Castrol India Limited (500870) Earnings Call Transcript & Summary

[Audio Gap] Deepesh Baxi, Chief Financial Officer and Wholetime Director, Castrol India. I now hand the conference over to Mr. Sangwan. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. First of all, a big thank you for taking the time and joining the first analyst call for this year as we announce our fourth quarter and full year 2020 results. Let me also say that there seems to be an issue with my phone line, which keeps dropping at times. In case that was to happen, the moderator would dial me back in. But in case it doesn't work, I'll request Deepesh to take over, Deepesh, who's our CFO. We all know that 2020 has been an unprecedented year marked by the pandemic, resulting -- a result of which, the overall external environment has been very challenging. And in this tough period, I'm pleased to say that we've been able to consistently focus and deliver to our in-year priorities of protecting the safety and well-being of our people with most of our teams working from home except for our plant teams, who continue to keep all our fronts operational to meet customer demand, maintaining the strictest safety and health norms as specified by the government. The second priority was supporting several communities that we operate in, and this included hospitals, mechanics and truckers, and supporting them throughout the pandemic period. And the third priority for us was protecting the financial health of business through a resilient performance. And I think keeping that context in mind, I'm happy to know that our full year performance of robust financial delivery, setting the business for growth. And if you look at 2020, it was a story of 2 halves, where we saw good momentum in the second half with revival of demand. In second half 2020, our revenue improved by 54% at INR 1,818 crores. And profit from operations was 122% higher at INR 501 crores versus first half of 2020. If you look at the fourth quarter revenue, this also increased by 6% to INR 935 crores versus third quarter of 2020, which came in at about INR 883 crores. And this kind of signified continued momentum and recovery in the business. We continue to invest in digital technology and efficiency programs, leading to robust working capital management and judicious cost management, thus generating a very healthy cash flow from operations of INR 893 crores for our full year 2020, which is 1.5x of PAT. We also took actions to set the business for growth, which included working with distributors to reduce their inventory to improve their working capital. We corrected some prices for our CVO portfolio, which resulted in double-digit growth in the quarter on that part of the portfolio, and supporting our brands with substantially higher marketing and advertising spend. We also launched several brands in the year, including Castrol Power1 Ultimate, Castrol Activ CRUISE and Castrol GTX SUV, again, leveraging the technological advantage that our products have. We also have increased our visibility and reach this year in a completely new channel, which is the Jio-bp supplier agreement that we have on the fuel core channel. And we are now present in over 1,350 Jio-bp retail sites across the country. Through our strong cash delivery in 2020, we have been able to deliver value to our shareholders. We have declared a final dividend of INR 3 per share and have earlier declared an interim dividend of INR 2.50 during the year. And this has helped us retain the same level of dividend as last year, which is at INR 5.50 per share, given the strength of our balance sheet. It is also my pleasure to introduce our new CFO and Wholetime Director, Mr. Deepesh Baxi, who will be joining me on these calls going forward. Deepesh is a chartered accountant with over 2 decades of industry and consulting experience, having spent the last 18 years in various roles within BP. He's also an alumnus of Indian Institute of Management, Ahmedabad, and a certified internal auditor from Institute of Internal Auditors, USA. He has worked in several international markets in leadership roles spanning across finance, strategy, M&A, planning, audit, risk and compliance as well as business transformation. And with that, I hand over to Deepesh for some opening comments before we get into Q&As. Thank you.

Thanks, Sandeep, for that warm welcome and introduction. Hello, everyone. Good afternoon, and I'm delighted to be with you today, and I look forward to our interactions going forward. I would say I'm honored and energized at the same time to be in this particular role. The fundamentals and the balance sheet of the business are very strong. And Castrol, as you know, enjoys a position of leading and trusted brand in the market. We will continue to focus and build Castrol India as a growth business because we are a brand that has been known for its technology and we are ready for the future as well. We have EV fluids, greases, coolants, products that will help the new age vehicles. And in terms of our strategic intent, we want to move beyond lubricants and be a leading service and maintenance brand. But at the same time, we will continue to invest heavily behind our brands, our distributor channels, manufacturing plants, and of course, keeping our customers at the heart of everything we do to set ourselves for growth. Thank you. Back to you, Sandeep, for the next part of the session.

