Adani Wilmar to invest Rs 600 crore to expand edible oil business, solar power capacities

New Delhi: Adani Wilmar Ltd plans to invest around Rs 600 crore this fiscal mainly to expand its processing capacities of edible oil business and will launch more food products for consumers as well as institutional buyers to achieve higher growth in volume terms, its MD & CEO Angshu Malick said on Tuesday.

This is over and above the ongoing expansion programmes of around Rs 3,400 crore to add capacities across businesses.

Adani Wilmar, an equal joint venture between Adani Group and Singapore's Wilmar, also said that promoters need to bring down their stakes in the company to 75 per cent by February next year from the current 88 per cent to meet SEBI's minimum public shareholding norm of 25 per cent. The current market cap is Rs 45,794 crore.

The Ahmedabad-based company is into edible oil, food & FMCG and industry essentials businesses. The company sells most of its products under the 'Fortune' brand.

On Monday, Adani Wilmar reported a consolidated net profit of Rs 313.20 crore for the first quarter of this fiscal against a net loss of Rs 78.92 crore in the year-ago period.

The total income rose to Rs 14,229.87 crore during the April-June period this fiscal from Rs 12,994.18 crore in the corresponding period of the previous year.

In an interview with PTI, Mallick highlighted the performance of the company during the first quarter of 2024-25.

"The June quarter was good for us. We achieved 12 per cent volume growth and 10 per cent value growth. In edible oil which is the main business, we achieved one million tonnes business, growing 12 per cent in volume terms," he said.

The food and FMCG business grew by around 40 per cent in both volume and value terms, he said, the volume growth was 19 per cent if the exports of rice on government-to-government basis were excluded.

Industry essentials business remained flat during the first quarter, Mallick said.

Mallick noted that prices of edible oils remained stable during the June quarter, which he said was a "saviour" in a high inflationary market. "Cooking oils constitute 40-45 per cent of the grocery basket of the consumer".

The MD & CEO said the sales of edible oils to B2B (business to businesses) or institutional buyers were strong.

Asked about the guidance for the full 2024-25 fiscal, Mallick said the monsoon would play a key role in achieving higher growth. "Good monsoon rains with better distribution will lead to a good harvest of Kharif (summer-sown) crops and boost the overall rural income." The company is also expecting good sales of edible oils and other food products in the second half of the fiscal because of the long marriage season that will start from November onwards, he said.

On expansion plans, Mallick said the company would complete the ongoing capital expenditure programmes of Rs 2,200 crore this fiscal. The capex of Rs 1,200 crore launched last fiscal would be completed by March 2026.

Further, Adani Wilmar Chief Financial Officer (CFO) Shrikant Kanhere said the company plans to start a fresh capex programme of Rs 500-600 crore to expand processing capacities of oilseeds like sunflower and cottonseeds and also augment the solar generation capacities of solar power to 15 MW from 8 MW. Some amount will also go towards maintenance of existing plants.

The company also will launch new speciality products for institutional buyers and items like noodles and paasta for consumers.

During the April-June quarter, Adani Wilmar's revenue from the edible oil business grew 8 per cent to Rs 10,649 crore in April-June of this fiscal from Rs 9,845 crore in the year-ago period.

Food and FMCG business revenue rose 40 per cent to Rs 1,533 crore from Rs 1,097 crore. The revenue of the industry essentials segment was flat at Rs 1,986 crore.

Adani Wilmar's share price closed at Rs 352.35 apiece on the BSE, up 2.31 per cent from Monday closing price.