India Equity Research Consumer Staples January 31, 2024

ADANI WILMAR
RESULT UPDATE

KEY DATA
Rating BUY
Second-best ever quarter
Sector relative Neutral
Price (INR) 357
12 month price target (INR) 480 Adani Wilmar (AWL) posted a strong set of numbers; clocking
52 Week High/Low
Market cap (INR bn/USD bn)
509/286
464/5.6
revenue/EBITDA of INR128.3bn/INR5bn. EBITDA margins of 3.9%
Free float (%) 9.2 came well ahead of our estimates. AWL reported PAT of ~INR2bn vis-
Avg. daily value traded (INR mn) 1,404.8
à-vis losses in Q1 and Q2. Overall volumes grew 5% YoY driven by Food
and FMCG/Industry essentials (each grew 17% YoY). Edible oil
SHAREHOLDING PATTERN volumes/value declined 2%/23% YoY vis-à-vis Saffola edible oil
Mar-23 Dec-22 Sep-22 volume/value decline by mid-single digit/26% for the same quarter.
Promoter 87.94% 87.94% 87.94%
FII 1.27% 1.57% 1.63%
Given softening inflation in H2FY24/FY25, and passing on of price
DII 0.11% 0.13% 0.09% benefits in edible oil, we cut our FY24E/25E/26E revenue by 8% each,
Pledge 0% 0% 0% which flows down to EBITDA cut of 45%/12%/3%, yielding a revised
SoTP based TP of INR480 (earlier INR515); retain ‘BUY’.
FINANCIALS (INR mn) A positive surprise after many quarters of pain
Year to March FY23A FY24E FY25E FY26E
What we like: Food and FMCG business is now contributing 17%/10% volumes/value
Revenue 5,81,848 5,15,763 5,65,344 6,02,437
EBITDA 16,610 7,736 19,674 23,073
to the business and clocked 17%/25% YoY volume/value growth in Q3FY24. It is a
Adjusted profit 5,821 331 9,561 11,755 positive sign as AWL’s strategy is to focus on positioning itself as a foods business.
Diluted EPS (INR) 4.5 0.3 7.4 9.0 Industry Essentials contributed 22%/14% to volumes/value and clocked 17% YoY
EPS growth (%) (27.6) (94.3) 2,787.2 22.9 volume growth in Q3FY24, led by robust growth in Castor and Oleochemical
RoAE (%) 7.4 0.4 11.0 12.1
businesses. In Q3FY24, AWL increased its direct reach by 30,000-plus outlets and
P/E (x) 79.7 1,401.6 48.5 39.5
EV/EBITDA (x) 27.0 58.5 23.0 19.3
added 1000-plus rural towns, implying AWL’s efforts on deepening its existing
Dividend yield (%) 0 0 0 0 penetration and expanding its distribution network. During the quarter, AWL’s
market share improved in edible oil/wheat to 19.8%/5.4%. Branded oil and foods
performed well on the back of strong demand from festive and wedding season.

CHANGE IN ESTIMATES What we do not like: Edible oil segment (~62% of mix) witnessed a volume/value
Revised estimates % Revision
decline of 2%/23% YoY on the back of destocking due to falling oil prices. Profitability
of Bangladesh subsidiary continued to be under stress due to local currency issues.
Year to March FY24E FY25E FY24E FY25E
During the quarter, AWL lost market share in rice by 170bp QoQ. Industry Essentials
Revenue 5,15,763 5,65,344 (8.0) (8.0)
segment clocked flat revenue growth during the quarter. Export ban on basmati and
EBITDA 7,736 19,674 (45.0) (2.9)
non-basmati rice continued during the quarter.
Adjusted profit 331 9,561 (93.4) (6.6)
Diluted EPS (INR) 0.3 7.4 (93.4) (6.6) Q3FY24 conference call highlights: In next one year, AWL is aiming to increase its
direct coverage to 1mn outlets. In edible oil, local players have not taken market
share since overall prices have come down making it more affordable. It has started
hiring agriculture graduates as trainees who will work with FPOs and farmers to bring
PRICE PERFORMANCE rice closer to key markets. AWL has almost 33% market share of steric acid and 11%
500 74,000 in soap noodles. In CY23, it has increased its direct reach from 0.5mn to 0.66mn. This
455 70,600 year the agriculture season was good in Argentina and Brazil. The Red Sea issue is
410 67,200
more on containers leading to increase in freight cost.
365 63,800
320 60,400
275 57,000
Financials
Jan-23 Apr-23 Jul-23 Oct-23 Year to March Q3FY24 Q3FY23 % Change Q2FY24 % Change
AWLTD IN EQUITY Sensex Net Revenue 1,28,284 1,54,381 (16.9) 1,22,672 4.6
EBITDA 5,042 6,052 (16.7) 1,437 250.9
Adjusted Profit 2,009 2,462 (18.4) ( 772) NM
Diluted EPS (INR) 1.5 1.9 (18.4) ( 0.6) NM

