Adani Wilmar reported robust double-digit volume growth, driven by strong performance in the Food and Fast Moving Consumer Goods (FMCG) sectors, according to its quarterly business update. However, the edible oil segment faced challenges in the second quarter of FY24.
The company achieved a standalone volume growth of 11 per cent in the quarter. The Food & FMCG segment showed a remarkable 25 per cent year-on-year (YoY) revenue growth in Q2, while the edible oil business experienced a 19 pe rcent decline. For the first half, the former exhibited a growth of 28 per cent, while the latter declined by 16 per cent.
Due to government restrictions on rice exports, the company faced a decrease in exports. Nevertheless, the food and FMCG segment’s revenue reached around Rs 4,300 crores over the last twelve months, contributing approximately 10 per cent to the company’s standalone revenue in the quarter ending on 30 September.
In the domestic market, revenue from branded products has consistently grown at a rate of 40 per cen YoY for the past 8 quarters, constituting around 80 per cent of the overall segment revenue in Q2’24. The company has expanded well in key products, including wheat flours, rice, pulses, besan, sugar, soya chunks, poha, and soap.
Despite having the brand equity of “Fortune,” Adani Wilmar has faced challenges in capturing market share in the South. However, it anticipates that fast-selling items such as Fortune Sunflower oil and Fortune Chakki Fresh Atta will contribute to scaling and improving sales of other food items in the region.
The edible oil segment recorded a volume growth of 5 per cent in Q2, with a 16 per cent volume growth for H1. The company expects the second half of the year to witness better volumes than the first half due to increased demand from out-of-home and festive consumption.
In the industry essentials sector, there was a 25 per cent volume growth, driven by strong performance in oleo and castor businesses. Revenue in this sector grew by 1 per cent. The Oleo business’s main products—Stearic Acid, Soap Noodles, and Glycerin—experienced robust growth in the quarter. Adani Wilmar also maintains its position as India’s highest exporter of castor oil.
Expressing concerns about divergent trends in spot and future prices of edible oils, the company mentioned that profitability for the quarter remained under stress. Local edible oil prices were also affected by excessive imports in recent months.