Thanks, Deepesh. Can we please get into Q&As?

[Operator Instructions] The first question is from the line of Viraj Kacharia from Securities Investment.

Congratulations for good numbers in such a challenging environment. I have 3 broader questions. First is if I -- on the semi and the full synthetic lubes, so what is our share of -- revenue share from these products, semi and full synthetic lubes? And how does it compare with the industry? So how has that evolved over the last 5 to 7 years? And broadly, what factors would typically drive the market share towards this? So is it largely income growth or key criteria or BS-VI in and of itself should drive acceleration going forward? So that is one. Second is on the EV part. Globally, there are a few players, including us, who have already launched EV fluids, solutions for the EV vehicles. So compared to an ICE, where are we -- where -- what value chain we are looking to cater to? And is technology a significant barrier in providing EV fluids? And also, any aspect on content per vehicle with regard to the current offerings in ICE? How does that compare? And last is on the contingent liability of around INR 3,400 crores. So that keeps on increasing every year. So what is -- any update you can provide?

Yes. So thanks, Viraj. Let me start with the first question -- sorry, your last question first, and then I'll hand over for some questions to Deepesh. I think on the EV fluids, let me kind of cover that first. First, exactly what I would say is we already have a portfolio of EV products, which ranges from transmission fluids to coolants to greases that we are already supplying to various OEMs globally. I think we already have products which are approved by the OEMs like JLR, VW, BMW, which are already in play in Europe. I think in India, we are already supplying products to MG Motors for the EV vehicles and Tata Motors. So I think as far as the future is concerned, we are very well poised to leverage our technology. And I think we are one of the leading players in that sector. So that's one. The second thing I would say is -- I think you asked what drives the demand for synthetics and other products. Is it income levels? Or is it something else? I think ours is a derived demand category. So we're dependent on the kind of vehicles that come into the market. So as the engine technology improves, for example, last year, we saw the introduction of BS-VI, okay, which use advanced lubricants. And I think as in future, we see more newer technologies coming in, the contribution of synthetic and those lubricants will increase. I think currently, if you look at -- Castrol has a leading share position in the market, okay, with the leading players. Specifically, if you look at the retail channel, which is our kind of primary play, and personal mobility sector, which is our primary play, at an overall level, we are a leading player in the market. And even on synthetics, we are a leading player. I mean the contribution of synthetic fluids to our volumes are in the range of high single digits to low double digits. I think that's what I would say. It's in the range of about 10%, 11%. That's the contribution of synthetic fluids, and it's going to grow in the future. On the contingent -- on the liability question, let me hand over to Deepesh. Deepesh, if you'd like to take that question, please.

Yes, sure, Sandeep. Yes. So I think the INR 3,400 crores that you are referring to, firstly, I just want to clarify that it is not a contingent liability. This is something which the auditors has put in the notes to accounts because their assessment and our assessment is that this liability [ 235 ] will be removed. As regards to the INR 3,400 breakup, I mean, this is really from 2007 onwards till 2016. And the context here really is that when the sales were made to a different state, the Maharashtra state said that we should be paying VAT in Maharashtra, whereas we had already paid the tax in the receiving state when they made the sale. So we have appealed about this, and until 2015, we have received favorable orders from the tribunal. So we are good with that. The -- only about INR 500 crores is the one where the order is pending. But overall, I just wanted to assure you that we look at all of these very, very closely through our tax department, and the probability of anything fructifying on this is remote.

Just on the EV part, just one follow-up. If you can share, is technology a barrier in EV fluids? Because right now, what we are seeing is largely only the MNC players have kind of introduced [indiscernible]. And added to that, if you can share the models which we are applying to Tata or MG. What is the content per vehicle? And how does it differ to our offerings in internal combustion engines?

Sorry, I don't really understand the second part of your question, but...

The second part is, typically, in an internal combustion engine, say, in a passenger vehicle, we would have an engine fill, which will typically last, say, 5,000 kilometer or you will have a certain -- in EV, what is that content? And how does it play out in [ your agreement about that ]?

