CFO — Finance, Cash & Capital

Quality of earnings, 13-week cash, a net-debt-free balance sheet, working-capital unlock and the value levers behind margin expansion and premiumization.

Valvoline Cummins Private Limited · FY25 (Apr'24–Mar'25, audited)

Leading MNC / private aftermarket lubricants brand in India — single-digit share, premiumising

500 employees · 1 plant + regional DCs · 6 export markets

▲ Executive read· the answer, then the moves

The JV is net-debt-free — 0.00× net debt/EBITDA against a 3.0x notional ceiling — so the balance sheet funds growth capex AND a sizeable dividend to both parents. Normalizing DSO to 32d releases ≈ ₹39 Cr and clears ₹30 Cr of overdue receivables, while liquidity of ₹450 Cr (≈ 8 weeks of cover) absorbs base-oil price & USD/INR swings.

8 of 8 headline metrics improving vs prior · still off target: Total Revenue ₹2,361 Cr vs ₹2,650 Cr, EBITDA ₹281 Cr vs ₹340 Cr, EBITDA Margin 11.9% vs 13.5%

Do now — ranked by urgency

1
Base-oil cost & USD/INR — the swing factorAct now
Why it matters
Leverage Aramco sourcing synergy; hedge FX; sequence price actions.
What's driving it
Gross margin
Signal: Alert
FYI
~55-60% base oil is imported (Group II/III); crude + FX spikes compress margin before SKU repricing.
Act →
2
Pull working capital — drive DSO 38→32dWatch
Why it matters
Closing the DSO gap releases ≈ ₹39 Cr of one-time cash; ₹30 Cr is already >60 days overdue and at collection risk.
What's driving it
DSO 38d vs 32d target
Overdue (>60d) ₹30 Cr of ₹246 Cr AR
FYI
Division-level unlock to a 35d stretch ≈ ₹17 Cr
Owner: Treasury
Collect →▤ open the overdue receivables
3
OEM & DEF are margin-dilutiveWatch
Why it matters
Grow retail / synthetic faster than DEF / OEM to protect blended margin.
What's driving it
Segment margin mix
Signal: Alert
FYI
OEM & genuine oil (8.5% EBITDA) and DEF are LOW-margin and rising in the mix; retail & synthetic carry the margin.
Act →
4
Working-capital & freight optimization — PlannedWatch
Why it matters
Unbanked EBITDA & capex-ROI until captured.
What's driving it
₹12 Cr run-rate targeted
Signal: Savings program
FYI
Inventory / DSO discipline + freight & warehousing efficiency.
Owner: CFO
Act →

EBITDA

₹281 Cr

+7% YoY · 11.9% margin

Liquidity

₹450 Cr

≈ 8 weeks of disbursements

Debt capacity (unused)

₹843 Cr

net-debt-free today · to a 3.0x notional ceiling

Working-capital unlock

₹39 Cr

DSO 38→32d target

Quality of earnings

Reported → Adjusted EBITDA

₹8 Cr of add-backs (3% of adj.) — the audit-grade walk.

Driver bridge

EBITDA — prior to current year

Synthetic-mix & premiumisation vs. Aramco base-oil sourcing vs. OEM/DEF drag vs. base-oil (crude / USD-INR) cost.

Treasury

13-week direct cash flow forecast

Above minimum

Net weekly cash (bars) and ending cash (line) vs. ₹60 Cr minimum. Forecast trough: ₹111 Cr.

₹120 Cr

Opening cash

₹741 Cr

13-wk collections

₹732 Cr

13-wk disbursements

₹129 Cr

Closing cash

Capital structure

Net-cash position vs. notional ceiling

Net Debt/EBITDA held at net cash (0.0x) against a 3.0x notional covenant ceiling — maximal balance-sheet headroom.

Net cash = firepower

Balance-sheet headroom

Unused debt capacity to 3.0x notional

₹843 Cr

net-cash today · ≈ 12.0 yrs of ₹60–80 Cr/yr growth capex

Net Debt / EBITDA (net cash)0.0x

Balance-Sheet Headroom3.0x

Interest / Debt-Service Cover45.0x

Free Cash Flow₹180 Cr

Where the cash is trapped

Working-capital cash unlock

₹17 Cr opportunity

Normalizing laggard divisions to a 35-day DSO releases ~₹17 Cr of one-time cash.