Abneesh Roy Rushabh Bhachawat Jainam Gosar

Abneesh.Roy@nuvama.com Rushabh.Bhachawat@nuvama.com Jainam.Gosar@nuvama.com

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 ADANI WILMAR

Financial Statements
Income Statement (INR mn) Balance Sheet (INR mn)
Year to March FY23A FY24E FY25E FY26E Year to March FY23A FY24E FY25E FY26E
Total operating income 5,81,848 5,15,763 5,65,344 6,02,437 Share capital 1,300 1,300 1,300 1,300
Gross profit 60,016 53,639 69,537 76,510 Reserves 80,358 80,689 90,250 1,02,004
Employee costs 3,938 4,642 4,353 4,639 Shareholders funds 81,658 81,989 91,549 1,03,304
Other expenses 20,268 21,146 24,027 25,905 Minority interest 0 0 0 0
EBITDA 16,610 7,736 19,674 23,073 Borrowings 22,257 22,057 21,857 21,657
Depreciation 3,585 4,029 4,702 5,196 Trade payables 85,383 73,433 77,427 82,131
Less: Interest expense 7,749 6,426 5,270 5,222 Other liabs & prov 13,185 13,185 13,185 13,185
Add: Other income 2,614 2,680 2,545 2,524 Total liabilities 2,09,798 1,97,979 2,11,334 2,27,593
Profit before tax 7,889 (39) 12,247 15,180 Net block 43,266 48,083 52,367 56,251
Prov for tax 2,354 (10) 3,086 3,825 Intangible assets 4,668 4,522 4,235 3,856
Less: Other adj 0 0 0 0 Capital WIP 3,240 3,240 3,240 3,240
Reported profit 5,821 331 9,561 11,755 Total fixed assets 51,173 55,844 59,842 63,346
Less: Excp.item (net) 0 0 0 0 Non current inv 3,421 3,781 4,181 4,581
Adjusted profit 5,821 331 9,561 11,755 Cash/cash equivalent 37,241 33,431 33,155 39,795
Diluted shares o/s 1,300 1,300 1,300 1,300 Sundry debtors 19,314 19,783 21,684 23,107
Adjusted diluted EPS 4.5 0.3 7.4 9.0 Loans & advances 27 27 27 27
DPS (INR) 0 0 0 0 Other assets 88,801 75,293 82,624 86,915
Tax rate (%) 29.8 25.2 25.2 25.2 Total assets 2,09,798 1,97,979 2,11,334 2,27,593

Important Ratios (%) Free Cash Flow (INR mn)

Year to March FY23A FY24E FY25E FY26E Year to March FY23A FY24E FY25E FY26E
Gross margin (%) 10.3 10.4 12.3 12.7 Reported profit 5,821 331 9,561 11,755
Staff cost (% of rev) 0.7 0.9 0.8 0.8 Add: Depreciation 3,585 4,029 4,702 5,196
A&P as % of sales 0.6 0.9 0.8 0.8 Interest (net of tax) 7,749 6,426 5,270 5,222
EBITDA margin (%) 2.9 1.5 3.5 3.8 Others (2,080) (3,049) 141 901
Net profit margin (%) 1.0 0.1 1.7 2.0 Less: Changes in WC (6,813) 1,090 (5,239) (1,010)
Revenue growth (% YoY) 7.4 (11.4) 9.6 6.6 Operating cash flow 6,633 8,836 11,349 18,238
EBITDA growth (% YoY) (4.3) (53.4) 154.3 17.3 Less: Capex (6,741) (8,700) (8,700) (8,700)
Adj. profit growth (%) (27.6) (94.3) 2,787.2 22.9 Free cash flow (108) 136 2,649 9,538

