Adani Wilmar, the FMCG arm of Adani Group, witnessed a 4% fall in its shares as the company's quarterly profits dropped by 60%. Read on to know more about the reasons behind this decline and the company's performance in FY23

Shares of Adani Group’s FMCG arm fell well over 4% in today’s session after the company reported a staggering 60% decline in quarterly profits due to a variety of reasons like inflation, higher finance costs, etc.

For the quarter ended in March 2023, revenues of the company declined 7% to Rs 13,873 crores. Edible oils continued to be the company’s highest-selling product and the highest contributing segment as revenues from the same stood at Rs 10,790 crores, down 13%. Quarterly EBITDA was Rs 359 crores, down 16%, while quarterly profit declined 60% to Rs 94 crores.

For FY23, the company’s revenues registered a growth of 7% as total revenues stood at Rs 58,185 crores. Sales from edible oils grew 3% to Rs 46,104 crores as it accounted for almost 80% of all revenues. Food and FMCG, however, had the highest growth during the year as its volumes improved by 39% while revenues from the segment improved by 55%.

Overall, the company’s volumes saw a growth of 14% while overall sales volume exceeded 5 million metric tonnes during the year. The company’s oleochemicals production improved by 20% as it continued to be the highest exporter of castor oil in India. The company has also been using alternate channels such as E-commerce, Modern Trade and e-B2B serving GT, which saw a growth of 23% as these channels contributed Rs 2,700 crores towards revenues.

EBITDA declined 6% to Rs 1,616 crores while annual profits declined from Rs 808 crores reported last year to Rs 607 crores, down 24%. According to the company, higher inflation and surge in base rates due to rate hikes resulted in higher costs. Tariff Quota disparity pressured the company’s soybean margins.

Moreover, the company has a subsidiary in Bangladesh which made a loss of INR 122 crores in Q4FY23 and a total loss of INR 63 crores in FY23 due to price caps imposed by the Bangladeshi government and local currency issues. This resulted in a lower consolidated PAT in comparison to the standalone PAT.
Shares of Adani Wilmar declined over 4% today due to its disappointing results as the stock closed at Rs 397.45 per share, down 4.33%.

- Aman Agarwal

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