Adani Wilmar swings into Rs 131-crore losses in Q2 as revenue declines over 13%

In its Q2 business update, Adani Wilmar reported strong double-digit volume growth as rural sales have seen an uptick.

Adani Wilmar skidded Rs 131 crore into the red in the quarter ended September 30 from Rs 49-crore profit a year back as revenues went down sharply in the last one year.

Adani Wilmar's revenue from operations fell 13.3 percent year-on-year to Rs 12,267.15 crore from Rs 14,150.03 crore. Although the total expenses were down to Rs 12,439.45 crore during the quarter, it was not enough to mitigate the losses.

The earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at Rs 144 crore, registering a fall of 43 percent year-on-year from Rs 254 crore last fiscal. The margin slipped 60 basis points to 1.2 percent from 1.8 percent last year.

The edible oil segment was hit by divergent trends in the spot

(physical prices) and future prices as edible oil prices fell up to six percent during the quarter. The food & FMCG segment saw revenues grow by 26 percent while the industry essentials business grew by 25 percent year-on-year.

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"Profitability was adversely impacted due to loss in the edible oil segment, which was partially offset by better margins in the food & FMCG and industry essential segments," said the company in a filing with the exchanges.

Going forward, given that the gap between spot & future prices has narrowed, Adani Wilmar said that it expects the profitability of edible oils to come back to normal levels in terms of Gross Margin and EBITDA per ton. Food & FMCG and industry essentials are expected to continue its profitability momentum.

Nine months after the US short-seller Hindenburg Research flagged an 85 percent downside in Adani shares, Adani Wilmar shares lost 47 percent to a 52-week low of Rs 303.1. In comparison, the blue-chip Nifty 50 index gave investors double-digit returns during the same period.

As of 12.50 pm, shares of the company are trading at Rs 320.40, lower by 2 percent on the BSE.

Adani Wilmar reported strong double-digit volume growth as rural sales have seen an uptick. However, in spite of growing volume, the value of sales declined on a year-on-year (YoY) basis.

For the second fiscal quarter in FY24, Adani Wilmar's edible oil segment saw a 5 percent volume growth over last year, but the value growth slipped 19 percent. In Q2, the segment contributed around 74 percent to the company’s standalone revenue.