Okay. So let me kind of -- so we are supplying to Tata and MG on the electric vehicle models. We're also supplying to their kind of internal combustion engines. Specific models, it's very difficult for me to kind of point out which models. I think -- and technology, I think the multinationals are, I would say, possibly in a stronger position because we had global relationships with the leading OEMs, okay? And that's where -- I think as OEMs look at getting into electric vehicles, shifting to electric vehicles, that's where those relationships start counting because we work in the earlier stages of development with various OEMs. I think that's where I would say. As far as I think the quantum of fluid and drain cycles, EV is still an evolving technology. I think there are various kind of EVs. I wouldn't want to get into a technology session. But EVs use different kind of fluids. They don't use lubricants as they do in internal combustion engines. And I think the drain cycles are very different. Some of those fluids could be filled for life. Some of the fluids like battery, coolants, et cetera, may be similar to lubricants. But as the technology evolves, we're keeping an eye on that, and we want to be a key leading player in that area.

[Operator Instructions] We take the next question from the line of Sabri Hazarika from Emkay Global.

I've got -- the first question is a book-keeping question. So what was your volume for Q4 CY '20? And what is the split between automotive and non-automotive on a percentage basis?

So I think in quarter 4, our volumes were about, if I'm not mistaken -- let me just kind of refer to my numbers. In quarter 4, our volumes were about 6% down versus 2019. But that also had a distributor inventory adjustment because we wanted to improve the working capital of our distributors. And I think our volumes were in the range of about 52 million liters in quarter 4. Sorry, the second question you had was the split of automotive, yes? I think almost about 80%, 80% plus of our volumes come from automotive.

Excuse me, can you please repeat? I just missed it.

Yes. So what I'm saying is almost about 80% plus of our volumes are automotive volumes.

80% plus. Okay. And my second question is relating to your profitability outlook and dividend payout. So we have seen that in FY -- in CY '20, you had a 30% growth in profitability, but still you maintained the dividends at around INR 5.50. So that's like close to 93% payout. Last year, you had a profit of around close to INR 830 crores. So are you confident of like going back to last year in CY '21? And how do you view it? I mean your dividend payout seems quite optimistic as far as the near-term outlook is concerned.

So Deepesh, can I request you to take that question, please?

Yes, sure. So yes, I mean, you're right. The dividend payout ratio is about more than 90% this time, and that's mainly because the PAT is lower. As Sandeep explained in his covering address that second half, we have seen a momentum in the business. And there have been reasons why this momentum has come through, right? So there is a revival of demand as well. I mean in terms of our dividend policy, our intent is to, as far as possible, try and be consistent to what we declare as a dividend. And that's what we've really -- yes, profit this year has been lower. But as you can see that our cash balance is pretty strong. And we think that despite declaring this dividend, next year, we'll be able to maintain that cash balance.

Okay. So I saw the interview of Sandeep on CNBC. So you -- I mean the basic takeaway is that you think that CY '21 will be more similar to CY '19 in terms of volume, margins and profitability. Is that right?

I think what I would say is we're seeing good momentum in the business. What it will be, only time will tell, okay? I cannot comment on that. But the intent is to be a growth business. And I think we have to see that 2020 was a very unique situation, okay, which we've navigated very successfully. And we're quite hopeful of 2021 will be a good year. So...

The next question is from the line of Manikantha Garre from Axis Capital.

Can you please provide a further split of that 80% automotive volumes between CVs, personal mobility?

Yes. So -- yes. So I think our personal mobility tends to be around like 45%, 50% of the portfolio. And then you have balances as commercial vehicles and other lubricants.

Sure, sir. And the second question is more of a question -- near-term question. It's been more than a year since you have taken over the mantle and you have taken some price corrections, price actions in certain products and introduced new products. And in some areas, you have introduced new products at low end of the market. So how -- after all these actions, how have your market shares moved in personal mobility, CVs and industrial segments? If you can throw some light there.

So I think one thing I would like to say is we are a premium branded lubricants player, and that's the position we want to kind of maintain, okay? When we say we kind of correct -- taken some corrective actions, basically, we've adjusted premiums, our premiums in certain categories to the average prices that we see in the market. So it's not to say that we've kind of dropped the market. We're still premium. We maintain our premium. I think the only thing that we've adjusted is where we thought the premiums were not giving us the value that we wanted, that's where we've taken the adjustments. And I think as far as market share is concerned, we are seeing good traction on the business, good momentum. And in some of the areas, the market shares have started moving up.

