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Adani Wilmar Q1 FY25 Earnings Call Summary
Submission Details • Date of Submission: August 6, 2024 • Earnings Call Date: July 30, 2024 • Addressed to: BSE Limited and National Stock Exchange of India • Signed by: Company Secretary Darshil Lakhia • Hosted by: ICICI Securities • Key Management Present: • CEO Angshu Mallick • CFO Shrikant Kanhere • COO Saumin Sheth
Financial Performance Highlights • Sales Volume Growth: 12% YoY, reaching 1.66 million tons • Standalone Revenue: Increased by 11% to ₹14,169 crore • EBITDA: Surged to ₹609 crore, improved margins due to resolved hedge dis-alignment • Edible Oils Segment: 12% volume growth, record profits of ₹398 crore • Food and FMCG Segment: 40% revenue increase, strong demand and market share gains • Distribution Network: Expanded to 2.1 million outlets • ESG Initiatives: Included in FTSE4 Good Index Series
Q&A Session Insights • EBITDA Margin Inquiry: Clarified as normal business profits, optimistic about stability • Competitive Pressures: Acknowledged from new players like Amul; focus on staple products • Premium Edible Oil Market: Introducing new premium products; focusing on consumer and B2B strategies • Impact of Market Leader's Actions: Palm oil supply chain remains stable • Food and FMCG Profit Decline: Lower margins due to government orders and increased promotional investments
Strategic Focus Areas • Distribution and Advertising Investments: Targeting a basket size of 1.25 million tonnes • Government Export Model: Adjustments due to rice export restrictions • Market Share in Wheat Flour: Gaining due to effective marketing strategies • Rural Distribution Plans: Targeting 50,000 direct reach outlets by March 2025
Competitive Landscape • Local Competition: Strong in edible oil and food segments; Adani Wilmar focuses on quality and distribution • Rice Production: Over 200,000 metric tonnes in FY24, with significant exports • Sunflower Oil Market Share: Increased from 10.1% to 11.3%
Industrial Essentials Performance • Oleochemicals and Castor Oil: Strong growth; plans for value addition • Oil Mill Segment Decline: Experienced a 22% decline, overall 7% decrease in industrial essentials • Export Opportunities: Exploring further international markets for specialty chemicals
Market Outlook • Operations in Bangladesh: Recent improvements noted • Future Growth Confidence: Driven by stable oilseed prices and anticipated festive season demand
Conclusion • Positive Outlook: Confidence in future revenue and profit growth emphasized by CFO Kanhere.
Adani Wilmar Q4 FY24 Earnings Call Summary
Earnings Call Overview • Date: May 2, 2024 • Submitted transcript to BSE and NSE on May 9, 2024 • Hosted by ICICI Securities • Key management: CEO Angshu Mallick, CFO Shrikant Kanhere, COO Saumin Sheth • Included opening remarks and Q&A session
Key Achievements • Surpassed 6 million metric tons in volume • Food and FMCG contributed over 1 million metric tons, generating nearly INR 5,000 crore • HoReCa segment reached INR 400 crore • Kohinoor brand exceeded INR 350 crore in business • Edible oil branded sales grew by 15% year-on-year • Food and FMCG volumes increased by over 40% • Expanded distribution network to 7.2 lakh direct outlets, focusing on rural markets
Financial Performance • Q4 sales volume growth: 4% • Gross profit up: 10% • PAT increased by 60% year-on-year • Full year sales volume growth: 11% • PAT decreased by 54% due to earlier underperformance and market challenges • Recovery in profitability in H2 FY24 with improved gross profit and EBITDA • Edible oil segment grew by 10% for the year
Food Segment Improvements • EBITDA contribution of ₹170 crore on a turnover of ₹5,000 crore for FY24 • 3.5% EBITDA margin • Plans to expand rural distribution from 30,000 to 50,000 towns • E-commerce revenue contribution over ₹2,700 crore, increasing by 42% • Commitment to ESG initiatives, enhancing energy efficiency and sustainable sourcing
Q&A Highlights • Domestic business saw a 39% increase in volume; exports impacted by non-Basmati rice ban • Hedging losses discussed; expected return to previous EBITDA and profit margins • Mustard oil production expected to reach 120 lakh tons, a 10% increase • Government’s Atmanirbhar Oilseed mission benefits Adani Wilmar with a 15% market share • Focus on improving EBITDA margins in food and FMCG segment, projected to be double that of edible oils
Future Outlook • Anticipated 9-10% increase in edible oil volume next year • Positive profitability outlook for branded segment in edible oils • Challenges in Bangladesh joint venture noted, but improvements expected in FY‘25
Conclusion • Management expressed gratitude to participants and optimism about growth trajectory and market positioning.