Assumptions (%) Key Ratios

Year to March FY23A FY24E FY25E FY26E Year to March FY23A FY24E FY25E FY26E
GDP (YoY %) 7.0 7.0 7.0 7.0 RoE (%) 7.4 0.4 11.0 12.1
Repo rate (%) 4.3 5.3 5.3 5.3 RoCE (%) 15.2 6.1 16.1 17.1
USD/INR (average) 77.0 77.0 77.0 77.0 Inventory days 54 55 49 51
Vol growth Edible Oil 3.4 1.5 7.2 4.0 Receivable days 13 14 13 14
Vol growth Food 37.5 10.0 25.0 10.0 Payable days 62 63 56 55
Vol growth Ind essen 34.1 2.0 6.5 6.0 Working cap (% sales) 2.3 2.4 3.1 3.1
Freight as % of sales 2.7 3.0 3.0 3.0 Gross debt/equity (x) 0.3 0.3 0.2 0.2
COGS % of consol rev 89.7 89.6 87.7 87.3 Net debt/equity (x) (0.2) (0.1) (0.1) (0.2)
Other exp (% of rev) 3.5 4.1 4.3 4.3 Interest coverage (x) 1.7 0.6 2.8 3.4

Valuation Metrics Valuation Drivers

Year to March FY23A FY24E FY25E FY26E Year to March FY23A FY24E FY25E FY26E
Diluted P/E (x) 79.7 1,401.6 48.5 39.5 EPS growth (%) (27.6) (94.3) 2,787.2 22.9
Price/BV (x) 5.7 5.7 5.1 4.5 RoE (%) 7.4 0.4 11.0 12.1
EV/EBITDA (x) 27.0 58.5 23.0 19.3 EBITDA growth (%) (4.3) (53.4) 154.3 17.3
Dividend yield (%) 0 0 0 0 Payout ratio (%) 0 0 0 0
Source: Company and Nuvama estimates

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 ADANI WILMAR

Trends at a glance
Particulars Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24
Revenue (INR mn) 1,43,787 1,49,173 1,47,241 1,41,500 1,53,786 1,38,726 1,29,281 1,22,672 1,28,284
EBITDA (INR mn) 5,037 4,257 4,431 2,539 4,460 3,588 1,304 1,437 5,042
PAT (INR mn) 2,114 2,343 1,936 488 1,959 936 -597 -772 2,009

Gross Margin (%) 9.8 9.8 10.1 9.5 9.9 10.4 9.1 10.0 12.9
EBITDA Margin (%) 3.5 2.9 3.0 1.8 2.9 2.6 1.0 1.2 3.9

Edible oil
Revenue growth % 40.0 41.0 22.7 -2.5 3.8 -12.8 -14.5 -19.5 -22.8
Volume (MMT) 0.89 0.88 0.70 0.82 0.96 0.88 0.89 0.85 0.94
Volume growth % 9 23 6 -1 9 - 27 4 -2

Food & FMCG

Revenue growth % 46.0 49.0 65.8 18.0 44.8 53.2 27.6 26.4 24.9
Volume (MMT) 0.17 0.18 0.19 0.22 0.22 0.25 0.23 0.26 0.26
Volume growth % 36 33 53 41 26 38 21 19 17

Industry essentials
Revenue growth % 41.0 34.0 67.1 -18.7 18.0 7.6 -15.6 1.7 0.4
Volume (MMT) 0.20 0.23 0.30 0.28 0.29 0.36 0.36 0.34 0.34
Volume growth % -19 11 22 22 38 55 21 25 17

Edible oil market share % 18.9 18.8 19.7 19.5 19.5 19.5 19.5 19.6 19.8
Wheat market share % 5.0 4.7 4.9 4.9 4.8 5.0 5.0 5.2 5.4
Rice market share % 11.7 6.5 8.4 8.5 7.5 7.2 5.9 7.4 5.7
Source: Company, Nuvama Research

Segmental growth
Year to March - Net Revenues (INR mn) Q3FY24 Q3FY23 % growth YoY Q2FY24 % growth QoQ
Edible oil 97,108.2 1,25,812.0 -23 90,375.3 7
Foods 12,734.2 10,195.6 25 12,826.1 -1
Industry essentials 18,441.2 18,372.8 0 19,470.1 -5