Sure. Sir, if I can squeeze in one more question here. How do you look at this industrial...

May I request you to please come back in the queue because I want to give -- we want to give opportunity to all the others as well. So...

The next question is from Girish Shetty from Banyan Tree Advisors.

Sir, I just wanted to ask on your working capital. So it has gone from 30 days to around 0 days now. So what have you done for that? And is it sustainable? And second is on your advertisement expenses, which has gone up this quarter. So is that a conscious strategy? And will that be long term?

So Girish, let Deepesh answer the working capital question. I'll talk of the advertising expenditure. I think the advertising expenditure in quarter 4 was very intentional. First of all, I think we wanted to further build momentum for our brands. As I said, we are a premium brand and lubricants business, and our portfolio is also driven by marketing investments. I think in the first half, we couldn't invest given the pandemic situation. So we had cut down our marketing expenditures, especially when the lockdown was announced. So Q2, which is Castrol calendar year Q2, we did not spend a lot of money, okay? But to get the momentum going, we overspent in quarter 4. And I think marketing investments are a key to drive business growth for us. So that's likely to continue in the coming year. But on a total year basis, if you look at marketing expenses, that will be more or less proportional to what we've been spending over the years, maybe a bit plus/minus here and there. On the working capital, let me pass it on to Deepesh. Deepesh, do you want to answer the working capital question?

Thanks, Sandeep. Yes. So I think the working capital management that we do, the organization, is quite robust. We look at it very actively. And as you can see, almost [ 153% ] of the PAT is being converted into the cash. Now there are 3 things that go into the working capital: debtors, creditors and inventories. And this reduction that you are seeing is definitely coming from debtors. And the reason why it's coming from debtors is we've better managed the SKU, the conscious effort for the -- of the management for getting the collections, and the day sales outstanding have also gone down. On the inventory side, I mean, there has been some increase mainly because of the consignment that we got last year at the end to manage the -- to ensure that we optimize the cost of the base oil. But overall, it's been a very robust effort right across the functions, whether it's sales, marketing, supply chain, to work towards this working capital reduction.

Okay. Okay. Sir, one last question. Just on the [ CV ] price cut that you've taken you mentioned in the press release, so can we expect this same strategy in the future, as in for the long term as well?

I think we keep looking at our pricing in the market, and we follow a strategic pricing model, okay, where we keep evaluating our premiums versus our key competition. And we'll continue taking actions as required, but we do not want to give up the position of a premium branded lubricant supplier. So that's in line with our strategy.

The next question is from the line of Abhijeet Bora from Sharekhan.

Can you give the volume numbers for Q4 CY '19?

So Q4 CY '19, I think the volume was around 54 million liters.

Okay. So that is 3% better, I think. As you mentioned [indiscernible]...

Mr. Bora, I'm sorry to interrupt, but we can't hear you very clearly. I request you come closer to the mic.

Any better now? Is it better now?

Yes. So I think responding to your question, I think our volumes in quarter 4 were down 4%. That's what we said, okay? 3 or 4 is a decimal here and there. I think it's a rounding off issue.

Okay. Okay. And can you give the guidance for next year?

Sorry, I think as a company, we don't give any future guidance.

The next question is from the line of Yogesh Patil from Reliance Securities.

Sir, in earlier conference call, you had mentioned that Jio-bp retail sale outlets to add growth in the sales volume. Now already 6 months are over for the JV, and can you throw some light how that JV has helped you to improve sales volume growth? That is my first question. And going forward, next 1-year to 2-year kind of horizon, how much volume growth we are expecting from that JV side? So that's it from my side.

Yes. Thanks. Let me take that question. So as I said in my opening note, we've been kind of able to get very good distribution in Jio-bp outlets. Castrol lubricants are now available across 1,350 Jio-bp retail sites. I think we've seen month-on-month progress. I think to the specific numbers, it's very difficult for me to kind of share very specific numbers on volumes, which are coming on account of Jio-bp. But we're seeing good traction in the business. And I think there are 2 components of the volume that we're getting. We're getting lubricants plus also DEF, which is diesel exhaust fluid, which we also supply to Jio-bp outlets. It's a combination of engine oils plus DEF. I think looking at the future, today, we have 1,350 sites. And this has been shared in the public domain. The objective or the intent is to expand that network to 5,000 sites -- close to 5,000 sites over the next 5 years. I think as they start -- sales start -- new sales start coming online, hopefully, from middle of this year onwards, adding to the 1,350 sites that we already present in, it will also help us increase volume further. And this is a channel where Castrol was not available earlier. So it's a new channel for us, new channel in terms of petrol [ 4 codes ] -- fuel [ 4 codes ].

