Updated January 31st, 2024 at 16:35 IST
Adani Wilmar Q3 profit dips to Rs 201 crore amid weak demand and low edible oil prices
Adani Wilmar faced weakened sales value due to lower prices, marking a reversal from two consecutive quarters of losses before this quarter's return to profit.
Adani Wilmar Q3: Fast-moving consumer goods (FMCG) major Adani Wilmar posted an 18.4 per cent decline in third-quarter profit on Wednesday. The dip was attributed to weak demand in its edible oil segment and a decrease in product prices. For the quarter ending December 31, Adani Wilmar's consolidated net profit fell to Rs 201 crore down from Rs 246 crore in the same period a year earlier.
Subdued demand from institutional clients in the edible oil segment, coupled with lower pricing, contributed to the downturn in third-quarter earnings. While the quarter started with healthy sales volume, particularly during the festive and wedding season, sales slowed post-Diwali.
Sales volume for the edible oil segment, constituting 61 per cent of the total mix, remained flat, with a 21 per cent decline in sales value during the quarter. This resulted in a 17 per cent fall in consolidated revenue from operations, amounting to 128.28 billion rupees. Notably, revenue from the edible oil segment saw a significant 22.8 per cent decline.
Adani Wilmar faced weakened sales value due to lower prices, marking a reversal from two consecutive quarters of losses before this quarter's return to profit. However, the company experienced a nearly 25 per cent growth in revenue from its food and FMCG segment, driven by strong penetration of its wheat business in South India. Improved volume offtake and demand from retailers in the region contributed to this growth.
Total expenses for Adani Wilmar fell nearly 17 per cent, with around a 14 per cent dip in input costs, aligning with the lower pricing for edible oil and cheaper raw material costs.
In December, the Adani Group announced that a decision regarding the divestment of its stake in Adani Wilmar would be made in the next three months.
Rival Marico, known for the Saffola brand of cooking oils, reported a better-than-expected third-quarter profit, leveraging declining raw material costs to offset a drop in revenue. Adani Wilmar shares initially rose more than 1 per cent after the results but later traded 0.2 per cent higher, reflecting the dynamic nature of market sentiments.
(With Reuters inputs.)
Published January 31st, 2024 at 16:35 IST