Shares of Adani Wilmar Ltd fell by 2 per cent after the FMCG company posted a 73 per cent slump in the second quarter profit, as the Fortune cooking oil maker reeled under dull demand from rural areas and wrestled with industry-wide input cost inflation. The company’s consolidated net profit for the second quarter ended September 2022 or Q2 FY23 fell to Rs 48.7 crore from Rs 182 crore a year ago.
At 12:45 pm, the stock was quoting at Rs 681.90 apiece on the National Stock Exchange, down by 2.46 per cent. However, the stock is up 154 per cent in 2022 so far.
Adani Wilmar, a joint venture between Indian conglomerate Adani Group and Singapore’s Wilmar Group, saw revenue from operations climb more than 4 per cent year-on-year (YoY) to Rs 14,150 crore as against Rs 13,558 crore. The growth pace has been dragged by a decline in mainstay edible oil. Meanwhile, its total expenses rose to Rs 14,149.6 as compared to Rs 13,354 crore in the corresponding quarter of the previous fiscal.
For the quarter, the company posted 4.4 per cent rise in revenue from operations at Rs 14,150 crore as against Rs 13,558 crore in the year-ago period. “Despite the challenging external environment, we have registered strong volume growth of 9 per cent in the high single digits in Q2FY23 riding on the growth in the Food & FMCG segment and Industry Essentials,” the company said.
In Q2FY23, the volume share of Food & FMCG went up to 16 per cent and the management expects to take this to 30 per cent over the next few years.
However, earnings before interest, taxes, depreciation, and amortisation, or EBITDA declined 40 per cent YoY to Rs 254.5 crore while margins contracted to 1.8 per cent from 3.3 per cent in the same quarter last fiscal.
“Sharp fall in prices of palm oil, soyabean oil and sunflower oil left most of the players with high price inventory in hand. The company also passed on the benefit of lower prices to the consumers. This coupled with currency depreciation impacted margins during the quarter,” the company said.
Adani Wilmar sees positive signs of recovery in edible oils business for H2FY23, with softening of commodity prices and recent uptick in demand on the back of festivities and weddings.
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