Adani Wilmar tanks 4% after Q2 business update. Here's what Adani group firm says

Shares of Adani Wilmar tanked nearly 4 per cent in Thursday's trade after the edible oil major said its overall revenue in the July-September quarter would grow by low single-digit annually amid a fall in rates of edible oils.

Adani Wilmar said prices of edible oils, namely palm oil, soyabean oil and sunflower, declined sharply in the September quarter and are now trending more or less at pre-Covid levels.

"We saw the prices of palm oil and soyabean oil drop sharply from the highs of $1,750 and $1,850 in June to $850 and $1,100 a tonne by the end of September 2022," the company said adding that it passed on the benefit of lower prices to customers in a bid to protect market share.

This coupled with currency depreciation will have impact on margins for this quarter,  Adani Wilmar said.

Following the business update, shares of Adani Wilmar declined 3.87 per cent to hit a low of Rs 681 on BSE.

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In a filing to exchanges, post market hours, Adani Wilmar said its Food & FMCG basket continued its growth trajectory similar to previous quarters, registering a growth over 40 per cent, thanks to the pan-India distribution of edible oil business.

Edible oil business, it said, witnessed higher volume growth in the masstige category rather than premium category as a result of downtrading that continued during the quarter.

"Industry Essential business also grew close to 20% during the quarter and H1 both. Business remained positive on growth trajectory riding on Food & FMCG and Oleo," the Adani group stock said.

Adani Wilmar markets its edible oils and other food items under the Fortune brand.

"Multiple macro challenges continued to impact the business in the quarter gone by owing to domestic and global cues, continued geo-political standoff, rising interest rates, slow uptick in the rural demand and delayed withdrawal of monsoon in major parts of India," it said.

Adani Wilmar, however, added that it is witnessing some positive signs of recovery, with softening of commodity prices and higher foodgrain production estimates for the last crop year. In edible oil segment, the second quarter essentially absorbed the market shocks of high inflation followed by sharp decline in prices, it said.