Current crude trend will benefit Gulf Oil, says Ravi Chawla

Ravi Chawla, managing director, Gulf Oil, spoke about the business outlook on crude levels, expansion plans in an interview with Swati Khandelwal of Zee Business.

What is your business outlook at the current crude levels?

Its impact will be visible on the base oil, our raw material, after a gap of 2-3 months. If it is a trend then it will be a positive one as its impact has been seen in the foreign exchange due to rupee depreciation in the second quarter. It will bring stability, which will be positive for the market.

What are your expectations from your new plant in Chennai in terms of numbers?

The plant was launched with an aim to expand our market share by beating internal production targets. We have a target to use plant's capacity to meet our growth plans for the next 3-4 years. In addition, it provides fleet savings in the South. Besides, our growth rate is going up as we have reported a volume growth of 22% this year against14% in the last fiscal, higher from the industry growth rate of 2-3%. This is a good growth rate and market share, and we want to utilise the capacities of the Chennai plant, which was set up for growth purposes, to optimum levels.

What are your retail expansion plans?

The strong performance of our brand, Gulf Oil, has helped it to notch the third position in the market, which can be capitalised by increasing distribution points. We have taken several focused steps in the process like distribution and stockist programme for the rural markets. About 700 rural stockists are engaged in promoting our products in interior areas. We have also created a 7,000 franchise 'Bikestops' at independent workshops and they are selling Gulf Oil products. In addition, an IT initiative has been launched to connect Gulf Oil with its outlets and go for a below the line activations. Being a key strategy, it will help us in increasing our market share and capitalise brand status of Gulf Oil.

Gulf Pride, a range of two-wheeler batteries, was launched by Gulf Oil. What is your expectation from the segment in terms of revenue?

We will promote the brand by advertising and opening new distribution outlets. Secondly, I am quite confident about its quality. About 30% of these batteries are being used for replacement purposes in the unorganised sector. Last year, Gulf Pride had a turnover of around Rs 45 crore and we are working on a strategy to double it every year.

Gulf Oil reported a robust volume growth of 22% in the second quarter. Do you think that the same growth rate will continue in the second half of this fiscal?

We will try to be close to 22% growth that has been achieved in the first half.

Your margins fell almost 2% in the second quarter. What is your outlook on margins?

We hope that the margins, which stood around 17% in the second quarter, will see some positive movement.