Adani Wilmar expects low single-digit revenue growth in Q2

13 Oct 2022 , 09:41 AM

The consumer goods company owned by Gautam Adani, Adani Wilmar Ltd., is expected to have low single-digit revenue growth in the second quarter that ended in September, as a result of ongoing macro problems.

According to Adani Wilmar’s quarterly business update submitted to the markets on Wednesday, the market shocks of high inflation followed by a dramatic decrease in prices were mostly absorbed in the second quarter.

The largest edible oil manufacturer in the nation, which distributes under the brand name Fortune, stated that stronger volume growth was seen in the masstige category than in the premium category during the quarter.

According to the company, the food and fast-moving consumer products basket maintained its upward trend from prior quarters, growing by more than 40% and utilizing the pan-India distribution of the edible oil business.

A close to 20% increase in industry necessities was also reported during the quarter. Overall, the firm maintained a positive growth trajectory, especially in the food and FMCG, as well as the oleo chemicals division.

The corporation claims that the prolonged geopolitical impasse, rising interest rates, the gradual increase in rural demand, and the postponed monsoon withdrawal in the majority of India had an influence on the three months up until September.

However, the company noted some positives in a statement, including a softening of commodities prices and higher food grain production forecasts for FY22, which were announced as part of the fourth advance estimates.

Edible oil prices, specifically those for palm, soy, and sunflower oils, substantially dropped throughout the quarter and are currently trending at levels from before Covid-19.

The majority of players now have high-priced products on hand due to the rapid decline in prices.

To maintain its market dominance, Adani Wilmar passed the savings on to its customers. But this had an impact on margins for this quarter together with currency depreciation. Due to events that the industry experienced in this quarter, the margin hit was “purely cyclical” in nature, it claimed.

According to the corporation, both revenue and volume growth is anticipated to be in the “low double-digits” for the first half of the current fiscal year. On the strength of celebrations and a drop in prices across all food categories, it anticipates a rebound in consumption in the second half of FY23.

For an undisclosed sum, Adani Wilmar recently purchased a number of brands from McCormick Switzerland, including the Kohinoor culinary brand.

The majority of the company’s diverse product offerings are kitchen staples such as edible oil, wheat flour, rice, legumes, besan, and sugar.

According to the corporation, its main brand Fortune covers over 113 million households, meaning that at least one in three families utilize a Fortune product.

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