castrol india close to strong resistance

### **Castrol India Ltd. (CASTROLIND) Stock Analysis**

---

#### **Fundamental Analysis:**

- **Company Overview:**
Castrol India is a leading manufacturer and marketer of automotive and industrial lubricants in India. The company operates under the global brand, Castrol, which is part of BP. Castrol India caters to both the automotive and industrial sectors with a wide range of products like engine oils, gear oils, greases, and other specialty lubricants.

- **Revenue & Profit Growth:**
Castrol India has shown a steady performance over the years. For the quarter ending in September 2024, the company reported a 6.7% increase in profit, reaching ₹2.07 billion (around $24.6 million), driven by sustained demand for its automotive products. The revenue for the same period grew by approximately 9% to ₹12.88 billion.

- **Valuation (as of Feb 2025):**
- **P/E Ratio:** 24.5 (industry average: 22-25)
- **Price-to-Book Ratio:** 7.2
- **Dividend Yield:** 4.2% (The company has a stable dividend payout record, appealing to long-term investors seeking regular income.)

- **Key Ratios:**
- **Return on Equity (ROE):** 46.5% (indicating efficient utilization of equity capital)
- **Return on Assets (ROA):** 32.1%
- **Debt-to-Equity Ratio:** 0.15 (indicating a low debt burden)

- **Outlook:**
Castrol India's consistent profitability and strong brand recognition in the lubricant sector make it a reliable stock, particularly for dividend-seeking investors. However, the market is sensitive to fluctuations in crude oil prices, as the cost of raw materials can impact margins. Additionally, competition from local and global players could affect growth.

---

#### **Technical Analysis:**

- **Current Price:** ₹153.20 (as of February 2025)

- **Chart Overview:**
Castrol India has experienced a steady uptrend since 2022, with intermittent corrections. The stock is now consolidating within a range between ₹145 to ₹160. This level seems to be an important support and resistance zone.

- **Support and Resistance Levels:**
- **Immediate Support:** ₹145
- **Next Major Support:** ₹140 (a critical level in the long term)
- **Immediate Resistance:** ₹160
- **Next Major Resistance:** ₹165 (a breakout above ₹165 could suggest further bullish movement)

- **Moving Averages:**
- **50-Day Moving Average (50-DMA):** ₹152 (indicating short-term neutral to bullish sentiment)
- **200-Day Moving Average (200-DMA):** ₹140 (providing a strong long-term support)

- **Relative Strength Index (RSI):**
- RSI currently stands at 62, which is in the neutral zone. This suggests the stock is not overbought or oversold.

- **MACD:**
- The MACD (Moving Average Convergence Divergence) shows a bullish crossover, suggesting upward momentum, though the stock may face some resistance near ₹160.

---

#### **Key Metrics:**
- **Market Capitalization:** ₹8,000 crore (approx.)
- **52-Week High:** ₹163
- **52-Week Low:** ₹138

---

#### **Risk Considerations:**
- **Crude Oil Price Fluctuations:** Castrol’s profitability is impacted by the cost of raw materials like crude oil. A surge in crude prices can increase production costs.
- **Competition:** Increasing competition from both domestic and international players in the lubricant industry could erode market share and pricing power.
- **Regulatory Risks:** Changes in regulatory policies, such as environmental regulations on automotive emissions and fuel efficiency, could affect the demand for certain lubricants.

---

### **Conclusion:**
Castrol India Ltd. is a fundamentally strong company with solid revenue and profit growth. The stock offers a stable dividend yield and has shown resilience in terms of financial performance. Technically, the stock is in a consolidation phase with important support at ₹145 and resistance near ₹160. Investors may consider buying on dips around ₹145-₹150, with a target of ₹165 in the short term. However, it’s important to watch for any market-wide risks, particularly fluctuations in crude oil prices.

---

**Disclaimer:** This analysis is based on publicly available information, and I am not a SEBI-registered advisor. Please conduct your own research and consult a certified financial advisor before making any investment decisions. This is for informational purposes only and should not be considered as financial advice.