Adani Wilmar Limited (AWL) records double digit volume growth in FY’23

Adani Wilmar Limited (AWL) has recorded double digit volume growth in FY’23, led by their food and oleochemicals businesses. According to a release by the company, AWL in Q4 ’23, recorded 15% volume growth. Consolidated revenue of the company witnessed a decline of 7% to Rs 13,73 crore caused by edible oil price drops in FY ’23.

The company in a statement shared that it has "...recorded 14% growth in volume and 7% growth in revenue. The revenue for the year stood at  Rs 58,185 crore; PAT (profit after tax) at Rs 582 crore. The company crossed 5mn metric tonnes of sales during FY’23. The  food segment doubled its revenue in 2 years to close the year at around Rs 4,000 crore." 

Both wheat flour and rice businesses crossed Rs 1,000 cr. in revenue in FY’23 In edible oil, branded segment, with  around 75% saliency, grew by  around 8% YoY in FY’23. The overall segment volume grew by 3% YoY during the year.

Oleochemicals volume grew by 20% in FY’23 AWL continued to be the highest exporter of castor oil from India in FY’23 AWL stock has been included in NIFTY Next 50 Index from March 31, 2023. "Adani Wilmar continued its growth story with year-on-year volume growth of 14% in FY23 at consolidated level, which enabled it to achieve over Rs 58,000 crore of revenue for the year. The company has crossed the milestone of 5mn metric tonnes of sales in FY’23, enabled by scaling up of select products, having a large addressable market, across the country. During the year, the company made good progress and has been gaining market share across food products. It closed the financial year 2023 with around Rs 4,000 crore of revenue in Food & FMCG segment, registering a strong growth of 39% YoY in volumes and 55% YoY in revenue terms, while seeding multiple new avenues of growth during the year," a company release said.

It further added: "Q4 FY23 H1’23 witnessed multiple macro events causing high volatility in edible oil prices, with record high prices in Q1 and subsequent crash of prices in Q2. In H2’23, prices have been gradually declining reaching lower levels, and leading to better demand trends in the second half of the year. Food prices also witnessed high inflation in H1, which started cooling off in the second half."

 

Reasons cited for impact of Q4 profitability:

• TRQ disparity led to pressure on Soyabean oil margins
• Decline in edible oil prices continued in Q4 as well leading to high-cost inventory, along with the MTM impact in P&L. The impact was restricted to a large extent by the Company’s robust risk management processes
• Inflation on costs: Impact of inflation on the packaging cost at gross profit level and inflation in logistics, chemicals, and power and fuel costs at the EBITDA level.
• Finance cost: Interest expenses went up with the increase in the benchmark rates on the back of hike in the Fed rates ▪ Base effect: In the base quarter, Q4’22, the company got better margins in Sunflower and other soft oils due to the bullishness in market after start of the Ukraine conflict
• Bangladesh: Wholly owned subsidiary in Bangladesh made a loss of Rs 12 crore in Q4 and Rs 63 crore in FY’23, due to price caps by the government on edible oils, local currency-related issues, and unavailability of counter party for forex hedging. This has resulted in lower consolidated PAT, compared to the standalone PAT.

Commenting on the results, Angshu Mallick, MD & CEO, Adani Wilmar Limited said: “A large market opportunity in India is translating well into our growth numbers. We have almost doubled our Food & FMCG revenues in 2 years and recorded over Rs 4,000 crore worth revenue in the segment. We are investing in the business to support our growth. Our margins during the quarter and full year got impacted by high-cost inventory in a falling edible oil price environment, inflation impact on our operational costs and an increase in interest costs due to rate hikes."