Castrol India's Deepesh Baxi Speaks On The Firm's Q3CY22 Results | Bazaar Open Exchange | CNBC-TV18

Good morning, Sonia, and thanks for having me on the channel. Yeah, you're right. I think this quarter we've got hit on various fronts in terms of the high input cost, mainly driven by base oil which is our key component, and Forex as well. In terms of the responses, clearly we have been proactive. We have taken three price increases during the year. We took one in March, one in June, and one in September as well. So that has obviously helped us in tidying over the input cost increases. We also have a plan where we look at our costs very closely. So overall, if you look at it, most of the COGS increases, which is the input cost increases, we've been able to recover in the nine months that have ended in September.

I think 25% is something that does look a stretch given the outlook of the next three to six months. I think Forex could be anybody's guess where this will end up. Having said that, we always look at pricing in the market from a strategic angle, and we took one in September which was very forward-looking. I think there are a lot of other initiatives which we are doing in the market from a point of view of making sure that not only the core business but other initiatives in the service and maintenance as well start generating revenues for us. So I would say it is more a band of margin that we are looking at, anything between 23% to 25%. I think there will be quarters where we will operate at a lower band, but the idea is to clearly operate at the 25% range, which has been our trajectory over the last couple of years as well.

So if I had, obviously, thanks, Prashant. I think from a point of view of the overall nine months, yes, I would say it's been a mix of both volumes and pricing. Our volumes have gone up almost 6% to 7% compared to last year nine months. As far as this quarter is concerned, volumes have been under pressure; it has taken the impact of three price increases that we have had. So to summarize: volume plus pricing in the nine-month period, largely pricing in this quarter.

Yeah, a great question, Prashant. This is something we look at always. Our market share in the entire private sector is plus 20%, which is the highest; we are the number one in that. In fact, if you see personal mobility, which is cars and bikes portfolio, there we run a market share of more than 30%. The price-volume equation is always a trade-off, but having said that, I think we are very clear in terms of how we are positioning our brand. It is a premium brand, and we want to make sure that we are operating within that premium. But that premium comes with the right technology and customer satisfaction as well. We do take interventions on pricing. We've done that in 2020 when our CBO portfolio was at a very high premium and we made that intervention. We've also gone away from taking blanket price increases; we look at it tactically, we look at product market and segment and make the necessary interventions. So when I say we've taken three price increases, it's not been across all our aggregate products. We did not take a price increase in the June quarter mainly because it's a season for tractor products as well. So we continuously do that to make sure, but not at the expense of downgrading the product.