Adani Wilmar Ramps Up Rural Distribution as Food and FMCG Business Gains Momentum

Adani Group's FMCG business Adani Wilmar swung back to profit in the first quarter of the financial year 2025. The company posted a consolidated profit of Rs 313 crore in Q1 FY25 as against a loss of Rs 78 crore in the same period in the last financial year.

The net sales of the firm increased to Rs 14,169 crore, a gain of 9.6 per cent compared to the first quarter of financial year 2024. Looking at individual segments, the company's edible oils business grew by 12 per cent year on year while the Food and FMCG segment grew by 42 per cent.

Speaking during the post-earnings conference call, the firm's chief financial officer Shrikant Kanhere said that the branded play of the company is intact and is seeing good growth. He said, "Branded products grew by 30 per cent year on year. The company is introducing several new products to gain from this momentum."

Also Read | Full Interview of Adani Wilmar MD and CEO Anghsu Mallick

Adani Wilmar CEO and MD, Angshu Mallick, said that the branded push isn't limited to consumers. He said, "We are also looking at B2B premiumisation opportunities like our flour being used for preparation of pizzas etc."

The volume growth of the company stood in double digits as sales volume grew by 12 per cent in the previous quarter. EBITDA has also normalised after it fell to Rs 122 crore in the first quarter of last year. In Q1 FY25, its EBITDA rose to Rs 609 crore. Kanhere said the company expects EBITDA to remain stable, although the risk of geopolitical conflicts remains.

Rural Push

The management emphasised the focus on increasing distribution and presence in rural India. The company is heavily investing in increasing the footprint of the food and FMCG business.

As per the data presented to investors after the announcement of Q1 results, the presence in rural towns has increased from 21,722 to 30,354 in the last year. The 40 per cent growth has also contributed to the company breaching the 21 lakh mark in total reach across the country.

Mallick said that the company has around 7.5 lakh direct outlets, of which 3.5 lakh are in rural towns. "We plan to add around 50,000 new outlets in the financial year," he said.

While the company increases its presence in rural towns, it also has to grapple with the fierce competition of regional and local brands. Mallick says that the edge in the competition with such brands is with the company now in the edible oils segment as it has regained pricing power.

"With prices of edible oils stable, the company has the pricing power to beat the local players. Regional brands don't give us much competition in the refined oil space. It's in mustard oil where we have to compete," Mallick said during the earnings call.

The company is aiming to increase profitability in the food and FMCG space as it has remained subdued due to expenditure on advertisements and expansion of the distribution network. Profit in the segment declined to Rs 31 crore in Q1 from Rs 42 crore in the last fiscal first quarter. With massive expansion across the country, the company hopes the food and FMCG business will also deliver good returns in the future.