By Kritika Arora
Adani Wilmar posted a 10% rise in consolidated net profit at Rs 194 crore for the quarter ended June as the company’s sales and volumes improved during the quarter. The company’s revenue from operations rose 30% year-on-year (y-o-y) to Rs 14,731.62 crore during the quarter as the volumes increased 15% y-o-y to 1.19 million metric tons.
The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) grew 14% to Rs 496 crore (y-o-y). Its total expenses rose 30% y-o-y majorly led by a 29% on-year increase in the cost of raw materials.
While the fast-moving consumer goods (FMCG) industry saw a decline in consumption during April-June due to inflationary trends, Adani Wilmar said their volumes grew on the back of their staples. “We have a portfolio of staples which is consumers’ daily requirement like rice, besan, sugar and others. One may cut the budget on other products, but staples have to be consumed,” Angshu Mallick, managing director at Adani Wilmar told FE.
He added that the other reason for better volumes was its better distribution. “On pricing also we ensured, we priced it economically for the consumer. The price increase has been very minimal in case of staples, like not more than 5-7%,” Mallick said.
From April-June, the company’s edible oil volumes grew 6%, while food volumes increased 53% over the year. Within the food business, Adani’s wheat flour segment rose by 33% in volumes, rice by 73%, soya nuggets and value-added products by 21% and besan by 24% in volumes y-o-y, according to the company’s investor presentation.
Mallick said that while the consumption was squeezed in April-June, from July it has started opening up. Consumers are getting the benefit of lower prices and since festival season is setting in, everything is now looking positive both in rural as well as urban markets, he said.
“We expect an uptick in demand in Q2FY23 on the back of festivities and weddings across the country. We particularly expect growth in demand from rural markets, with expectations of a good monsoon,” the company said in a presentation to the investor. Further, it also expects healthy oils such as rice bran oil, mustard oil and blended oils to grow faster.
For April-June, rural areas contributed 31% to the company’s total sales and Mallick said that going ahead company would be focusing on a go-to-market strategy to drive higher rural market share.
The company would also look out for inorganic growth opportunities in terms of brands and assets in the food space, focus on wheat and rice as core staple business and launch new categories focused on health and wellness.
As long-term priorities, Adani Wilmar would have more packaged food products, build an export network and leverage the overseas demand for Indian packaged food products, it said in its investor presentation.