Adani Wilmar fell 3.08% to Rs 686.60 after the edible oil major said its overall revenue is expected to grow at low single digit year-on-year in the July-September quarter.
Adani Wilmar markets its edible oils and other food items under the Fortune brand. The company shared a preliminary update on the standalone performance during the Q2FY23.The company said that multiple macro challenges continued to impact the business in the quarter gone by owing to domestic and global cues, continued geo-political standoff, rising interest rates, slow uptick in the rural demand and delayed withdrawal of monsoon in major parts of India.
However, softening of commodity prices and higher foodgrain production estimates for FY22 announced as part of fourth advance estimates were some positive signs of recovery.
"In edible oil context, the second quarter essentially absorbed the market shocks of high inflation followed by sharp decline in prices," the company said.
Due to these factors, the company said its overall revenue is expected to grow at low single digit during the quarter (y-o-y), whereas H1 revenues and volumes are expected to register a low double-digit growth.
Food & FMCG basket continued its growth trajectory similar to previous quarters registering a growth over 40%, leveraging the pan-India distribution of edible oil business.
Industry Essential business also grew close to 20% during the quarter and H1 both. Business remained positive on growth trajectory riding on Food & FMCG and Oleo chemicals business.
Edible oil business witnessed higher volume growth in the masstige category rather than premium category as a result of downtrading that continued during the quarter.
The prices of edible oils, namely - palm oil, soyabean oil and sunflower sharply declined in the quarter and now trending more or less at pre-covid levels.
The company said it passed on the benefit of lower prices to customers in a bid to protect market share. This coupled with currency depreciation will have impact on margins for this quarter, which is purely cyclical in nature on account of events that industry witnessed in this quarter.
The firm remains optimistic on its brand equity and is hopeful of sequential improvement in demand trends with easing retail inflation and good monsoon. The consumption may see an uptick in H2 FY23 on the back of festivities and softening of prices across food categories.
The company said it is committed to invest in the large untapped food & FMCG business and aspires to become one of India's largest food FMCG in the coming years.
Adani Wilmar, a joint venture between Adani Group of India and Wilmar Group of Singapore, is one of the largest consumer Food FMCG companies in India. The company has a diversified product portfolio offering most of the primary kitchen essentials including edible oil, wheat flour, rice, pulses, besan and sugar with market leading positions across products.
Adani Wilmar reported 10% rise in consolidated net profit to Rs 19.4 crore on 30% increase in revenue to Rs 1,478.4 crore in Q1 FY23 over Q1 FY22.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