The next question is from the line of Shradha Sheth from Edelweiss.

Sir, I just wanted to understand, as we are seeing a big jump in crude oil across commodities, similarly has been the case for crude oil as well. So the pricing action that we took was counterintuitive. So just wanted to understand, how are we seeing the market ahead with such inflation? Do we expect any price increases?

Yes. So thank you, Shradha. Have I got the name correct? Yes.

Yes.

Yes. Thank you. Thanks, Shradha. I think you're absolutely right. I think we're seeing cost pressures because of 2 things. One is, as you know, crude prices are going up. And base oil prices have gone up over the last 2 or 3 months. The second is I think there's a shortage of base oil in the market, okay? And it's -- I think Castrol -- first of all, I think to answer your question whether the pricing action was counterintuitive, I wouldn't agree with that. I think the pricing action that we took on commercial vehicle portfolio is just to kind of make sure that the premiums are in line with that can drive share growth. So it's not kind of a price reduction for any other reason. I think we're still seeing them in the market, okay? We're driving volume and share growth. We see good momentum coming out of that. Second is, I think, on the higher input costs, we have already intervened. We announced a price increase in January, and it was not only us. I think the whole competition, most of the players in December then had to announce price increases because of the raw material, input costs going up. And we'll watch the situation, and we'll see how the situation develops. But there is cost pressure, which we'll have to kind of be very conscious of and cognizant of.

Sir, how much is the price increase we have taken?

So I think in January, we took about -- on average, about a 4%, kind of. It's deferred by segments and brands and products, but on average, I think it was to the tune of about 4%.

Fair enough. And sir, what is the price premium in the CV portfolio versus the market now?

Shradha, I won't want to kind of talk about our premiums because that's as a part of our strategy, and I wouldn't like to share that information. So...

Sure. And lastly, this year, CY '20, we saw like a 16% kind of volume decline because of the pandemic. So how are we seeing the market ahead? Was there some pent-up which has gone away? Or what is the kind of sustainable growth we are seeing in -- for the market overall in CY '21?

Okay. I think the market is coming back pretty well. We've seen demand pick up, actually building up between quarter 3 of last year into quarter 4. As I said, our quarter 4 revenues were about 6% higher than quarter 3. Quarter 3 was much higher than quarter 2, and we see good momentum coming through in January also. And I think as new vehicle sales pick up and the economy recovers, if you see more economic activity because our category is more of a derived category based on miles driven and how many vehicles are on road, so we're quite hopeful of a good momentum and recovery in 2021.

The next question is from the line of Mohammed Ahmad from FGP.

I hope you can hear me clearly. So unfortunately, I did drop out for 5 minutes, I had a disconnect. So I hope this isn't a repeat. But my understanding is your volumes were down 4% in Q4, which puts them at around 52 million versus 54 million in the same quarter last year. Could you give us some color on what was the relative mix impact within this number? Like -- let's say how did bazaar volumes do relative to this 4% number? Were they worse or better? And within bazaar, what did like commercial vehicles do versus personal mobility? And then what might have these different mix impacts have had -- or what impact they might have had on your gross profit per liter and your realizations per liter?

Yes. Thanks, Mohammed. What I would say is I think the 4% decline, you have to look at it in light of the distributor inventory correction that we undertook, okay, where we almost helped our distributors reduce their inventory by about a week or so. And that's the primary impact that is coming to play in the volumes. Otherwise, our volumes would have been potentially a 1% growth, 2% growth kind of area. And I think on a mix, since I said, retail is about 80% of our business, so primarily all the -- most of the impacts are from retail. Our industrial business grew. In fact, our industrial volumes grew in quarter 4. So I think that's the mix.

