarter last year and last quarter also?

Are you looking for overall top line volume or base oil volume buying?

No, volume in liters, sir.

Yes. So overall lubricant volume liters. In fact, I'm very delighted, Vipul, you asked this question every time. Last time also, we were telling you we did 62 million, 66 million and 61 million. And again, I should tell you, if you were to look at this year's 3 quarters, 63 million liters in Q1, 66 million in Q2 and 60 million liters in this quarter.

And I hope you understood what Mrinalini was trying to explain. In base oil, there is no advantage of buying locally. That's the point that she wanted to make so that all of you appreciate it because base oil, whether you buy from imported source or local, pricing is the same. What could benefit is just-in-time supply. So we don't need to hold on to that in our working capital or in our storage. So base oil in India is short supply, and hence, we have to rely on inte rnational providers of base oil, and that will continue. So like Mrinalini said, a great strategy is to get a right combination of 56-44, 58-42 depending on the quarter and availability to suit the requirements for the business. Thank you.

We'll take our next question from the line of Manda r Pawar from Kotak Mahindra Asset Management Company.

Congratulations to the team for excellent numbers a nd wishing you all the best for your next endeavour and also to Saugata, who will take over. I have 2 questions here. So first is on the previous question where you talked about the gross margin expansion. You talked about the benefit of the -- some bit of net benefit on the CO GS. At the same time, there is also, we have seen the realizations have improved on a sequential basis. So can you confirm if there have been any pricing actions which have been taken in the market which has to expand? And the COGS benefit also whet her that is sustainable going forward because we are comparing this to the peer who have reported and such benefit is not specific. I understand there is a mix change, but if there is a nything different other than the mix change, but if you can confirm that. Second question is on the -- we have previously in the call also been talking about the data center opportunities. And even in recent months, we have s een more announcements coming on that front. And within that, the adoption of liquid cooling as compared to air cooling. Can we -- are we in a position to analyze as to wh at could be that opportunity be in terms of the units, litres,opportunities, etc., or realization, how different it can be as compared to the current average realization of the portfolio?

Mandar, let me take your first question. And then maybe for the second question, I'll ask Kedar to also pitch in, of course. So you very rightly sp otted in the results that indeed, we have improved our overall gross margin. Our cost of goods sold has gone down. So while our volume grew 7%, 8% in the quarter, our cost of goods has o nly grown 2% to 3%. So that's the benefit that you are talking about. I thought it's good to clarify for the rest of the listeners also. Now you asked if this is sustainable. I think this is one of the very important focus items for us in the company. We want to make sure that we are ab le to improve our overall product cost ongoing structurally. Part of it will come through best rate negotiation. We just spoke about it in the previous question. Part of it really comes by o ptimizing our raw pack material sourcing, optimizing our formulation, optimizing the costs that we incur in our manufacturing locations. And as a result of all of this, in this quarter, m y cost per liter of lubricant has gone down by about 5%. And if I look at it on a 9-month basis, i t's actually gone down by, I think, 2% to 3%. So this is intentional. This is what we use as a mu scle to improve our overall profitability, and this effort should continue even in the future. Now part of it is really a company's effort, but t his part of the P&L is also exposed to the macro environment, and that's also important to be aware of. We spoke about base oil, which is a commodity, and hence, it's -- part of my COGS is de fined by that market. We buy in dollars. The price is maintained in dollars. And hence, we are exposed to the U.S. dollar-rupee exchange fluctuations also. So while we put an effort on making sure the cost goes down, we are exposed to this macro environment, and we try to find the balance always. You also asked a question on realization. Net real ization for us, it is evolving. It will evolve also. Premiumization, I think, is a strategy. We definitely want to do that in each of the states that we operate in. But also, we are very aware that we have expanded our portfolio and entered into the essentials segment, Castrol ESSENTIAL. And you might be familiar, if you're familiar with our portfolio, we have that in many spaces for our bikes, for our CVO part of the portfolio as wel l. That comes at a lower realization versus a comparable product. So we are actually ready for a realization drop, a mix drop in a way. And we do fund part of it with the savings formulation optimization so that at a gross margin level, each of these products give us a good realization. You also asked the ques tion on pricing. I think pricing for us is a strategic lever. We definitely -- every year or every once in a yea r, we sit down and we look at those pockets where there is an opportunity and we think we can o ffer the consumer a better value and price for it. And on the contrary, we also look if there is an opportunity and we need to consider pricing down, and we need to pass on either via promotion o r strategic price down. So it's a strategic discussion. We don't do that on a knee-jerk basis o r on a shock basis. But yes, we do consider that ongoing. Kedar?

