BENGALURU (Reuters) – India’s Adani Wilmar said on Thursday its profitability for the quarter ended September 2023 remained under stress due to lower edible oil prices.
Edible oil prices fell by more than 50% over less than a year this August, potentially spurring more imports in a country that is set to start the 2023/24 marketing year with record inventories.
Adani Wilmar, which makes the Fortune brand of cooking oil, said sales volume for edible oils rose 5% year-over-year for the September quarter but the value declined 19% due to lower prices globally and local prices being pressured by imports.
“With the steep correction (in edible oil prices) over the last few quarters, the mix of… ‘Fortune’ has been gradually improving,” it said.
Sales value from edible oil constituted a hefty 74% of the company’s topline in the September quarter. Low edible oil prices also contributed to its swing to loss in the June quarter.
Sales volume for edible oil is “relatively better” in the second fiscal half owing to higher demand due to the festive season, the company said.
Adani Wilmar, a joint venture between Adani Enterprises and Wilmar International, sells a host of edible oil variants, including mustard, sunflower and soyabean.
The company, however, said its rural sales have been growing at a faster rate due to increased focus in distribution network.
Its comments come as a contrast to rival Saffola-parent Marico’s, which on Wednesday signalled a dip in quarterly revenue due to delayed recovery in rural demand.
Marico’s concerns about below-normal rainfall distribution were echoed by fast-moving consumer goods peer Godrej Consumer Products, which said it witnessed weak macros and adverse weather conditions during the quarter.
“At a consolidated level (organic), we expect to deliver mid-single digit volume growth,” Godrej Consumer Products said in a filing on Thursday.
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Dhanya Ann Thoppil and Janane Venkatraman)