Castrol attractive for long-term investors

A robust balance sheet, sound business model and strong brand equity of its products is enabling Castrol India to churn out good cash flows year after year. Even amidst a slump in the automobile sector, the company’s lubricants will still have a large potential market to tap. This aftermarket is likely to be a big growth driver for the lubricant industry in general and Castrol in particular, over the next few years. Castrol India is the Indian subsidiary of U.K.-based Burma Castrol, which has been acquired by BP, and is engaged in manufacturing and marketing of automotive and industrial lubricants and specialty products. At an average payout of 85% of its profits, the company’s dividend payout has broadly grown in line with the corresponding growth in profit during the past five years. (November 24, 2008)