EBIT (INR mn) Q3FY24 Q3FY23 Q2FY24

Edible oil 2,973.0 2,556 16 -1949.7 NM
Foods 137.9 507 -73 518.2 -73
Industry essentials 205.3 412 -50 555.7 -63

EBIT margin % Q3FY24 Q3FY23 bps exp y-o-y Q2FY24 bps exp y-o-y
Edible oil 3.1 2 51 -2.2 -242
Foods 1.1 5 -78 4.0 -73
Industry essentials 1.1 2 -50 2.9 -61
Source: Company, Nuvama Research

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 ADANI WILMAR

Q3FY24 conference call takeaways

Detailed takeaways
Outlook

 The company is progressively using more regional approaches to drive deeper

penetration into the local markets.

 AWL is progressing successfully towards doubling its rural town coverage during
the financial year, aiming to increase from ~13,000 towns to over 30,000 rural
towns by the end of this year.

 The company continues to expand its market presence by entering new markets.
Currently, its branded products are accessible in 38 countries spanning six
continents.

 AWL aims to enhance the mix of premium brands, with specific focus on
expanding the reach of Fortune and Kohinoor brands.

 Efforts are being directed towards improving inventory management to enhance

asset turnover.

 The company is also focused on optimising capacity utilisation through calibrated

capacity expansion in the medium term.

 Within the next year, AWL has set a target to increase its direct coverage to 1mn
outlets.

Q3FY24 performance

 The company’s growth trajectory remained steady with volume growth of 5%

YoY in Q3FY24 and 13% YoY in 9MFY24.

 Consumer demand in packaged staple foods stayed strong during the festive
season of Q3.

 Branded products, constituting ~80% of edible oils and Foods & FMCG sales,
demonstrated a faster growth rate compared to the overall sales in both
segments.

 Despite good volume growth, revenue is optically lower by 17% YoY in Q3, as
product pricing has been lower during the year, in-line with lower raw-material
costs.

 The profitability of the company has again normalised, after witnessing two
quarters of subdued profits due to high-cost inventory and hedge dis-alignment.

 The profitability of the Bangladesh subsidiary remains under pressure due to

challenges associated with local currency issues.

Edible oil

 Volumes were flat YoY in Q3 and grew 8% YoY during 9MFY24.

 Branded products grew 3% YoY in Q3 and 15% YoY in 9MFY24.

 The market share of AWL in the Refined Oil Consumer Pack (ROCP) segment of
edible oils reached 19.8% in Dec-23 on a MAT basis, as per Nielsen data. This
represents a 30bp improvement compared to the same period last year.

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 ADANI WILMAR

 The segment recorded revenue of INR97bn in Q3, with sequential growth of 7%

compared to Q2.

 In YoY terms, revenue was optically down 23% YoY in Q3, as product pricing has
been lower during the year, in-line with lower raw-material costs.

 Growth in the edible oils segment continues to be driven by strong growth in

sunflower oil and mustard oil, which have been growing faster than the industry
due to its brand equity.

Raw material price movements

 Q3 experienced high volatility in soya oil prices due to the domestic economic
situation in Argentina.
 Soya prices moderated post the elections in Argentina, concluding the quarter at
a lower rate.
 Palm and sunflower oil prices remained range bound.
 Consumer demand for edible oil aligns with the initial expectations of the
industry.
 Packed oil demonstrated growth of around 5% in Q3, and small players did not
capture market share as prices in the market have declined, making edible oil
more affordable.
 Approximately 23 million tons of edible oil are consumed in the country, with
around 8.5-9 million tons being domestic, and the remaining 16 million tons
being imported.