All Fleet40d

₹8 Cr

Ultramax45d

₹7 Cr

ProFleet38d

₹2 Cr

Concentrated in the industrial (Ultramax) and export books where distributor & B2B credit terms lag the faster OEM / e-commerce receipts — the fastest cash win this fiscal year.

Revenue quality

Premium & synthetic engine & margin

Premium & synthetic revenue growth and where EBITDA is generated.

Premium & Synthetic Revenue

₹780 Cr

▲ 14.7% vs priorTarget ₹980 Cr

Premium / Synthetic Mix %

33.0%

▲ 10.0% vs priorTarget 40.0%

Distributor / OEM Repeat Retention

106.0%

▲ 1.9% vs priorTarget 110.0%

Channel / Account Retention (Gross)

94.0%

▲ 2.2% vs priorTarget 96.0%

Premium & synthetic engine

Premium & synthetic revenue bridge

Trend

Premium & synthetic revenue growth

By division

EBITDA margin

Collections

AR aging

Total AR ₹246 Cr

Current days₹140 Cr

1-30 days₹55 Cr

31-60 days₹21 Cr

61-90 days₹18 Cr

90+ days₹12 Cr

Overdue (>60d) = ₹30 Cr at collection risk.

By account

Receivables & credit watch

Accounts ranked by DSO and credit/churn risk.

Account	Revenue	DSO	Repeat	Credit/Churn
South Asia export distributors	₹120 Cr	52d	109%	Medium
Construction, mining & genset OEMs	₹200 Cr	48d	106%	Medium
Tractor & agri OEMs / dealers	₹150 Cr	46d	105%	Medium
Industrial B2B accounts	₹260 Cr	45d	110%	Low
Fleet operators (CV)	₹340 Cr	42d	107%	Medium
National distributor network (~450)	₹900 Cr	40d	106%	Medium
Tata Motors & OEM tie-ups	₹180 Cr	34d	107%	Low
Retailers & mechanics (55-60k)	₹520 Cr	30d	108%	Medium
Cummins (Premium Blue OEM)	₹300 Cr	30d	108%	Low
Modern retail / e-commerce (Amazon, Moglix)	₹90 Cr	18d	111%	Low

Brands

Product-brand economics

EBITDA growth, DSO normalization and savings realization (at-launch → current).

Product brand	Since	Revenue	EBITDA	DSO	Transform	Savings	Status
All Fleet	1998	₹620 Cr	8% → ₹70 Cr	48→40d	96%	88%	Integrated
Premium Blue	1998	₹430 Cr	6% → ₹37 Cr	42→33d	94%	82%	Integrated
ProFleet	2005	₹250 Cr	7% → ₹28 Cr	44→38d	90%	80%	Integrated
Ultramax	2008	₹240 Cr	8% → ₹28 Cr	50→45d	78%	68%	In progress
Champ 4T	2010	₹210 Cr	9% → ₹25 Cr	38→32d	92%	78%	Integrated
MaxLife	2015	₹180 Cr	11% → ₹27 Cr	36→30d	80%	72%	In progress
SynPower	2016	₹300 Cr	12% → ₹54 Cr	34→28d	82%	74%	In progress

Supply

Supplier terms & risk

Input & tooling spend, DPO (working-capital lever), delivery and risk.

Supplier	Category	Spend	DPO	OTIF	Score	Risk
Imported base oil (Group II/III, Aramco)	Base oil — imported	₹900 Cr	45d	95%	88	High
Additive packages (Lubrizol / Infineum / Afton / Oronite)	Additives	₹330 Cr	50d	94%	86	Medium
Domestic base oil (Group I/II)	Base oil — domestic	₹220 Cr	40d	93%	84	Medium
Packaging (HDPE cans, drums, metal)	Packaging	₹160 Cr	48d	92%	85	Low
Freight & warehousing	Freight & logistics	₹130 Cr	42d	91%	83	Medium
Brand royalty (Valvoline) + CIL service charge	Royalty & service charge	₹70 Cr	30d	99%	90	Low