Okay. So any comment on what would the impact on realization and gross profit would have been? Because your COGS were -- on a per liter basis were largely flat quarter-over-quarter here, not year-over-year. And then at the same time, you saw realizations down a little. So I guess that's simply because, I guess, you're seeing mix shift towards industrial, which is lower realization business.

Yes, I think that's right assumption. Some impact of that inventory reduction would have played out in mix. And with industrial volumes growing a bit, growing in quarter 4 versus retail volumes, which are down, so that's the mix impact you see. But that will hopefully come back as we kind of normalize our business again starting this year.

Okay. So in January, you're seeing that business sort of do okay, the retail business?

Yes. I think as I said earlier, we've seen good momentum in the business. And hopefully, unless and until we see a second or a third wave of COVID, which looking at the Indian scenario doesn't look likely, but never say never, things seem to be under control. So hopefully, the momentum should continue.

Next question is from Viraj Kacharia from Securities Investment.

I just had one follow-up on the CapEx part. If you can just provide the outlook, how much we are looking to spend this year and next year.

So Deepesh, can you please take that?

Yes. Thanks, Sandeep. Sorry, just to repeat your question, your question is CapEx for this year and next year, right?

No. You're looking to undertake a significant expansion, [ et cetera ]. So any...

Yes, sure. So typically in the last couple of years, I mean, our CapEx has been in the range of less than INR 100 crores. And what we do is we continue to invest in various aspects of signages and other assets for investments of growth. So that's the range that we would continue to spend. Of course, there is an element of spend of CapEx in our supply chain and in our plants, whether it is related to expansion of projects like Silvassa or in other plants. So that is on top of this INR 100 crores.

Okay. Any update on the existing business, the tie-up with 3M, any update you can provide?

Yes. So I think on 3M, because of the pandemic situation, we had to stop the pilot, and we should be reinstating that in the next couple of months because we also wanted to -- based on learnings from the first phase of the pilot, we wanted to make some adjustments on our portfolio and pricing, et cetera. So it's still in a pilot stage, and we'll reinitiate that in the next couple of months.

The next question is from the line of Kunal Thanvi from Banyan Tree Advisors.

Congratulations on a good set of numbers. So my -- I just had one question. All of my questions are answered. I had a question on the broad strategy. So if you look at Castrol in last 1 year, we have seen a lot of interesting things happening within the company in terms of rationalizing the pricing in the segments where the premium was going up and also launch of new products across the category and then spending a lot of -- in the right areas like advertisement. And how should one look at Castrol as a company in terms of growth from next 3- to 5-year perspective? Because the way we have been positioning all this time was lower revenue or volume growth but higher profitability -- higher profit growth. So now is there any change in stance due to the management change? Or how does the management looks at the growth from 3- to 5-year perspective? That is question number one. Second, while you already touched base upon the working capital management, really appreciate the way you reduced the working capital this time around. How sustainable is that from a longer-term perspective? What is the working capital base that the company has in its mind, which they are happy with?

So thanks for your question. I think both are very good questions. So responding to the growth strategy over the next 3 or 5 years, I think there's no fundamental change in our strategy. I think what we've always said is we want to be the leading player, and we want to kind of drive growth through personal mobility as a focus area, and that will continue. I think the second is we've been very conscious of our margins, okay, improved margins. The top line growth has been a bit kind of subdued because the revenues over the last -- if I look at last 5 years or so, have been a bit flattish. So -- but that doesn't say that we'll give our focus away from margin. I think margin is important. Profitability is important. We'll continue focusing on that. So the only thing that we are doing is can we drive the top line growth a bit harder. I think that's the only adjustment we are making. It's not a shift. I think as I said, we continue staying true to our strategy, at the same time, showing a bit more intent to drive the top line growth. So that's what I would say. On working capital, how much is sustainable, I can answer that, but let me hand over to a person who is more qualified to answer that. Deepesh, over to you.

Yes. Thanks, Sandeep. So I think let me just explain you how we sort of target working capital reduction, right? I mean what -- days is one aspect of it, but what we try to do is we try to assess whether our operative working capital is sustaining so that we don't need to dip into our current assets to manage operations, right? And the other target that we have is to have a cash dividend ratio which is -- which is profit to cash conversion at least in the range of 80% to 90%, right? So those are the 2 broad principles that we work with. And then within debtors, creditors and inventory, that is a range of days that we operate within and take tactical actions to manage it. But strategically, we want to make sure that we deliver the working capital within this range.

