As Mobility Evolves, Castrol India Sharpens Focus on Core, Industrial and EV Readiness

At Castrol India, the task at hand is less about pivoting to a new model and more about steadily recalibrating an established one. The company continues to lean on its core automotive lubricants business, which remains a strong driver of margins and cash flows, even as it expands its play in industrial lubricants, rural markets and emerging mobility segments. With India’s manufacturing push gathering pace and the transition to electric vehicles expected to unfold over time, the emphasis is on balancing near-term performance with long-term positioning.

In a conversation with FE CFO, Mrinalini Srinivasan, CFO, Castrol India, outlined how the company is approaching capital allocation across businesses with different margin profiles, sustaining profitability while stepping up investments in distribution, brand and innovation, and building a portfolio that can stay relevant through shifts in technology, regulation and demand. (Edited Excerpts)

1. Castrol operates across B2B industrial clients and retail consumers. How has this dual exposure shaped capital allocation and growth priorities?

For us, Castrol’s dual presence across automotive (retail) and B2B industrial is a strength. Automotive lubricant is our core business. It is where we have scale, strong brand equity, higher margins and healthy returns. Hence, we stay disciplined in how we invest and keep strengthening that business.

At the same time, we are stepping up our focus on industrial. The channel presents a significant opportunity for growth, especially with the push towards manufacturing through government initiatives like Viksit Bharat and India’s ambition to become a global manufacturing hub.

While industrial margins are structurally different from automotive, the growth potential is much larger and more long-term in nature. Our capital allocation reflects that balance. We continue to invest in and strengthen our automotive portfolio, which is our present, while steadily building our industrial business as a key driver of future growth.

Industrial has always been an area with strong potential for us, especially with the renewed focus on manufacturing and infrastructure. We have a long legacy in this space and a portfolio that addresses very specific, often niche requirements of industrial customers. The past eight quarters are a proof of that, and it signals us to step up our efforts further, particularly around localizing globally acclaimed products for Indian operating conditions.

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2. In a legacy brand undergoing transition, what does value creation mean today, especially with shifts like EV adoption?

Transformation is not an exception anymore; it is happening across industries. On one hand consumers and customers expect more efficiency and more reliability, and on the other hand regulatory requirements keep evolving.

A good example is the shift towards EVs. While we live this transformation in two-wheelers today, the complete transition will play out over a long period, with ICE and hybrids continuing to be absolutely relevant.

For us, value creation sits in how well we navigate this shift. We are doing this by strengthening our current portfolio while investing in solutions that support the future.

That is where our strategy of Onward, Upward, Forward comes in. Onward is about staying focused on our core and continuing to strengthen our mobility portfolio. Upward is about scaling our industrial offerings and getting into newer sectors. And Forward is about building a future-ready portfolio and exploring new areas of growth.

The shift towards EVs is inevitable, but it is not going to happen overnight. We see this transition playing out over the next couple of decades, with ICE vehicles continuing to stay relevant through 2040 and beyond, and hybrids acting as a bridge.

Our range of Castrol ON fluids, compatible with EVs, is helping us prepare. At the same time, we are working with global OEMs entering India. Our MoU with VinFast is one example, where we are enabling service readiness through Castrol Auto Service workshops with dedicated EV infrastructure.

We are also preparing for cleaner fuels. With the adoption of E20, all our products are compliant, and we are working closely with OEMs for higher blends.

3. How do you balance margin discipline with investments in distribution, brand and innovation, while evaluating returns in price-sensitive segments?

This is a classic CFO dilemma: how do you keep investing for the future while also delivering steady profitability for shareholders.

In our case, the starting point is that the business has been growing well. We have seen strong double-digit growth over the last eight quarters, and that enables us to reinvest into the business while consistently delivering margins. It is not growth at any cost. It is about maintaining a healthy balance.

We invest across innovation, distribution and brand. Innovation keeps the portfolio relevant while improving efficiencies through localization. Distribution expansion continues, with a sharper push into rural markets. Brand investment ensures customers understand the value of the product.

We are clear about where we want to grow, whether it is industrial, rural or adjacencies, and investments follow that direction. From a margin perspective, we operate in a 21-24% EBITDA range, which gives us enough room to keep investing while maintaining discipline.

On rural and smaller SKUs, our experience has been different from common perception. The idea that rural consumers are not willing to pay is a myth. In our category, the product is very need-based. For a vehicle owner, especially in rural or semi-urban markets, the performance of the oil could directly impact their livelihood. When they see clear value, they are willing to pay for it.

From a finance lens, we evaluate this like any other investment, looking at volume growth, repeat purchase, distribution reach and overall contribution. The stickiness is driven by consistent product quality and the trust customers place in the brand.

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4. As B2B relationships evolve towards service-led models and long-term contracts, how do you evaluate risk and returns?

There is always a risk with long-term contracts. If something changes suddenly, it can have a real impact on the business.

Having said that, the way we look at it is quite simple. Instead of evaluating associations in isolation, we look at how we can maximise value for our B2B customers. We go beyond just the product.

In automotive lubricants, we work with most of the leading auto manufacturers in India and at times even co-engineer as per their requirements. Within industrial space, we offer solutions such as Chemical Management Sites for end-to-end lubricant management support, helping optimise usage, reduce waste and improve overall efficiency. In a way, we take lubricants off the mind of our customers.

5. Is sustainability beginning to influence client relationships, operating costs and capital decisions?

Sustainability is clearly becoming more important across industries. For us, it starts with getting our own house in order. Today, 100% of total energy consumed in manufacturing operations is renewable.

Additionally, Castrol products are sold in PCR packages, with 60% recycled content in bottles and 30% in pail packaging.

We are also part of the broader shift towards circularity, including the use of re-refined base oil. In 2025, we introduced RRBO-based engine oil for BS IV vehicles for an OEM customer. This area is still evolving and will require industry-wide collaboration.

Operationally, all three plants are powered through solar energy and IREC procurement. We have replenished 35.5 million litres of groundwater at our Silvassa plant, fully offsetting its water use. Last year, we collected and recycled 9,424 metric tonnes of plastic packaging waste, and achieved about 79% reduction in Scope 1 and 2 emissions versus the 2019 baseline.

These are not standalone initiatives; they increasingly shape how we operate and engage with stakeholders.

6. What defines the role of a CFO today, and where do you see Castrol over the next five years?

I do not think you can look at it as a choice between a controller CFO and a growth architect. A controller CFO is typically more compliance-focused, while a growth architect leans more towards driving growth. You actually need both. Compliance is as important as growth, and one cannot come at the cost of the other.

Personally, I try to balance that approach. It is about staying disciplined while also enabling the business to invest and grow.

The toughest decisions are often around prioritisation. There are always many good ideas. The challenge is choosing whether to pursue all of them or focus on a select few. That is where the real trade-offs lie.

Over the next five years, I see Castrol becoming stronger across both current and future portfolios. A more robust footing in industrial, a deeper rural footprint, and significant growth in adjacencies, especially in autocare and service networks.

We will also see a more Bharat-first product portfolio, driven by localization and shaped around the needs of the Indian market. Much of the groundwork is already in place. The focus now is on building on a strong core while scaling adjacencies in a meaningful way.