Adani Wilmar share: Adani Group has recently announced its complete exit from Adani Wilmar Limited (AWL). Wilmar will focus on growing its high-margin FMCG business after the exit of Adani Group. According to sources, Wilmar is preparing to leverage its core business and large distribution network by adopting a strategy similar to ITC Limited (ITC). Shares of AWL, the country’s largest edible oil company, fell by 0.56 percent last Friday. This stock closed at Rs 328.55 on BSE.
Plan to expand business on the lines of ITC
Similarly to ITC using its strong cigarette business to grow its business in FMCG, AWL is set to use its core edible oil business as a foundation for growth in the FMCG sector. Sources with knowledge of the matter said that after Adani Group’s exit, Wilmar may introduce more global FMCG brands in the Indian market.
How was AWL’s performance in the December quarter?
AWL’s FMCG business recorded 24 per cent year-on-year growth in volumes in the December quarter. The share of food and FMCG in total sales volume increased to 20 percent. The share of this segment in the total revenue increased to nine percent. This change reflects the strategy adopted by ITC.
In a recent filing to the stock exchanges, the company said, “In the food category, key packaged products like wheat flour, rice, nuggets, pulses, poha and sugar have registered strong double digit growth.” The company further said, “Our integrated distribution model is helping us leverage the strength of our oil distribution network to expand the reach of our food products, especially in urban markets. E-commerce sales have also grown by 41 percent year-on-year. There has been rapid growth.”
AWL through its edible oil business (under the Fortune brand) has achieved a large distribution network reaching 21 lakh outlets. Although the edible oil segment is seeing a steady decline in share, it still accounts for about 80 per cent of the company’s revenue, of which 10 per cent comes from B2B sales.
AWL stock performance
Adani Wilmar shares have been under pressure for a long time. This stock has given flat returns in the last 6 months. At the same time, it has declined by 13 percent in the last one year. At the same time, its investors have suffered a loss of 42 percent in the last two years. The all-time high of the share is Rs 878, which means it is down about 62 percent from its high. The market cap of the company is Rs 42700 crore.
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