Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adani Wilmar Ltd (BOM:543458, Financial) reported a significant 31% year-on-year growth in revenue for Q3 FY '25, reaching INR16,859 crores.
- The company achieved a remarkable 57% growth in EBITDA and over 105% growth in PAT compared to the same quarter last year.
- The Edible Oil segment registered healthy volume growth and delivered a segment profit of INR571 crores for the quarter.
- The company has successfully expanded its distribution network, now reaching over 2.1 million outlets, with a strong focus on rural areas.
- Adani Wilmar Ltd (BOM:543458) is making strategic investments in its Food & FMCG business, with a new integrated facility in Gohana expected to enhance production and efficiency.
Negative Points
- The Food & FMCG segment reported a segment loss of INR46 crores for the quarter, primarily due to inventory valuation losses in rice.
- The Industry Essentials segment experienced a volume decline of 3% for the quarter, attributed to lower edible oils business.
- The company faced challenges in the branded Basmati rice market, with a decrease in market share from 7.4% to 6.1%.
- Adani Wilmar Ltd (BOM:543458) experienced a 20 basis point drop in overall market share in the Edible Oil segment.
- The company is dealing with high palm oil prices, which have impacted consumer demand and led to a cautious outlook on volume growth in the Edible Oil segment.
Q & A Highlights
Q: Could you discuss the competitive intensity and pricing pressure in the soya nuggets segment, especially with competition from Marico Saffola? Also, what are your thoughts on the organized market share for Sattu?
A: Angshu Mallick, CEO, explained that post-COVID, there has been an increase in plant protein sales, with soya nuggets being a significant part due to their high protein content. Adani Wilmar has invested in advanced technology and logistics to maintain a competitive edge. While competition exists, it is seen as a healthy market expansion opportunity. Regarding Sattu, it is a seasonal product with potential for growth, particularly in Eastern India.
Q: How do you plan to regain market share in the branded Basmati rice segment, given the inventory losses and supply chain issues?
A: Angshu Mallick, CEO, stated that the new Gohana plant will help consolidate production and improve logistics, addressing previous challenges. This facility will enhance supply chain efficiency, allowing the company to focus on brand building and distribution, particularly in e-commerce and modern trade channels, which are significant for branded Basmati rice.
Q: What is your outlook on palm oil pricing and the potential impact of government duties?
A: Shrikant Kanhere, CFO, noted that palm oil pricing is influenced by geopolitical factors and biodiesel programs in Indonesia and Malaysia. While prices have moderated, they remain volatile. The government duty increase aims to support Indian farmers, and any changes will depend on balancing farmer and consumer interests.
Q: Can you explain the increase in employee costs and other expenses this quarter?
A: Shrikant Kanhere, CFO, clarified that the rise in employee costs is due to a one-time incentive provision, not ESOPs, which will impact future quarters. Other expenses increased due to derivative impacts and marketing provisions, which are expected to normalize.
Q: What are your volume growth aspirations for the Food & FMCG segment with new capacity coming online?
A: Angshu Mallick, CEO, expressed a target of 20%+ growth for Food & FMCG. The new Gohana facility will enhance volume, reduce costs, and improve efficiencies, supporting this growth. The company aims to be a top player in each category it enters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