Food & FMCG

 The Food & FMCG segment, encompassing products like wheat flour, rice, pulses,
besan, sugar, poha, and soap, sustained its trend of outperformance.
 During the quarter, the segment revenues grew at 25% YoY, with an underlying
volume growth of 17% YoY.
 In 9MFY24, the segment delivered a turnover of INR36bn, which marked robust
growth of 26% YoY.
 Exports restrictions have posed challenges for the growth of the foods segment
in the last three quarters.
 In the domestic market, revenue from branded products has exhibited consistent
growth, surpassing 40% YoY for the last nine quarters.
 The wheat business successfully gained market share in South India through
multiple interventions, resulting in notable improvements in volume offtake
during Q3. This expansion also increased penetration in retail outlets and
generated pull demand from retailers.
 Branded penetration is high in the South India market for the industry, coupled
with strong pricing power for brands.
 AWL plans to maintain strategic focus on the South India market to secure a fair
market share.
 In the rice segment, a refined two-brand strategy has been adopted, involving
the integrated play of two brands - Kohinoor and Fortune. This strategy is
designed with sharply defined customer segments and corresponding product
offerings.

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 ADANI WILMAR

 AWL is actively involved in both basmati and regional rice segments.

 There is strategic focus on scaling up branded exports, with the recent initiation
of tapping into this opportunity through a dedicated export team. The objective
is to establish distribution channels and develop markets.
 The company is expanding its market reach, as branded products are now
accessible in 38 countries across six continents.
 Export sales accounted for 40%-plus volume of packs sold during Q3
 AWL has established facilities for converting paddy to rice in Bihar, UP,
Karnataka, West Bengal, Punjab, and Haryana.
 The company is set to commence facilities in Maharashtra and Andhra Pradesh,
aiming to bring rice production closer to the market.
 AWL has started hiring agriculture graduates as trainees who will work with FPOs
and farmers.
 Q3 was a good quarter for rice business and Q4 is expected be on similar lines.
 In basmati rice, Kohinoor did 6500 tonnes of sales in December.

Pricing

 Aggressive pricing strategies by AWL in the food business led to an EBITDA

outperformance.

 Pricing in the business typically follows a cycle, starting low at harvest time and
gradually increasing until November/December.

 The pricing strategy is becoming more secure due to effective hedges being
implemented in tandem.

Industry essentials

 The industry essentials volume grew 17% YoY in Q3FY24 and 21% YoY in 9MFY24,
supported by robust growth in Castor and Oleochemical businesses.

 The segment recorded revenue of INR18bn in Q3 and INR57bn in 9MFY24.

 AWL has almost 33% market share of steric acid and 11% in soap noodles.

 October witnessed strong volumes, followed by a moderate performance in

November, and a decline in volumes during December. Despite the variation, the
overall volume for the quarter was positive.

General trade distribution

 Direct Reach experienced a substantial growth, increasing by more than 30,000

in Q3FY24, indicating a significant expansion in the company's outreach.
 Rural town coverage saw an addition of 1000-plus rural towns during Q3FY24.
 The saliency of rural sales remained consistent at approximately 30%,
underscoring the continued significance of rural markets for the company.
 The company is on track to achieve a considerable expansion in rural town
coverage, aiming to increase from around 13,000 to over 30,000 rural towns in
FY24.
 In CY23, AWL has successfully increased its direct reach from 0.5 million to 0.66
million, showcasing growth in market presence and accessibility.

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 ADANI WILMAR

Channel Performance

 HoReCa sales volume witnessed a remarkable increase of approximately 5x in

9MFY24 compared to the same period the previous year.

 The distribution footprint of HoReCa has expanded to cover 36 major cities

across India, highlighting the extensive presence in key urban centres.

 Branded exports demonstrated substantial growth, registering an impressive

80% YoY increase in sales volume during 9MFY24.

 In the last 12 months (LTM), alternate channels contributed a substantial

revenue of ~INR2,7bn for the company, reflecting the significance of diverse
channels in the overall revenue stream.

New Product launches

 New product launches include the introduction of Premium Sharbati Atta in

select markets, featuring a SKU size of 5kg.

 The distribution strategy involves an exclusive launch in Modern Trade, followed

by E-Commerce and general trade channels.

 Furthermore, the Fortune Biryani Kit was launched in export markets during
Q1FY24 under the 'Fortune' brand, with exports contributing to 44% of Biryani
kit sales in Q3FY24.

Macro environment

 The Israel-Hamas conflict poses a supply chain threat to the food business,
specifically affecting container freights.

 The Argentina election has impacted the soya bean supply chain, but
improvements are expected starting from February.

 The ongoing Russia-Ukraine conflict continues to impact the sunflower supply

chain. However, a good agriculture season in Argentina and Brazil this year is
anticipated to enhance the overall supply chain.