Yes. So to be -- to talk about data center opportun ity, Mandar, this is my favourite part of the answer because there are no numbers to talk about o nly principles and concept. Data center opportunity is real. It's a global opportunity which runs into millions of liters of coolant, whether we do a liquid cooling directly to chip or liquid cooling through containers where the processors and CPUs are dipped into the coolant. Now I have been waiting for my first announcement to be made in India because these testing go on for a very long time. So we work with hypersc alers as well as data center operators, and they are running very long tests, not just with the coolant, but also with the technology to prove the heat management promise that the coolant does o ver ambient management, which happens through air conditioners. Now these tests would last 9 months to a year, and we have a sizable amount of liquid coolants now available in India, which we are ready to suppl y. And you'll be the first one because we'll not leave a chance to make a media blitz once we win our first customer on the coolant business because we believe it makes our entry into data cen ters and the future of digital technology makes our products and services relevant to a totally new sector. And I said last time that in coolant space, the ac cepted margin in Western world is about $1 per liter. So if we are able to get some of this business coming in, it will add a good amount of delta to the business, which will not replace anything else that's happening in automotive or industrial or automotive or Auto Care sectors that we are currently focusing on. So watch this space is what I will say. I'm waitin g like you are for our first set of customers to finish the trials and order the liquid.

Next question is from the line of Nitin Tiwari from Phillip Capital India.

Actually, my 2 questions are also related to, one, your raw material cost and other data center opportunity. So on the raw mat cost, did we factor in any discounts or rebates from the suppliers? And do we typically do that in the fourth quarter. Is there...

I'm sorry, Nitin, your voice is sounding muffled. Can you use your handset mode, please?

Speak slowly because the voice is muffled, it's difficult, just speak slowly and then pace slowly.

[inaudible 0:46:51]

No, you're sounding muffled again. No, we can't hear you at all now. Until then should we take the next question, sir, because we are unable to hear him?

Yes.

We'll take the next question from the line of Kirtan Mehta from Baroda BNP Paribas.

We spoke about sort of transitioning from new provi der to full service and maintenance providers, so adding beyond just products. So over the next 5 years' time, how do we want the mix to evolve? What could be the probable mix that we are looking at?

Yes. Kirtan, good question, but this is too early for us to start giving a guidance on mix because if you remember, we used to have just about 300, 40 0 CAS's. Now that number has moved to 750. And our recent tie-up with VinFast has taught us that we can make this network available as a source of reliable and accessible aftersales s upport for even EV customers and smaller manufacturers and OEMs. So we are looking at the network effect coming into play in the future. And it will take a lot of efforts and a lot of, I should say, resources from our side, whether it is in people, technology, network, guidance, services, spare parts, lubricants. And all of that put together will make the service and maintenance offe rings complete. And you will see this organization transform over the next 3 to 5 years. And every quarter, you will start seeing some small numbers coming in and over a period of time, will add to a sizable number. And just for sake of comparison I could offer, the se are not numbers, but an inspirational case. I was in the U.S. with the leadership team, and I saw how Valvoline Quick Lube change network of 2,000 outlets across U.S. is a very large busine ss that Valvoline did not sell along with its lubricant brand when they did the transaction. So -- and we believe that something -- a CAS netwo rk, which offers a reliable service could become a strategically very important lever of our future growth, but no numbers as yet for me to share.

Sure. And is this ambition primarily at the India e ntity level? Or does the global Castrol also have the similar ambitions?

I think what's relevant for CIL listed perspective is the ambition in India, which is being tested out, should see light of the day and get scaled up. And it will have to be supported globally with both ways of working, technology and processes, but that's not relevant for CIL investors or for this conversation.

We'll take our next question from the line of Parimal Mithani, an Individual Investor.

Sir, this is regarding your data cooling business. I would like to know, sir, how competitively are you going to be priced in terms of your competi tors in the similar space and who have their products out? And how do you see it -- what's the d ifferentiation between the Castrol coolant versus the existing companies like Motivair which h ave? If you can throw light on that much better, sir.

Yes. First is, as I explained just in the last ques tion to Mandar ji, that these are long gestation period sale, which happens not because you offer a price, but you offer a technology, a formulation and then the assurance of supply over a period of time, right? It's not just about a data center deciding, but als o the equipment that gets dipped into the liquid coolant or the processors which will get cooled with your coolant. So there's a lot more that goes behind the scene here in formulating the product and then delivering it to the promise. So it wouldn't matter whether we offer at X value per liter versus somebody else who could be offering at Y liter per value. What is important is that we get these contracts and we remain with those customers for a long time to come. And I gave you a benchmark number of gross margin, which also is yet to be realized and seen in Indian context. But that -- those were the 2 answers so that if so mebody is modeling to see what it could be, you have some numbers to work with because those are th e numbers that we are also working with for the time to come. But that's where this would be. Time will tell how sustainable this product advantage would be and how we'll continue to work w ith our customers closely to offer value in their systems and processes.

