VEEDOL - Veedol Corporat

📊 NSE: VEEDOL 🏢 Chemicals 📅 Last Updated: 12/14/2025 15:00

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single reportable segment, Lubricants. Standalone revenue from operations for FY25 was INR 1,527.28 Cr, representing a 1.88% decrease from INR 1,556.54 Cr in FY24. Consolidated revenue for FY25 was INR 1,970.49 Cr, a 1.96% increase from INR 1,932.61 Cr in FY24.

Geographic Revenue Split

India (Standalone) accounts for approximately 77.5% of consolidated revenue at INR 1,527.28 Cr. International operations and JVs, including Veedol UK and Veedol International DMCC (Middle East), contribute the remaining 22.5% (INR 443.21 Cr).

Profitability Margins

Standalone Net Profit Margin improved by 14.95% to 8.18% in FY25, up from 7.11% in FY24. However, the Operating Profit Margin declined by 15.42% to 4.50% from 5.33% in the previous year due to product mix shifts and cost pressures.

EBITDA Margin

Standalone EBITDA (Profit before Depreciation, Interest, and Tax) was INR 166.36 Cr (10.89% margin) in FY25, up 12.2% from INR 148.25 Cr. Consolidated EBITDA reached INR 240.24 Cr (12.19% margin), a 17.65% increase from INR 204.19 Cr in FY24.

Capital Expenditure

Historical capital expenditure is reflected in the acquisition of Right-of-Use assets, which amounted to INR 2.29 Cr in H1 FY26 compared to INR 29.13 Cr in H1 FY25. Planned CAPEX for capacity expansion is not explicitly disclosed in absolute INR Cr.

Credit Rating & Borrowing

The company held ratings of CARE AA; Stable (Long-term) and CARE A1+ (Short-term) as of October 31, 2024. These ratings were reaffirmed and subsequently withdrawn at the company's request. Borrowing costs are low, with standalone finance costs at INR 3.46 Cr in FY25.

⚙️ Operational Drivers

Raw Materials

Base oil is the primary raw material, representing the largest portion of the cost of goods sold. Its price is directly linked to global crude oil price fluctuations.

Import Sources

Sourced through a globally integrated supply chain, with significant procurement linked to Middle Eastern and international oil markets to support subsidiaries in the UK, UAE, and India.

Key Suppliers

Not explicitly named in the documents, but typically involves major Public Sector Undertakings (PSUs) and global petrochemical entities.

Capacity Expansion

Current capacity is not disclosed in MT; however, the company is re-organizing European operations to consolidate the supply chain, including the dissolution of Veedol Deutschland GmbH to streamline production through Veedol UK.

Raw Material Costs

Raw material costs are highly volatile due to crude oil linkage; the company noted that intense competition restricts its ability to immediately pass on these cost increases, impacting the operating margin which fell 15.42% YoY.

Manufacturing Efficiency

Focus has shifted toward improving the product mix; while standalone turnover dipped 1.88%, the focus on premium synthetic lubricants led to a 16.8% increase in standalone PAT to INR 127.25 Cr.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth will be achieved through international expansion via distributors and franchise partners, a strategic shift toward high-performance synthetic lubricants, and the consolidation of European supply chains to improve operational efficiency.

Products & Services

Engine oils for passenger cars, two and three-wheelers, heavy commercial vehicles, buses, tractors, and off-highway vehicles; industrial lubricants; Genuine Oil; and vehicle care products for brakes and air intake systems.

Brand Portfolio

Veedol.

New Products/Services

Next-generation synthetic lubricants and bio-lubricants designed to meet stricter emission norms and improve fuel efficiency.

Market Expansion

Expansion of the international distributor network and the incorporation of Veedol Ireland Limited (June 2024) to strengthen the European footprint.

Market Share & Ranking

Recognized as a leading manufacturer in India; specific market share percentage not disclosed.

Strategic Alliances

50% Joint Venture with Eneos (Eneos Tide Water Lubricants India Private Limited), which achieved a turnover of INR 298.82 Cr (+19.8% YoY) and a PBT of INR 76.05 Cr (+93.7% YoY) in FY25.

🌍 External Factors

Industry Trends

The industry is shifting toward premiumization and synthetic lubricants (viscosity-driven) due to stricter global emission norms and the need for improved fuel efficiency.

Competitive Landscape

Intense competition from large Public Sector Undertakings (PSUs) and established private sector lubricant companies.

Competitive Moat

The Veedol brand (established 1921) has a rich legacy and strong brand equity, which acts as a durable advantage in a commoditized market. This is sustained through a robust distribution network and franchise partners.

Macro Economic Sensitivity

Highly sensitive to industrial modernization and GDP growth, which drives the demand for industrial lubricants and heavy commercial vehicle engine oils.

Consumer Behavior

Shift toward high-performance synthetic lubricants as consumers seek better engine durability and compliance with modern vehicle standards.

Geopolitical Risks

Global supply chain integration exposes the company to trade barriers and geopolitical tensions affecting crude oil and base oil pricing.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by stricter emission norms and environmental standards for lubricant formulations; the company maintains ISO 31000:2018 certification for Risk Management.

Environmental Compliance

Focus on eco-friendly lubricants and bio-lubricants to comply with stricter environmental regulations and reduce environmental impact.

Taxation Policy Impact

Standalone tax expense for FY25 was INR 9.49 Cr, a significant decrease from INR 26.59 Cr in FY24.

Legal Contingencies

An exceptional item of INR 6.56 Cr was charged in FY25 for stock destroyed by fire. No frauds were reported by auditors under Section 143(12) of the Companies Act.

⚠️ Risk Analysis

Key Uncertainties

Volatility in base oil prices (linked to crude) and the potential inability to pass on costs in a competitive market are the primary risks, potentially impacting operating margins by over 15%.

Geographic Concentration Risk

77.5% of revenue is concentrated in the Indian market (Standalone operations).

Third Party Dependencies

High dependency on global base oil suppliers and third-party distributors for international market expansion.

Technology Obsolescence Risk

The shift toward Electric Vehicles (EVs) poses a long-term risk to traditional engine oil demand, which the company is addressing through advanced synthetic and next-gen products.