ADANI WILMAR

Pan-India leader in edible oils

Adani Wilmar is one of the few large FMCG food companies in India to offer most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses and sugar. Its products are offered under a diverse range of brands across a broad price spectrum and cater to different customer groups. Since its inception in 1999, it has carved a niche for itself in the Indian edible oil industry.

The company has made rapid strides on the financial front. During the last 9 years, its sales turnover has expanded from Rs 14,780 crore in fiscal 2014 to Rs 49,243 crore in fiscal 2024, with operating profit shooting up from Rs 228 crore to Rs 1,150 crore and net profit taking a high jump from Rs 278 crore. What is more, prospects for the company going ahead are all the more promising. Consider:

• The company has established India’s No. 1 edible oil brand ‘Fortune’ and its brand equity is now being leveraged to expand into other staples like Basmati rice, pulses, ‘besan’, etc. Further, to cater to health-conscious Indians, the company has introduced value- added health oils like rice bran and Vivo. Its edible oil brand ‘Rupchanda’ is the market leader in Bangladesh, where it owns and operates two large refineries. Apart from edible oils, the company has a leadership position in the castor oil, oleo chemicals and speciality fats business in India.
• The company continues to demonstrate strong sales performance, delivering substantial volume growth in both edible oils and foods businesses during the June 2025 quarter. It achieved revenues of Rs 14,169 crore in Q1FY25, driven by 12% YoY volume growth. Both the Edible oils and Food segments delivered strong double-digit volume growth of 12% YoY and 42% YoY respectively, aided by growth in packaged staple food.
• Strong business momentum has led to increased marketshare in key product categories. In edible oils, ROCP (refined oil consumer pack) marketshare of AWL increased by 60 bps YoY to 19.0% on a moving annual total (MAT) basis, whereas in wheat flour, marketshare increased by 90 bps YoY to 5.9%. Additionally, the branded exports volume has surged by 36% YoY.

STRONG PROFITS

• With stable edible oil prices, the company has posted strong profits over the last three quarters. For Q1FY25, it delivered its highest-ever EBITDA at Rs 619 crore and PAT of Rs 313 crore. The stability in edible oil prices augurs well for its business, allowing it to deliver strong profits over the past three quarters. In Q1FY25, it achieved the highest-ever EBITDA of Rs 619 crore, a 375% increase YoY, and PAT of Rs 313 crore against a loss of Rs 79 crore.

FMCG DEMERGER

• Adani Enterprises (AEL) approved demerger of the food FMCG business to the company along with AEL’s strategic investment in Adani Commodities LLP. The food FMCG business has become self-sustained, performing well, and is poised for further growth under Adani Wilmar. The foods unit includes the trading and supply of edible oil & allied commodities, investments in Adani Commodities, and other assets and liabilities associated with the business. The move will help the promoters -- Adani Commodities and Lence (belonging to Wilmar) -- of Adani Wilmar to bring down their stake in the company to 77% from 88%. In FY 2025, we expect the company to register EPS of Rs 8.5, which is likely to rise to Rs 12.7 in FY 2026. In FY 2027, it can register EPS of Rs 16.6. The scrip trades at Rs 383. P/E on FY 2027 EPS works out to 23.1.

PERFORMANCE INDICATORS (Rs. in crore)

ANDHRA PETROCHEMICALS

Niche producer of oxo-alcohols

Andhra Petrochemicals (APL) is an India-based manufacturer of oxo-alcohols, including 2-Ethyl Hexanol, Normal Butanol (NBA) and Iso Butanol (IBA). 2- Ethyl Hexanol (2-EH) is a clear, high-boiling point and lowvolatility solvent, uniform, non-toxic liquid with a characteristic odour, insoluble in water but soluble in organic solvent. It is obtained indirectly in oxo synthesis from propylene (C3H6) and synthesis gas (CO+H2). NBA is a clear liquid with a characteristic odour, miscible in all common solvents. NBA is produced in oxo synthesis of propylene (C3H6) and synthesis gas (H2+CO). IBA is a clear liquid with a characteristic odour. IBA is miscible with all common solvents. IBA is obtained in oxo synthesis of propylene (C3H6) and synthesis gas (H2+CO). The company has its manufacturing facilities opposite the Naval Dockyard in Visakhapatnam.

The company, promoted by ASL, was incorporated on April 18, 1984. At present, APL and BPCL are the two producers of oxo-alcohols in India. APL has a manufacturing capacity of 73,000 tonnes per annum (tpa). The product mix includes 2EH, NBA and isobutanol (IBA). Oxo-alcohol is primarily used as a raw material to manufacture PVC plasticisers. It commenced operations from February 1994. APL’s factory is located adjacent to HPCL’s Visakhapatnam refinery, with which it has entered into a long-term contract for the procurement of propylene, the key raw material in the manufacturing process.

APL’s products are mainly used by domestic manufacturers of di-octyle phthalate (DOP), which is used as a plasticiser to manufacture polyvinyl chloride (PVC). The longterm demand potential for PVC in India remains favourable. user industries of oxo-alcohols are acrylates, acetates, chemical intermediates, and plasticize

Oxo-alcohols are liquid in nature. They can be used in the production of plasticizers (DOP, TOTM and DOTP), in paints and coatings, and in the production of nutyl acrylate, butyl acetate and butyl glycols ethers.

GROWTH BOOMS

In the March 2024 quarter, sales jumped 71% to Rs 278.46 crore. OPM soared 1,560 basis points to 20.9%, which took OP up 574% to Rs 58.31 crore. Other income grew 13% to Rs 6.74 crore and the interest cost remained unchanged at Rs 2.17 crore. After providing for depreciation (down 8% to Rs 3.70 crore), PAT rocketed 605% to Rs 59.18 crore. Provision for taxation too jumped 543% to Rs 15.26 crore after which PAT ballooned 629% to Rs 43.92 crore.

In FY 2024, sales jumped 22% to Rs 788.67 crore. OPM soared 560 basis points to 10.7%, which took OP up 143% to Rs 84.26 crore. Other income grew 36% to Rs 25.42 crore and interest cost remained almost unchanged at Rs 8.68 crore. After providing for depreciation (down 4% to Rs 14.83 crore), PBT rocketed 194% to Rs 86.17 crore. Provision for taxation too jumped 211% to Rs 63.49 crore, after which PAT ballooned 211% to Rs 63.49 crore.

The estimated demand of oxo-alcohols is about 3,30,000 mt per annum, and is growing at a healthy rate of 8-10% per annum. The company, with its existing capacity of 80,000 mtpa, is well-placed, though competition exists from indigenous manufacturers and imports. As such, there are no constraints in the company’s production capability subject to HPCL’s ability to meet the full propylene requirement of the company. The sales realization is also expected to improve in view of the policies of the Central government and the forecast of better Indian GDP growth. In FY 2025, we expect the company to register EPS of Rs 14.2, which is likely to rise to Rs 21.3 in FY 2026. The scrip trades at Rs 107. P/E on FY 2026 EPS works out to 5.0.

PERFORMANCE INDICATORS (Rs. in crore)