1. At a Glance
Once a legacy brand with a British accent, Veedol is now one of India’s oldest and slickest lubricant players—quietly compounding dividends while you weren’t looking. It’s small-cap, debt-light, dividend-happy… and surprisingly profitable in a sector full of greasy competition.
2. Introduction with Hook
Imagine being in a 1920s Royal Enfield, helmet on, mustache combed, roaring down an empty road. What’s purring under that hood? Veedol. A brand that’s been greasing the wheels of Indian mobility since your grandfather’s grandfather had sideburns.
- Net Profit FY25: ₹169 Cr
- Dividend Yield: 3.18%
- ROCE: 24% (yes, TWO-FOUR)
Yet, despite its vintage sheen, Veedol’s stock is -29% in the last year. So, is this a long-drive stock or one that’s low on engine oil?
3. Business Model (WTF Do They Even Do?)
Core business: Manufacturing & marketing lubricants under the “Veedol” brand.
Reach: Operates in 65+ countries but largely focused on India.
Segments:
- Automotive Lubricants: Passenger cars, 2-wheelers, CVs, gear oils, greases.
- Industrial Lubricants: Turbine oil, hydraulic fluids, thermic fluids (yes, very hot stuff).
- Specialty Products: Including vehicle sanitization products—because 2020 trauma lives on.
No frills. Just friction-reduction.
4. Financials Overview
Revenue & Profit Growth (Consolidated):
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS (₹) |
|---|---|---|---|---|
| FY21 | 1,258 | 141 | 13% | 80.76 |
| FY22 | 1,536 | 123 | 10% | 70.54 |
| FY23 | 1,854 | 115 | 8% | 65.76 |
| FY24 | 1,931 | 143 | 9% | 82.03 |
| FY25 | 1,970 | 169 | 10% | 96.85 |
Verdict: Flat topline, but margins and net profit are trending up. Good fiscal oiling!
5. Valuation
- Market Cap: ₹2,963 Cr
- P/E: 17
- Book Value: ₹525 → P/B ~3.2x
- ROE: 20%
Fair Value Range Estimate: ₹1,850 – ₹2,250/share
Valuation seems fair-to-cheap given the ROCE/ROE combo. But remember—it’s not Castrol. It’s Veedol. Expect lubrication, not combustion.
6. What’s Cooking – News, Triggers, Drama
- Dividend Bombshell: ₹22/share announced for FY25—yielding a lovely 3.18%.
- Management Shuffling: HR Head and Director resignations in July 2025. Slight HR drama but nothing operational.
- Promoter Buying Spree: Promoter holding increased from 57% in FY23 to 62.35% in FY25.
- Margins Improving: Q4FY25 OPM at 13% (vs 9% average) – potential cost efficiency kicks?
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 3 |
| Reserves | 911 |
| Borrowings | 22 |
| Total Assets | 1,253 |
| Cash & Equivalents | 3 |
Key Points:
- Debt? Almost negligible.
- Reserves compounding nicely.
- Balance sheet tighter than an F1 pit stop.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | 103 | 6 | -81 | 28 |
| FY24 | 156 | -91 | -85 | -21 |
| FY25 | 30 | +72 | -99 | 3 |
Comment: FY25 saw a dip in cash ops. But the big investment reversal helped preserve net cash. Free cash flow? Still oily.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 24% |
| ROE | 20% |
| Dividend Payout | 54% |
| Interest Coverage | 50x+ |
| Inventory Days | 104 |
| Debtor Days | 54 |
Verdict: Very capital-efficient. Management is returning cash while maintaining discipline. Stress level = Zumba class.
10. P&L Breakdown – Show Me the Money
| Year | Sales | OPM | Net Profit | EPS | Div/share |
|---|---|---|---|---|---|
| FY23 | 1,854 | 8% | 115 | 65.76 | 20 |
| FY24 | 1,931 | 9% | 143 | 82.03 | 20 |
| FY25 | 1,970 | 10% | 169 | 96.85 | 22 |
Climbing profits. Increasing dividend. Mild revenue growth, but decent margin expansion.
11. Peer Comparison
| Name | P/E | ROCE | ROE | Div Yield | Sales (₹ Cr) | OPM |
|---|---|---|---|---|---|---|
| Veedol | 17.0 | 24% | 20% | 3.18% | 1,970 | 10% |
| Castrol | 23.4 | 55% | 41% | 3.8% | 5,462 | 23.6% |
| Gulf Oil | 17.1 | 29% | 26% | 2.86% | 3,554 | 13.2% |
| Panama Petrochem | 11.5 | 20% | 15.9% | 1.96% | 2,793 | 8.8% |
Insight: Veedol is the value investor’s Gulf Oil. Cheaper than Castrol, cleaner than Panama, and with a loyal dividend fan club.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 62.35% (Q1 FY26)
- FII Holding: 1.14%
- DII Holding: 1.17%
- Public: 32.87%
- No. of Shareholders: ~60,000+
Also, the company maintains >50% dividend payout for over a decade. It’s basically a monthly SIP for your retired uncle.
13. EduInvesting Verdict™
Veedol is your classic, underhyped, cash-generating oil stock that your brokerage never calls you about. It doesn’t promise 10x returns in 10 months—but quietly compounds profits, pays consistent dividends, and runs a zero-drama balance sheet.
Sure, topline isn’t zooming like Gulfstream—but if you like slow-and-steady compounding with a dash of dividend ghee, this one’s smoother than synthetic oil on a German crankshaft.
Metadata
– Written by EduInvesting Research | 17 July 2025
– Tags: Veedol Corporation, Lubricants, Dividend Stocks, Oil & Gas, Value Investing