 Additionally, the Red Sea issue has led to a rise in container transportation costs,
with an increase of USD 30-40 per ton on a cargo valued at USD 1100.

 Last year, Argentina faced drought conditions, resulting in less than 25 million
tonnes of crops. This year, a better crop yield is expected, reaching at least 45-
59 million tonnes.

Others

 AWL has increased its footprint by taking over 11 factories and managing them
with their own staff, in addition to operating two of its own factories.

 The company has the largest number of manufacturing pumps and 93 depots
across the country for efficient supply chain management.

 AWL will do mass advertising in Rice. In Fortune and Kohinoor, AWL has higher
A&P spends than #2 player in rice.

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 ADANI WILMAR

Outlook and Valuation

We have revised the FY24/25/26E estimates for Adani Wilmar, and cut revenue by
8% each for FY24E/25E/26E which flows down to EBITDA cut of 45%/12%/3% based
on the following reasons:

 Inflation as of now is soft versus initial expectation for H2FY24 and FY25. Thus,
edible oil players passed on the benefits to consumers in terms of price cuts.

 Export restrictions on basmati and non-basmati rice continued.

 Edible oil (currently ~60% of mix as on 9MFY24) as a segment is forecast to grow

in low-mid single digit. Hence, the company’s focus is more on improving its mix
of FMCG (currently ~17% as on 9MFY24), which is growing in double digit.

 The ongoing geopolitical crises (Red Sea crisis), will have some impact on supply
chain impacting freight cost.

We expect the profitability of edible oils to return to normal levels in H2FY25/FY26

in terms of gross margin and EBITDA per ton as the gap between spot and future
prices narrows. We expect AWL to focus on its plans to increase the importance of
the foods business to ~ 30% (currently ~17%) of sales volume in the coming years.

We retain ‘BUY’ on AWL with a revised TP of INR480 (earlier INR515).

SoTP valuation (in INR)

Valuation Methodology Target multiple Per share contribution
Edible oil EV/EBITDA 20 251
Industry essentials EV/EBITDA 10 35
Foods EV/Sales 4 184
EV 470
Net Cash 9
Value of the share 479

Rounded off ~480

Source: Nuvama Research

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 ADANI WILMAR

Consolidated Financial Snapshot

Year to March Q3FY24 Q3FY23 % change Q2FY24 % change
Total Income 1,28,284 1,54,381 (16.9) 1,22,672 4.6
Cost of goods sold 1,11,756 1,37,160 (18.5) 1,10,446 1.2
Gross profit 16,528 17,220 (4.0) 12,226 35.2
Staff costs 996 921 8.1 1,012 (1.5)
Other expenditure 10,489 10,247 2.4 9,777 7.3
Total expenditure 11,486 11,168 2.8 10,789 6.5
EBITDA 5,042 6,052 (16.7) 1,437 250.9
Depreciation 954 910 4.9 957 (0.4)
EBIT 4,088 5,143 (20.5) 479 752.9
Other income 592 775 (23.6) 641 (7.5)
Interest and financial charges 1,871 2,519 (25.7) 2,202 (15.1)
PBT 2,810 3,398 (17.3) (1,083) NM
Provision for taxation 749 1,084 (30.9) (315) NM
Core Profit 2,060 2,315 (11.0) (767) NM
Share in JV (51) 147 NM (5) NM
Reported PAT 2,009 2,462 (18.4) (1,307) NM
Adjusted PAT 2,009 2,462 (18.4) (772) NM
Number of shares 1,300 1,300 1,300
EPS 1.5 1.9 (18.4) (0.6) NM
as % of net sales
COGS 87.1 88.8 (173) 90.0 (292)
Staff costs 0.8 0.6 18 0.8 (5)
Other expenditure 8.2 6.6 154 8.0 21
EBITDA 3.9 3.9 1 1.2 276
EBIT 3.2 3.3 (14) 0.4 280
PBT 2.2 2.2 (1) (0.9) 307
Net profit 1.6 1.5 11 (0.6) NM
Tax rate 26.7 31.9 (522) 29.1 NM
Source: Company, Nuvama Research

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 ADANI WILMAR

Company Description
Adani Wilmar is one of the largest FMCG food companies in India offering essential
kitchen commodities to Indian consumers, including edible oil, wheat flour, rice,
pulses and sugar. The company was incorporated in January 1999 as a joint venture
between the Adani Group and the Wilmar Group, one of Asia’s leading agri-business
groups. The company is engaged in the manufacture of packaged food, edible oils,
bakery & lauric products, personal care products and industry essentials (including
oleochemicals, castor oil and its derivatives and de-oiled cakes). Its operations are
diversified into value-added edible oil products such as rice bran health oil, fortified
foods, ready-to-cook soya chunks, khichdi and other fast-moving consumer goods.
Adani Wilmar boasts the widest pan-India distribution network among branded
edible oil companies.