Adani Wilmar Limited Q3 FY24 Earnings Call Summary
Overview • Date of earnings call: January 31, 2024 • Transcript submitted to BSE and NSE on February 6, 2024 • Moderated by Karan Bhuwania from ICICI Securities • Key executives present: CEO Angshu Mallick, CFO Shrikant Kanhere, COO Saumin Sheth
Key Highlights • Positive Turnaround: • Increased retail penetration to 2.1 million outlets • Market share growth from 19.5% to 19.8% • 16% year-over-year growth in edible oil sector • Over 40% growth in domestic food consumption in India
• Financial Performance: • Turnaround from loss to profit: Gross profits at INR 1,630 Crores, EBITDA at INR 530 Crores • Edible oil sales grew by 16% year-on-year; wheat flour sales surged over 45% • Sequential volume and revenue growth of 5%, but year-on-year revenues down by 17% due to lower raw material costs
• Market Expansion: • Distribution network expansion to 2.1 million outlets • Branded exports grew by over 80% in the first nine months • New product launches and marketing initiatives underway
Segment Performance • Edible Oil: • Quarter-over-quarter growth of 11% • Year-on-year growth remained flat • Packed oil increased by 16%
• Food and FMCG: • Robust 17% year-on-year growth • Food segment contributes 17-18% of overall volumes, with plans to increase to 25% by FY25
Challenges and Risks • Geopolitical Impact: • Supply chain disruptions due to Israel-Hamas conflict and Russia-Ukraine war • Container freight costs affecting rice exports
• Market Competition: • Concerns about flat volumes in the edible oil segment • Smaller players not gaining market share due to price reductions
Strategic Initiatives • Rice Acquisitions: • Expansion from 4-5 units to 13 across various states • Focus on building relationships with farmers and improving sourcing capabilities
• Brand Visibility: • Efforts to enhance advertising and brand recognition in the rice segment • Positive feedback on recent marketing campaigns
Future Outlook • Supply Chain and Market Share: • Robust supply chain with 93 depots and 10,000 distributors • Direct coverage increased from 475,000 to 660,000, aiming for 1 million
• Price Monitoring: • Close monitoring of mustard seed prices and preference for lower import duties to stabilize consumer prices
• Management's Optimism: • Encouragement to track company performance and express optimism for future growth.
Adani Wilmar Q2 FY2024 Earnings Call Summary
Earnings Call Overview • Date: November 1, 2023 • Transcript submitted to BSE and NSE on November 8, 2023 • Hosted by ICICI Securities with key personnel: CEO Angshu Mallick and CFO Shrikant Kanhere • Structure: Opening presentation followed by Q&A session
Company Performance • Challenges: • Ongoing issues from Q1, including hedge disalignment and soybean oil price disparities • Increased soybean oil imports leading to higher inventory levels • Impact of TRQ discontinuation and crisis in Bangladesh on competition and subsidiary performance
• Growth: • Overall volume increased by 11% in Q2 • Food FMCG grew by 19% and industry essentials by 25% • Aiming for food segment contribution to reach 30% in future
Market Position • Leading player in India's edible oil market with a 19.6% market share • Focus on enhancing presence in HoReCa channel and branded exports • New product launches, including a Biryani kit for export markets
Financial Performance • Losses: • Standalone net loss of 87 Crores in Q1 due to tax settlement, hedging losses, and rising interest rates • H1 2024 loss of 125 Crores compared to a profit of 232 Crores the previous year • Consolidated losses of 131 Crores, affected by ongoing losses in Bangladesh
• Revenue Trends: • 13% drop in edible oil revenue due to price corrections • Food FMCG segment revenue increased by 26% in Q2 and 27% in H1
Management Insights • Optimism for improved performance in Q3 and Q4 • Addressed concerns about weak EBITDA and low margins, attributing it to a one-time hedge disalignment • Expected EBITDA margins to stabilize at Rs. 3000 to Rs. 3500 per ton
Market Share and Strategy • Loss of market share in basmati rice due to promotional strategy shifts • Anticipated sales events to boost market share • Plans to expand export presence and growth in HoReCa segment
Future Outlook • Expected double-digit growth in H2 driven by increased demand • Stronger growth in rural markets compared to urban areas • Introduction of cold-pressed mustard oil planned
Product Mix • Edible oil contributes 58% of revenue, down from 65% two years ago • Food and FMCG segment has risen to 18% • 65% of branded sales from the premium Fortune brand
Conclusion • Management expressed confidence in maintaining growth despite competition • Encouraged continued engagement in future earnings calls
Adani Wilmar Limited Q1 FY 2024 Earnings Call Summary
Call Details • Date: August 2, 2023 • Hosted by: ICICI Securities • Key Management: • CEO: Angshu Mallick • CFO: Shrikant Kanhere • COO: Saumin Sheth • Transcript Submission: To BSE Limited and National Stock Exchange of India
Macroeconomic Challenges • Ongoing impacts from: • Ukraine war • High US inflation • Adverse weather affecting soybean yields in Argentina • Resulted in: • Volatility in edible oil prices (from $2,000 to below $1,000 per ton)
Company Performance • Distribution Network Expansion: • Direct reach to over 600,000 outlets • Rural coverage in over 22,000 towns • Market Share: • Edible oils: 19.5% • Rice: Declined from 7.9% to 5.9% • New Product Launches: • Whole wheat varieties • Cleaning agent for HoReCa sector
Financial Highlights • Revenue: 12% decline due to falling edible oil prices • Volume Growth: 25% increase across all segments • Gross Profit: Decreased by 21% due to high-priced inventory • Food Segment: Profits increased from INR 10 crores to INR 38 crores year-over-year • Outlook: Optimism for future quarters with better hedge alignment
Market Insights • Competitive Landscape: • Regional players growing but facing profitability issues • No significant new competition expected in Basmati rice market • Urban vs. Rural Markets: • 70% of edible oil business from urban areas • Rural markets showing 1% growth, with further growth anticipated post-monsoon
Consumer Behavior • Increased purchases of larger packs (5-liter and 15-liter) • Price stability leading to improved consumption during festival season
Future Projections • Volume Growth Expectations: • Edible oil: Normalizing to low double digits (12-15%) • Food segment: Projected growth close to 30% • Direct Reach Goal: Increase to 1 million outlets in three years
Conclusion • Management expressed optimism for future performance despite current challenges, focusing on leveraging existing brand strengths and distribution networks.
