Adani Wilmar to invest ₹600 crore to expand edible oil business, solar power capacity
Adani Wilmar Ltd plans to invest ₹600 crore to expand edible oil processing capacities and launch new food products, aiming for higher growth in volume terms. The company reported a net profit of ₹313.20 crore for Q1 FY25, up from a net loss of ₹78.92 crore in Q1 FY24. Revenue rose 10% to ₹14,229.87 crore, driven by 12% volume growth in edible oil and 40% growth in food & FMCG business.
Adani Wilmar Ltd plans to invest around ₹600 crore this fiscal mainly to expand its processing capacities of edible oil business and will launch more food products for consumers as well as institutional buyers to achieve higher growth in volume terms, its MD & CEO Angshu Malick said on Tuesday.
This is over and above the ongoing expansion programmes of around ₹3,400 crore to add capacities across businesses.
Adani Wilmar, an equal joint venture between Adani Group and Singapore’s Wilmar, also said that promoters need to bring down their stakes in the company to 75 per cent by February next year from the current 88 per cent to meet SEBI’s minimum public shareholding norm of 25 per cent. The current market cap is ₹45,794 crore.
The Ahmedabad-based company is into edible oil, food & FMCG and industry essentials businesses. The company sells most of its products under the ‘Fortune’ brand.
On Monday, Adani Wilmar reported a consolidated net profit of ₹313.20 crore for the first quarter of this fiscal against a net loss of ₹78.92 crore in the year-ago period.
The total income rose to ₹14,229.87 crore during the April-June period this fiscal from ₹12,994.18 crore in the corresponding period of the previous year.
In an interview with PTI, Mallick highlighted the performance of the company during the first quarter of 2024-25.
“The June quarter was good for us. We achieved 12 per cent volume growth and 10 per cent value growth. In edible oil which is the main business, we achieved one million tonnes business, growing 12 per cent in volume terms,” he said.
The food and FMCG business grew by around 40 per cent in both volume and value terms, he said, the volume growth was 19 per cent if the exports of rice on government-to-government basis were excluded.
Industry essentials business remained flat during the first quarter, Mallick said.
Mallick noted that prices of edible oils remained stable during the June quarter, which he said was a “saviour” in a high inflationary market. “Cooking oils constitute 40-45 per cent of the grocery basket of the consumer”.
The MD & CEO said the sales of edible oils to B2B (business to businesses) or institutional buyers were strong.
Asked about the guidance for the full 2024-25 fiscal, Mallick said the monsoon would play a key role in achieving higher growth. “Good monsoon rains with better distribution will lead to a good harvest of Kharif (summer-sown) crops and boost the overall rural income.”
The company is also expecting good sales of edible oils and other food products in the second half of the fiscal because of the long marriage season that will start from November onwards, he said.
On expansion plans, Mallick said the company would complete the ongoing capital expenditure programmes of ₹2,200 crore this fiscal. The capex of ₹1,200 crore launched last fiscal would be completed by March 2026.
Further, Adani Wilmar Chief Financial Officer (CFO) Shrikant Kanhere said the company plans to start a fresh capex programme of ₹500-600 crore to expand processing capacities of oilseeds like sunflower and cottonseeds and also augment the solar generation capacities of solar power to 15 MW from 8 MW. Some amount will also go towards maintenance of existing plants.
The company also will launch new speciality products for institutional buyers and items like noodles and pasta for consumers.
During the April-June quarter, Adani Wilmar’s revenue from the edible oil business grew 8 per cent to ₹10,649 crore in April-June of this fiscal from ₹9,845 crore in the year-ago period.
Food and FMCG business revenue rose 40 per cent to ₹1,533 crore from ₹1,097 crore. The revenue of the industry essentials segment was flat at ₹1,986 crore.
Adani Wilmar’s share price closed at ₹352.35 apiece on the BSE, up 2.31 per cent from Monday closing price.
