Robust Q1FY25: Adani Wilmar’s Revenue Climbs to INR 14,169 Crores

About Stock:

Adani Wilmar is recognized as one of the largest, newest, and fastest-growing companies in India’s FMCG industry. The company holds a 19% market share in branded consumer packaging and over 12% in edible oil consumption in India. With a presence in 2.1 million retail locations, the corporation has successfully expanded its reach to 121 million households nationwide.
In recent years, Adani Wilmar has been positioning itself as a comprehensive food and personal care company by expanding its product line and entering new markets. The company’s strategy focuses on expanding into new markets, enhancing its current product lines, and exploring international opportunities. Adani Wilmar’s extensive distribution network, strong brand identity, and commitment to innovation place it in a favorable position to capitalize on the growing demand for high-quality FMCG products in India and beyond.

Industry Overview:

Prominent consumer products companies are increasingly focusing on meeting the growing demand for edible oils, juices, snacks, and ready-to-eat meals. This shift is driven by changing consumer preferences, particularly in the wake of COVID-19, which has significantly boosted the growth of the packaged food sector in India.
Between 2019 and 2023, India’s retail industry grew by 34%, rising from $890 billion to $1.2 trillion. This growth has made India the fifth-largest retail market in the world. Several factors have contributed to the rise of the packaged food sector, including the increasing popularity of quick-service casual dining, changing consumer preferences, rising urbanization, evolving lifestyles, and the expansion of e-commerce in rural areas. Additionally, the growth has been supported by modern retail spaces.

Q1FY25 Performance Analysis:

As of Q1FY25, the company reported a solid year-on-year (YoY) volume growth of 12%, driven by consistent expansion in its staple packaged foods segment. Edible oils registered a 12% YoY growth, while the Foods & FMCG sector exhibited an impressive 42% YoY increase. The Essentials Industry segment also saw double-digit growth in the Oleo and Castor businesses. However, the oil meal business had a dampening effect on overall volumes.
The company’s revenue for Q1FY25 stood at INR 14,169 crores, reflecting a 10% YoY increase. This growth aligns with the volume expansion and marks the end of the disinflationary impact that declining edible oil prices had on revenue in previous quarters. The company’s ability to achieve this growth demonstrates resilience and successful navigation through market challenges.
Q1FY25 also saw the company achieving its highest-ever EBITDA, amounting to INR 619 crores. This achievement was primarily due to the stabilization of edible oil prices, which significantly bolstered the profitability of the edible oil business. The strong EBITDA performance underscores the company’s effective cost management and strategic pricing initiatives.
The demand for branded oil and foods remained stable, supported by a consistent shift in consumer preference towards packaged staple foods. This steady demand has been crucial in sustaining the company’s growth trajectory.
The company has maintained a strategic focus on capturing market share, especially in under-indexed markets and categories. By leveraging local nuances to enhance regional engagement, the company has successfully implemented customized campaigns, specialized packaging, localized pricing strategies, and targeted schemes. This focus has allowed the company to gain a competitive edge in various segments and regions.
The company’s continuous efforts to raise transparency, strengthen ESG performance, and actively engage in significant ESG evaluations are evident in its inclusion in these assessments. The company’s proactive approach to ESG matters reflects its commitment to ethical business practices and long-term sustainability.

Segment Wise Performance:

Edible Oil:
In Q1FY25, the company’s sales in the Edible Oil category increased by 8% to INR 10,649 crores, representing a 12% year-over-year volume rise. Strong demand, particularly in South India, for mustard and sunflower oils was the primary driver of this expansion. Additionally, the company introduced a specialty mustard oil package for pickle enthusiasts and launched a premium mustard oil called “Fortune Pehli Dhaar.” Notably, the edible oil category achieved its highest-ever profits in Q1FY25, with sector earnings of INR 398 crores. The corporation maintained stable prices throughout the quarter, with minimal disruptions to the supply chain.
Food & FMCG Segment:
In Q1FY25, Adani Wilmar’s Food & FMCG segment recorded sales of INR 1,533 crores, a 40% increase from the previous year. This achievement was largely attributed to higher market share in South India, increased presence in retail outlets, and an increase in repeat business. For the past 11 quarters, the branded foods category has experienced steady growth, with sales rising at an annual rate of nearly 30%. The market for wheat flour continued to outpace the overall sector, and the rice industry also made significant progress, supported by effective marketing campaigns. Furthermore, Adani Wilmar used trade schemes and strategic bundling to increase penetration, driving additional expansion in the edible oil industry.

Segment-wise Profitability:

Key Ratios:

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