Again, a, I want to understand if the company plans to expand into the space of diesel exhaust fuel. I understand company is already doing certain numbers and whether they would be able to ramp up from here on. B, I understand the company i s already hedging about 80% of its forex exposure. But if the currency depreciates from here on, does the company have a plan further on to protect its margins? And ultimately, c, I understand the EBITDA margin guidance of 21% to 24%, but do you -- does the company see it breaking out of this 24% and moving it higher? I do understand lubricants is a commoditized business, but Castrol is doing it so well. Can it break it to the next level of EBITDA margin?

Okay. Dhaval, you are really pushing hard on this. And if I said DEF is not something that we want to expand only because you expect us to be at the higher end of that margin, that will be an appropriate answer because DEF is a commodity. And you will not take your vehicle to a Castrol store to choose Castrol DEF if I charge you INR2 liter more because I have to deliver in the guidance. So DEF is undifferentiated product. We are present there, but we wouldn't want to expand it aggressively. That's the answer for DEF. Forex exposure, I'll ask Mrinalini to let you have the answer. But realize the fact of our life is that RBI is sitting on a very large cash or forex reserve over INR650 billion, if I'm not mistaken. And RBI will do enough to keep it within a permissi ble limit. And if it keeps it within the permissible limit, I think we should be good with our assumptions for 2026. But I'll let Mrinalini give you specific answers. And if I were you, I would be really, really happy with Castrol as long as Castrol delivers the EBITDA in 21, 23, not even 24 and consistently delivers the volume growth of 7%, 8% and the sales growth of 6%, 7%, which means you're seeing an EPS growth of 6% to 7% on a very, very solid base instead of then asking saying, can you do more? Because in the comparable universe of a listed com pany, you can see where the EBITDA margins are. As a matter of fact, we are almost at a level where no lubricant company has been able to operate for such a long time. So going back to Mrinalini on forex.

So Dhaval, good question on the forex. When it comes to forex volatility, I think of it in 2 parts. What we at Castrol do is we ensure that the volatil ity doesn't give us any shocks in the P&L, which is why while in the July, August, September quarter, the rate went from, I think, $86 and it even touched $90 at a point in time, our P&L was protected because we had hedged for the quarter, and we didn't see any shocks and we didn't have to respond with any shocks. So we definitely focus on ensuring that the volati lity doesn't impact us. But on a longer-term period, will I increase my hedge cover to a longer period? I don't know. We keep looking at these efficiency models. We look at what all forex is to cover, how much pe riod to cover. And I think if at any point in time, it comes with -- it shows us that, that level of discipline will help us additionally, we may. But as of now, the focus is to ensure short-term shocks are avoided by our hedging strategy. And in the long term, we plan for it because it becomes a structural cost for me to incur.

Yes, thanks a lot on the FX. And yes, really happy to see that Castrol may not expand in DEF.

We'll take our next question from the line of Harsh, an Individual Investor.

So if I'm not wrong, we have some seasonality in ou r profits due to the bonus or the incentive that we get, right, once a year. So -- from our par ent essentially. So I wanted to know if/when Castrol is sold, will that jeopardize our incentive ? So essentially, does the incentive come from Castrol or does it come from BP directly?

Harsh, thanks for the question. And I must say it's good to interact with you when you have gone through the results in detail and you have spotted this correctly. You are right. On our employee costs, because of certain base effects, which happe ned in the same quarter, comparable quarter last year, it appears that the employee cost has gone down. Now while I think Kedar said, I think the result of the strategic review will be announced when it does and all the changes that, if any, have to h appen will be announced there. I think what is very clear is we in Castrol India wants to invest in the organization, especially as we prepare to deliver the onward upward and forward strategy. So we invest in 2 forms. One, we invest in making sure that there are people staffed to do the job and the people who are staffed already are moti vated and retained for the longer term. An average tenure in Castrol is 10-plus years, which means that we really invested in our employee cost. So there are no really knee-jerk shock reactions expected on how we manage our employee cost base, but you're right in spotting that there was some base impact.

No. So I'm talking about -- I think there was some discount or something like that, that we received -- that we receive 1 quarter every year…

I'll answer that. I think she was meaning to tell y ou that. So no, BP globally does not make any base oil and Castrol is the one across the world fo r our 2.2 billion, 2.3 billion liters of sales, we do buy base oil from multiple suppliers. And these global deals are with Castrol, and we get benefited because we also consume a hell of a lot of that material, and we get appropriately discount coming into our numbers because of what we buy as part of global Castrol. So none of these discounts that we see in the Q4 will get affected by any strategic sales. You can be rest assured. Thank you very much.

Ladies and gentlemen, we are in time, and hence, we are closing this call. On behalf of Castrol India Limited, we thank you all for joining this ca ll. You may now disconnect your lines. We wish you a good day ahead.