Adani Wilmar Limited Q4 FY 2023 Earnings Call Summary
Call Details • Date: May 3, 2023 • Submission Date: May 10, 2023 • Hosts: ICICI Securities • Participants: CEO Angshu Mallick, CFO Shrikant Kanhere, Moderator Manoj Menon • Format: Presentation followed by Q&A
Company Performance Overview • Edible Oil Market: • Significant price decline from $2,000 to under $1,000 per ton. • 15-16% volume growth in Q4, but 7% revenue decline due to price corrections. • 28% decrease in profit after tax for the full year due to various pressures.
• Food Segment Growth: • Strong performance with 39% volume and 55% value growth. • Optimism for future quarters due to growing demand and stabilized prices.
Insights from Angshu Mallick • Market Trends: • Current edible oil prices around USD 950, leading to a 28% increase in packed oil sales. • India's per capita consumption of edible oil is lower than neighboring countries, indicating growth potential. • Shift towards larger packaging sizes and increased rural consumption.
• Commodity Performance: • Wheat market saw 35-40% volume growth. • Rice segment experienced 40-45% growth in branded offerings. • Strong performance in besan and 18-19% growth in sugar sales.
• E-commerce Growth: • Increasing importance of e-commerce channel for sales.
Future Projections • Volume Growth: • Projected overall edible oil volume growth for FY '24 to exceed 8%. • Anticipated 15% decline in realizations year-over-year, but improved EBIT per metric ton expected.
Strategic Insights from Shrikant Kanhere • Price Stabilization: • Optimism about stabilizing prices and potential EBITDA margin consolidation. • Plans for capacity expansion and increased distribution in the food business.
• Market Position: • Starting FY '24 with reduced high inventory costs, leading to improved margins. • Strong national brand presence despite competition from private labels.
Closing Remarks • Outlook: • Positive outlook for India’s consumption growth. • Strong market position of Adani Wilmar emphasized. • Encouragement for Engagement: • Participants encouraged to review the presentation available online.
Earnings Call Overview • Date: February 8, 2023 • Submitted to: BSE Limited and National Stock Exchange of India on February 15, 2023 • Hosted by: ICICI Securities • Key Personnel: • CEO: Angshu Mallick • CFO: Shrikant Kanhere • COO: Saumin Sheth • Communication signed by: Darshil Lakhia, Company Secretary
Company Performance Highlights • Macroeconomic Context: • Stabilization of edible oil prices led to a decrease in CPI food inflation (from 7% in October to 4.2% in December). • Financial Growth: • Consolidated volume growth: 16% • Gross profit increase: 23% • PAT growth: 16% • Segment Performance: • Food volumes: 16% of total volumes • 73% of revenue from branded products (Fortune brand). • Challenges: • Loss of 47 Crore in Bangladesh operations due to currency crisis.
Mustard Oil Segment • Growth: • 50% year-on-year increase in volumes during Q3. • Market Leadership: • Plans for further expansion supported by government initiatives for mustard cultivation.
Food & FMCG Segment • Performance: • Contributed 16% to consolidated revenue with 26% volume growth, especially in wheat flour and rice. • Future Plans: • Enhance presence in the Maida market and leverage distribution network.
Sustainability Initiatives • Focus on: • Environmental practices • Responsible palm oil sourcing • Packaging recycling
Market Share and Growth Strategies • Market Share Increase: • From 17% to 19% due to improved rural distribution. • Focus Areas: • Expansion in South India and food products like Chakki fresh Atta.
Consumption and Revenue Insights • Clarifications on Growth: • Double-digit growth includes both in-home and out-of-home consumption. • Price Stabilization: • Edible oil prices around Rs.95 per kilo expected to boost consumption.
Financial Considerations • Revenue Growth: • Average realizations may decline, impacting overall revenue growth. • Interest Expenses: • Rising due to LIBOR and SOFR rates; stable in the near term with INR 3000 Crore in short-term borrowings.
Future Outlook • Growth Potential: • Confidence in Adani Wilmar's future as a leading FMCG and food player in India, focusing on basic food products.