Adani Wilmar fell 1.54% to Rs 672 after the company reported 73% drop in net profit to Rs 49 crore in Q2 FY23 from Rs 182 crore in Q2 FY22.
Revenue during the quarter rose by 5% YoY to Rs 14,209 crore. In Q2 FY23, Edible Oil revenue was Rs 11,221 crore (down 2% YoY), Food & FMCG revenue was Rs 1,015 crore (up 58% YoY) and Industry Essentials revenue was Rs 1,914 crore (up 33% YoY).
Volumes improved by 9% to Rs 1.32 million metric tonnes (MMT) in Q2FY23 from 1.21 MMT in Q2 FY22. Edible Oil volumes were at 0.82 MMT (down 1% YoY), Food & FMCG volumes were at 0.22 MMT (up 41% YoY) and Industry Essentials volumes were at 0.28 MMT (up 22% YoY) in the second quarter.
The company said that in the edible oils segment, the quarter that went by saw multiple challenges in consumer demand with several macro headwinds in the form of high inflation, rising interest rates, delayed monsoon and tepid rural demand.
Edible oil volumes remained flat due to sluggish demand in the semi-urban and rural markets. However, sequentially quarter-over-quarter, edible oil grew by 17% on volumes, suggesting uptick in demand in Q2 FY23.
The company witnessed multiple headwinds on the margin front, with the high volatility in edible oil prices, allotment of lower TRQ (tariff rate quota) and inflation impact on our operating expenses.
EBITDA declined by 31% to Rs 313 crore in Q2 FY23 from Rs 455 crore in Q2 FY22.
Post the acquisition of Kohinoor brand in May 2022, the company relaunched the entire product range to the markets in August 2022. The company is optimistic on the prospects of market share gains in the rice business with the strategy of addressing premium consumer segment through Kohinoor brand and mass segment through brand Charminar, and penetrating the HoReCa segment through the Trophy brand.
Market share in Edible Oil grew by 30 basis points to 18.5% on a standalone basis and 19.5% on a consolidated basis.
Angshu Mallick, MD & CEO, Adani Wilmar, said: The overall performance continues to show an uptrend due to the robust execution of our strategy to grow the Food & FMCG business by driving its penetration through the distribution strength of the edible oil business. During the quarter, the volume share of Food & FMCG has gone up to 16% and we expect to take this to 30% over the next few years. Going forward, we expect H2FY23 to be better with a recovery in consumer demand in edible oils business too.
In its near-term outlook, the company said that September 2022 witnessed higher edible oil imports of 1.59 MMT against 1.37 MMT in August 2022. The company is seeing positive signs of recovery going forward in edible oils business for H2 FY23, with softening of commodity prices and recent uptick in demand on the back of festivities and weddings.
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.
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