Adani Wilmar stock jumps as Q3 sales grow in high single digits

Fast-moving consumer goods company Adani Wilmar said its sales grew in high single digits in the third quarter, aided by strong volume growth across all segments due to the festive season and stronger out-of-home (OOH) consumption.

In its Q3 quarterly update, Adani Wilmar, a joint venture between Adani Group and Singapore's Wilmar Group, says its standalone volumes will grow in the high teens.

Shares of the edible oil maker jumped nearly 3% in the opening trade to ₹589 apiece on the National Stock Exchange (NSE).

The Adani group company says volume growth in its edible oil business was seen in high-single digits as edible oil prices witnessed lower volatility during the third quarter, compared to the previous quarter.

Packed oil sales grew strongly by high-double digits during the quarter, on the back of higher in-house as well as out-of-home consumption, the FMCG major says, adding that institutional demand was weak and declined during the quarter. "Fast moving nature of both edible oil and food products also allows us to quickly pass on the price changes to the customers," it says.

Adani Wilmar says it made good progress in all the segments leading to continued gain in market share across key product categories. "The large available opportunity in kitchen essentials, combined with our approach of establishing efficient operations, is allowing us to drive a strong volume growth across categories at scale," the FMCG firm says.

Growth is also being driven by expansion of our distribution, increasing direct reach across urban and rural markets and execution excellence in alternate channels, it adds.

E-commerce, quick commerce, and eB2B among others continued to grow at a much faster rate, led by a shift by consumers to these alternative channels, increased physical reach of these channels and strong execution in collaborating with channel partners to drive sales, the maker of Fortune rice says.

Growth has been broad-based across both urban and rural towns, with higher saliency in the urban markets, the company says.

Adani Wilmar says its food business continues to grow at a very strong rate, driven by increasing penetration and its wide-spread distribution network of edible oils across India.

"In Rice business, we took several targeted actions across multiple customer segments and witnessing good results, which was well supported by increase in our manufacturing capacity (both own and leased)," says the FMCG firm.

The company announced the acquisition of Kohinoor rice brand in May 2022 to further strengthen its food portfolio.

"Wheat flour category grew strongly driven by increase in retail outlet reach, high-paced growth in alternative channels, focused branding and strong on-ground execution," the company says, adding it commissioned a new wheat flour unit at its existing plant in Bundi, Rajasthan.

"Recognizing the large opportunity available in HoReCa (Hotels, Restaurants, Caterers) segment and our capability to serve them with our wide-ranged product basket of kitchen essentials, we will further develop our operating model to drive sales in this customer segment," it adds.