FMCG major Adani Wilmar on Wednesday reported its third quarter earnings for the financial year 2023-24 at Rs 200.89 crore, down 18.4 per cent in comparison to Rs 246.16 crore during the corresponding quarter of previous year. It posted revenue from operations at Rs 12,828.36 crore, down 16.9 per cent as against Rs 15,438.05 crore during the third quarter of FY23. The company EBITDA stood at Rs 503.8 crore, down 16.7 per cent on-year.
In a regulatory filing, Adani Wilmar said that the company’s growth trajectory remained steady with a volume growth of 5 per cent YoY in Q3FY24 and 13 per cent YoY in 9M FY24. “Consumer demand in packaged staple foods stayed strong during the festive season of Q3. The branded products that comprises ~80 per cent of edible oils and Foods & FMCG sale, grew faster than the overall sales in both segments. Rural sales also stayed steady for us. Despite good volume growth, revenue is optically lower by 17 per cent YoY in Q3, as product pricing has been lower during the year, in-line with lower raw-material costs,” it said.
The profitability of the company, it added, has again normalized after witnessing two quarters of subdued profits due to high-cost inventory and hedge dis-alignment. Profitability of the Bangladesh subsidiary continues to be in stress due to the local currency issues.
The company is progressively using more regional approaches to drive deeper penetration into the local markets and is on track to more than double its rural town coverage during the financial year from ~13,000 towns to 30,000+ rural towns by the end of this financial year. “We have recently started capturing the exports opportunity with a dedicated export team to set up distribution channels and develop the markets. The company has been adding new markets and our branded products are now available in 38 countries across six continents,” it said.
Angshu Mallick, MD & CEO, Adani Wilmar Limited, said, “We continued to witness the growth momentum in packaged staple foods driven by shift in consumer preferences for hygienic and quality products. The revenues from the branded products in the domestic market, under the Food & FMCG segment have been growing at +40 per cent YoY in the past 9 quarters enabling us to close FY’24 with an estimated ~Rs 5,000 crore of revenue in the segment. We are putting our energies in rapidly scaling up our distribution network for General Trade to realize the immense opportunity available in the packaged staple foods. At the same time, we are developing our HORECA and Exports channels which will continue to witness much faster growth in the near future. Our strong market share in the alternate channels put us in an advantaged position from the fast-growing rate of this channel.”
Adani Wilmar’s Q3 performance across segments
The edible oil segment recorded revenue of Rs 9,711 crore, optically lower by 23 per cent YoY in Q3FY24, as product pricing has been lower during the year, in-line with lower raw-material costs. The volume was flat YoY in Q3 and grew by 8 per cent YoY during 9M FY24. Branded products have been growing at a faster pace. Branded products grew by 3 per cent YoY in Q3. “The growth in edible oils segment continues to be driven by strong growth in sunflower oil and mustard oil, which have been growing faster than the industry due to strong brand equity,” said Adani Wilmar.
The Food & FMCG segment, which includes products such as wheat flour, rice, pulses, besan, sugar, poha and soap continued to outperform. During the quarter, the segment revenues grew at 25 per cent YoY, with an underlying volume growth of 17 per cent YoY. Exports restriction has been a drag on Foods growth in the last three quarters. In the domestic market, branded products revenue has been growing at +40 per cent YoY for the last nine quarters. Wheat business gained share in South India from multiple interventions.
The industry essentials volume grew by 17 per cent YoY in Q3FY24 and 21 per cent YoY in 9M FY24, supported by robust growth in Castor & Oleochemical businesses. The segment recorded revenue of Rs 1,844 in Q3.