Adani Wilmar Faces Sales Decline as Edible Oil Prices Plummet, but Sees Strong Volume Growth in Q1

 Adani Wilmar, a leading company in the edible oil industry, reported a 15% decline in sales for the first quarter of the year. The drop in sales can be primarily attributed to the sharp fall in edible oil prices, which overshadowed the strong demand for the company's food products. The decrease in prices has been a trend since last year, as lower consumer demand in developed economies, along with increased oilseed production and supply in the Black Sea region, have put downward pressure on prices.

Despite the decline in sales value, Adani Wilmar witnessed double-digit growth in terms of volume, with a remarkable 25% year-on-year increase. This growth can be attributed to the robust consumer demand for the company's products. In particular, the sale of branded products in both edible oils and foods performed exceptionally well, outpacing the overall sales of their respective segments.

Adani Wilmar explained that while the volume growth remained strong, the decline in sales value on a year-on-year basis was a direct result of the significant decrease in edible oil prices. The company acknowledged the impact of this price decline on their financial performance during the quarter.

On a positive note, Adani Wilmar's food and fast-moving consumer goods segment experienced substantial growth of 30% in sales. This segment surpassed ₹1,000 crore in revenue for the quarter, marking a significant milestone. Notably, this growth represents the eighth consecutive quarter in which the food and FMCG segment achieved over 20% volume growth and over 30% revenue growth on a year-on-year basis.

Within the edible oil business, Adani Wilmar recorded a robust 25% year-on-year increase in volume during the quarter. This growth was driven by sustained consumer demand and the comparatively weak performance in the same quarter of the previous year. The company highlighted that the demand in the base quarter had been disrupted by high edible oil prices, which were influenced by the Russia-Ukraine conflict. Additionally, the volume growth in the first quarter of the current year showed a strong sequential improvement compared to the preceding quarter (Q4'23).

While Adani Wilmar faced challenges due to the decline in edible oil prices, they remain optimistic about their strong volume growth and the consistent performance of their food and FMCG segment. The company's focus on delivering high-quality products and meeting consumer demands has positioned them well in the market, despite the price volatility within the edible oil industry.