Investment Rationale
Branded products in India are growing faster, compared to unorganised players and
loose products in all major segments of essentials, thereby increasing as a share of
the overall grocery segment. Adani Wilmar being a player in branded products is
expected to benefit from it. In the edible oils segment, low per capita consumption
and emergence of exotic oils indicate huge headroom for growth. A number of
packaged food categories have witnessed a significant increase in the overall
branded product usage. Adani Wilmar has significant presence in in edible oil
(Number 1 player), Wheat flour (Number 2) and Basmati Rice (Number 3). Further,
Adani Wilmar is working towards transitioning itself into a foods company and
working towards increasing salience of Foods and FMCG.

Key Risks
 Fluctuating prices of commodities can impact company’s profitability

 Reliability on edible oil vertical

 Lack of long-term agreements with raw material supplier.

10 Nuvama Research is also available on www.nuvamaresearch.com, Bloomberg - NUVA, Thomson Reuters, and Factset Nuvama Institutional Equities
 ADANI WILMAR

Additional Data
Management Holdings – Top 10*
Chairman Mr. Kuok Khoon Hong % Holding % Holding

MD Mr. Anghu Mallick Vanguard Group 0.46 Nippon Life Ind 0.01
State street Co 0.04 Ameriprise Fina 0.01
CFO Mr. Shrikant Kanhere
Charles Schwab 0.02 Franklin Resour 0.01
Exe. Director Mr. Pranav Vinod Adani UTI Asset Manag 0.01 WisdomTree Inc 0.01
Auditor M/S Shah Dhandharia& Co ICICI Prudentia 0.01 SBI Funds Manag 0.01
*Latest public data

Recent Company Research Recent Sector Research

Date Title Price Reco Date Name of Co./Sector Title
Overall mixed performance; Cigarette volumes disappoint;
05-Jan-24 378 Buy 29-Jan-24 ITC
Nuvama Flash Result Update
Strong margins but Foods
01-Nov-23 Hedging losses bite; Result Update 315 Buy 29-Jan-24 Marico
disappoints; Result Update
FMCG impressive, edible oil Bringing a smile on face; Result
05-Oct-23 350 Buy 22-Jan-24 Colgate-Palmolive
supressed; Nuvama Flash Update

Rating and Daily Volume Interpretation

850 150

680 125

100
510
(INR)

(Mn)
75
340
50
170 25

0 0
Nov-22

Nov-23
Jan-23

Jan-24
Jul-22

Jul-23
Apr-22

May-22

Jun-22

Apr-23

May-23

Jun-23
Feb-22
Mar-22

Aug-22

Sep-22

Dec-22

Feb-23
Mar-23

Aug-23

Sep-23

Dec-23
Oct-22

Oct-23

Volume AWLTD IN EQUITY Buy Hold Reduce

Source: Bloomberg, Nuvama research

Rating Rationale & Distribution: Nuvama Research

Expected absolute returns
Rating Rating Distribution
over 12 months
Buy 15% 202

Hold <15% and >-5% 63

Reduce <-5% 22

Nuvama Research is also available on www.nuvamaresearch.com, Bloomberg - NUVA, Thomson Reuters, and Factset Nuvama Institutional Equities 11
 ADANI WILMAR

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INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS. READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE
INVESTING.

Digitally signed by ABNEESH KUMAR ROY

Abneesh Roy
ABNEESH
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Head of Research Committee st=MAHARASHTRA,

KUMAR ROY
serialNumber=7370c9de10fb28bbf7cbc6f71afe3cfe848fa
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ROY
Abneesh.Roy@nuvama.com Date: 2024.01.31 22:09:03 +05'30'
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