Adani Wilmar, a major player in food and edible oils, anticipates a consumption boost in the second half of FY25, driven by a long wedding season starting in November. The company expects improved rural consumption, thanks to a likely robust rabi crop. This comes despite a planned 20-22% price increase in edible oils this quarter, following the September import duty hike on crude and refined oil.
“Edible oil consumption is substantial during weddings, with increased demand both in-home and out-of-home. We expect our categories, from basmati rice to edible oil, besan, and wheat flour, to benefit from this trend. The wedding season, combined with enhanced rural consumption due to the kharif harvest and a promising rabi crop, should drive demand in the second half of the year,” stated Angshu Mallick, CEO & MD of Adani Wilmar, in a discussion with FE.
Sector experts stated that there will be around 115 wedding days between November and May next year, with the bulk of ceremonies between November and March.
The company is also not experiencing demand pressure in urban markets. “Brand loyalty is high in kitchen essentials, and consumers tend to stick with familiar brands, which supports sales growth,” Mallick added.
In Q2FY25, Adani Wilmar’s revenue grew by 18% year-on-year to Rs 14,460 crore, with a 12% increase in underlying volume. The edible oil segment, contributing about 62-63% of annual revenue, saw a 21% year-on-year revenue increase and 17% growth in volume. The food and FMCG segment posted a 34% revenue growth and a 33% increase in volume over the previous year.
The company achieved a net profit of Rs 311 crore in Q2, reversing a Rs 131 crore net loss from the same period last year, company’s CFO Shrikant Kanhere said. Earnings before interest, tax, depreciation, and amortization (Ebida) surged four-fold to Rs 566 crore, with Ebitda margins rising 270 basis points to 3.9% in Q2.
Kanhere attributed this performance to relatively stable edible oil prices and an expanded distribution network. By the end of the Q2, Adani Wilmar’s reach extended to over 36,000 rural towns, up from 5,000 in March 2022, with plans to reach 50,000 by the end of FY25.
From: financialexpress
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