Castrol India shares soar almost 6%; here is why the stock is rallying today

Castrol India shares rallied almost 6% on Monday, July 14, to hit an intraday high of ₹232.43 on the National Stock Exchange after the company won victory in a ₹4,131 crore tax dispute case with the Maharashtra Sales Tax Department (MSTD). 

The company had received demand orders for ₹4,131 crore for the period 2007-08 to 2017-18 (10 years) from the MSTD in relation to the movement of goods from its plant/warehouses in Maharashtra to clearing and forwarding agents (CFAs) in other states.

The MSTD had alleged that such movements constituted interstate sales made pursuant to pre-existing customer orders in destination states.

Castrol India said it had contested MSTD’s claims, stating that the goods were not dispatched under any prior customer orders and its tax payment methodology was legally valid.

“The company received favourable orders from the MVAT Tribunal in relation to the above matter for all 10 years. The MSTD, however, appealed before the CESTAT against the orders for the period 2007-08 to 2015-16 and 2017-18 (9 out of 10 years). For the year 2016-17, MSTD did not contest the order of the MVAT Tribunal,” Castrol India said in a regulatory statement on Friday, July 11.

The aforementioned long-standing dispute with respect to the remaining period of nine years, which was pending before CESTAT, has now been concluded in favour of Castrol India.

There will be no financial impact on the firm, as it had not made any provisions for the ₹4,131 crore in its books, considering the likelihood of an economic outflow to be remote.

After opening at ₹224.50 per share on Monday, Castrol India stock touched an intraday high of ₹232.42 apiece, surging over 5.7% from its previous close.

At the time of writing the article, shares of Castrol India were trading at ₹227.05 apiece, rising 3.26% on NSE. Over a month’s period, the stock has gained over 6%.

Since January 14, 2025, which is six months, the stock has climbed 22.5%. Year-to-date, it has increased 10%.

The company’s market capitalisation stands at ₹22,146.45 crore.

Shares of the firm had touched their one-year high of ₹284.40 apiece on August 27, 2024, while their 52-week low of ₹162.60 was hit on January 28, 2025.