Sure. That is helpful. And just if I can have a follow-up on the growth part. So when we say we -- there's a slight shift in terms of driving the growth harder than what we were saying earlier, so this would again be largely focused on the personal mobility and synthetic side. We are broad-based in that sense if the profitability is maintained on overall basis?

So I think you're right. We'll continue focusing on personal mobility. And as the portfolio upgrades to more synthetics in the future, that also gives an opportunity for us to kind of maintain and improve our margins. So that will stay.

We take the last question from the line of Srinivas from Mirabilis Investment.

A couple of questions. Firstly, Sandeep, if you could expand on like the game plan for achieving a higher growth than earlier with respect to, say, products or, say, pricing strategies or distribution, et cetera, across the various kind of key segments that you have, both in the consumer and industrial as well as the B2B kind of tie-ups. That is question one. And secondly, wanted some idea of how much the Jio-bp channel has kind of contributed in terms of volumes. Some idea would help us understand how that is going.

So I think talking of the growth question, I think as we look to the future for growth, so there are opportunities like the Jio-bp, which is giving us incremental business, okay? But as I said, there's no shift from our strategy. We'll continue focusing on personal mobility. We'll continue focusing on fundamentals of the business, and fundamentals of our business is a very strong distribution, a very strong visibility in the market and our brand supported with marketing investments. So we've done that earlier. We'll keep doing that in the future. I think where we thought our premiums were a bit on the high side, which restricted growth, those are the things that we've adjusted on our portfolio. We'll continue with new product launches, especially in the newer technology areas or upgrade in the market. We just launched Power1 Ultimate in quarter 4 last year. So Activ is our largest 2-wheeler brand we have in the portfolio. And Power1 is a premium offering. And I think we've just launched a range of products under Power1 Ultimate, which in the first few months of launch has given us good traction. So I think fundamentally, nothing has changed. It's just a bit -- as I said, a few adjustments here and there to get better top line growth. With respect to Jio-bp question, I think I already answered that in response to a previous question. I think I cannot share very specific numbers on that, but we're seeing good traction with presence in over 1,350 outlets already achieved. And as that channel expands, we'll continue kind of leveraging that for getting higher volume in that channel.

Sure. And just on the growth part, if you can also elaborate, do you see any kind of opportunities on the distribution side in the bazaar segment itself which you think can be better tapped versus how we've been doing in the past? Or do you think that is something which is more of an ongoing kind of thing? If you can comment if you see any specific opportunity to extract growth.

So I think distribution expansion is an ongoing priority for our organization. We are the largest distributed brand amongst lubricants, whichever portfolio you can cover, you pick up 2-wheelers or commercial vehicles or passenger cars. So we are large distributed brand. We'll keep expanding that distribution. And I think as we also -- as we introduce new premium products, we'll continue focusing on distribution expansion for that premium portfolio also. So that's an ongoing thing that we do anyway.

Thank you very much. We'll take that as the last question. I would now like to hand the conference back to Mr. Sandeep Sangwan for closing comments.

Yes. Thank you, Raymond. And a big thank you to all the participants, and thanks for your great questions, okay, which provide you insights on our business. And I think as I said in the beginning, for 2022, we had 3 key priorities: ensuring the safety and well-being of our people; supporting the communities that we operate in, which included hospitals, mechanics, truck drivers and communities around the 3 plants that we have in India; and the last being to maintain financial health of our business. And I think on all 3 counts, the team has really worked hard and delivered quite a good performance. We've also -- we also value our shareholders. And I think I'm very happy to note that given the strength of our balance sheet and cash position, we've been able to maintain our dividend at same year as -- at the same level as 2019. And we're looking forward as the demand recovers, as the economy recovers and gets back to growth, we're looking at -- we are very hopeful for a good 2021. And with that, I just wish that all of you stay safe and all your families stay safe and take care of yourself. We're not through the COVID situation as yet. Until the time the vaccination program gains momentum and we are able to -- the government is able to vaccinate a large part of the population, please do continue taking precautions. And wish you all the best. Thank you.

Thank you very much. On behalf of Castrol India Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.