Packaged food major Adani Wilmar expects rural consumption to see stronger uptick in the coming months on the back of good monsoon and harvest. The company said it recorded strong volume growth in Q2 in both food and edible oil businesses due to focus on ramping up distribution and stable edible oil prices during this period.

However, it noted, that recent hike in import duty and increase in international prices of edible oils expected to have some adverse impact on consumption in the December quarter.

Speaking on rural consumption trends, Angshu Mallick, MD & CEO, Adani Wilmar Ltd told businessline, ”I am very positive that October onwards we will see better days for rural India. Good monsoon shows its impact only after the harvest when money goes into rural consumers’ hands. Hence, we will see the outcome of good monsoon in the coming quarter.”

The company reported a consolidated net profit of ₹311.02 crore in Q2FY25 on the back of higher income against net loss of ₹130.73 crore in the year-ago period. Revenue was up 18 per cent year-on-year at ₹14,460 crore with an underlying volume growth of 12 per cent year-on-year. The edible oil segment underlying volume growth was at 17 per cent y-o-y, while the food and FMCG segment’s underlying volume growth was at 33 per cent year-on-year.

Distribution push

Responding to a query on the factors that helped in strong growth, Mallick said, “Over the last two years, we have been consistently ramping up our direct and indirect distribution across urban and rural regions. Also, edible oil prices were stable in July-September period which augured well for this portfolio.” He added that in the wheat flour space the company has been ramping up distribution especially in regions such as South India. The company also saw double-digit growth in segments of pulses, besan and soya chunks during this period.

Mallick noted that hike in import duty and increase in international prices led to effective impact to the tune of 25-30 per cent in terms of higher costs for edible oil players. “This kind of an increase is a matter of concern that too coming in the festival season. Due to festivals and wedding season the consumption story will be there but it will take a bit of beating because of higher edible oil prices,” he added. He said that the company will be increasing prices gradually and will not do it in one go.

On the FMCG industry witnessing stress in urban consumption, Mallick said that the company has not been adversely affected as it sells essential products. “Along with Fortune, we also have our mass brand Kings. This allows us to play a two brand strategy at different price points to keep consumers in our basket,” he added.

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