Savita Oil Technologies has become the first lubricant company in India to start manufacturing Ester molecule (domestically), which is used in biodegradable applications and also acts as a cooling agent in two- and three-wheeler electric vehicles.
The company has introduced the Savsol Ester 5 range for two-wheelers and four-wheelers.
In a select media interaction Gautam Mehra, MD and Siddharth Mehra, Executive Director – Business Development, Savita Oil Technologies revealed that while the Ester technology is not new globally, it has been always used in high-demanding applications such as jet engines, motorsport and industrial among others.
For FY2023, the company reported revenue of Rs 3,653 crore, up 33.8 percent, Rs 226 crore net profit, down 13.35 percent YoY. This includes 75 percent of revenue from the domestic market, while the remaining came from exports.
Gautam Mehra anticipates that the potential of its new investments and product introduction could very well “add Rs 1,000 crore to its topline in the coming years.”
Focussing on mass-market segments
What’s interesting to note is that with its new formulation, Savita Oil will not only be able to expand its product offering for premium applications but also aims to make the pricing competitive (in automotive lubricant space) targeting the commuter two-wheeler and passenger vehicle segment. The company plans to invest Rs 50-70 crore in the coming few years for expansion.
It has already commissioned 8,000-tonnes production of Ester molecules at its facility and expects to produce 4,000-tonnes by October this year. The Ester range is claimed to offer upto 28 percent less engine deposits in certain tested formulations; 33 percent less friction shown in Esters vs regular Group 3 base oil.
At present, Savita Oil has a market share of 2.5 percent in the automotive and industrial lubricant space, it aims to attain “5-6 percent” market share in the next 2-3 years. In terms of revenue, the company reported automotive and industrial sales contribute about 20-25 percent of its revenue.
Responding to a query on the pricing of the new product range, the company said it will make it competitively priced, as to onboard mass-market users. The focus would be on increasing market share and not just margins.
Branding and awareness
Siddharth Mehra stated it has also will focus on branding and creating awareness around the new lubricant range extensively. Interestingly, it has roped in Bollywood Actor Sidharth Malhotra as its new Brand Ambassador.
Currently, the company already counts the likes of Hero MotoCorp, Mahindra & Mahindra, Swaraj Tractors, Tata Motors, Tata Hitachi, SANY and Hyundai Construction Equipment amongst its OE clients in India. Gautam Mehra also revealed that the company has already started testing its new range of Ester molecule lubricant with an existing customer and a new OE customer in the country.
In addition to the IC-vehicle applications, the company also sees the demand for Ester molecule range of fluids to being demanded in the transmission, liquid cooling battery space in the EV segment.
Lastly, in addition to the cost and performance benefits, the Ester range is said to be environmentally friendly due to its natural biodegradability properties.
The company currently has four manufacturing plants in India and exports to 75 countries globally.
