Adani Wilmar Limited (AWL) is one of the conglomerates in India and was formed in 1999 as a joint venture between Adbetani Enterprises and Wilmar International of Singapore.

Adani Wilmar's trailing twelve-month (TTM) P/E ratio stands at 82.30, significantly higher than the sector average of 27.82. In its most recent quarter (April - June ‘24), the company reported a net profit of Rs. 313.20 crore.

The company’s ownership structure includes 87.87% promoter holding and 12.13% public holding. As of June 30, 2024, mutual funds held a 0.22% stake in Adani Wilmar, reflecting a decline from the previous quarter. Similarly, foreign institutional investors (FIIs) held a 0.73% stake, which also saw a decrease from the prior quarter.

While it appears to be a good stock investment, there are a few pointers that investors should note and understand while doing the Adani Wilmar analysis.

• Adani Wilmar is among the key players in the market. It is a leading producer of edible oil in the country and plans to expand its food and FMCG business.
• It has a significant presence in the kitchen essentials space, which includes staples, cereals, pulses, sugar, etc. These items form the core of daily consumption in households, making them essential regardless of economic fluctuations.
• Adani Wilmar has an integrated business model in which manufacturing is smoothly integrated, and different business segments support and complement each other. This helps optimise costs across different verticals. The Wilmar Group meets raw material import requirements.
• A good distribution network and brand goodwill have also given Adani Wilmar recognition in the market among consumers and investors.

Adani Wilmar is one of the largest FMCG companies in India. It manufactures soybean oil, sesame oil, sunflower oil, rice, wheat, flour, pulses, sugar, vegetable ghee, and much more. It is a well-known brand that serves both household and institutional buyers and also exports to multiple countries across the Middle East, Southeast Asia, Ukraine, Ghana, and Africa.

The category breakdown of Adani Wimar is as follows:

• Edible oil constitutes about 83% of the revenue
• Packaged food and FMCG account for 5% of the revenue
• Industry essentials contribute 12% to the company’s revenue

The different product lines enable diversification for AWL, reducing its dependency on any category, which seems to work well for the company.

Adani Wilmar's growth is driven by strong brand recognition and a leading position in key product categories like wheat, rice, flour, and edible oil. While demand for these staples remains steady, several factors are fueling further growth.

1. Shift to packaged products: There has been an increasing trend in the market to shift to packaged food over local and loosely available food options. As this segment is expected to grow by 14%, Adani Wilmar stands to gain from this change in consumption pattern.
2. Expansion into RTE and RTD products: Adani Wilmar has good growth potential when it comes to the ready-to-eat (RTE) and ready-to-drink (RTD) segment that produces products like poha, khichdi, paw bhaji and more under its Fortune brand.
3. Rising edible oil consumption: Edible oil is a key household staple, with rising demand from consumers and food service industries. The changing tastes of consumers and the growth of food processing units like hotels are driving increased consumption, benefiting major oil producers like Adani Wilmar.
4. Brand loyalty: Adani Wilmar has established itself as a trusted brand, especially in the edible oils space. It caters to a wide variety of socio-economic classes. One of its flagship products, Fortune oils, is amongst the highest-selling in India.
5. Distribution network: The company boasts one of the largest distribution networks of more than 5600 distributors across India. It also has a significant presence on e-commerce platforms.

Adani Wilmar announced its quarterly results for the period ending March 31, 2024. While the company had a significant increase in profits (up 59% to Rs 156 crore), the overall sales decreased slightly (down 3% to Rs 12,703.64 crore). This is because it sold less oil meal, a type of animal feed.

Even though the sales were down, Adani Wilmar did well in other areas. The sale of edible oils increased by 11%, and its food and FMCG products (like packaged food) increased by 9%. This shows the business is doing well in those specific areas.

Because of these mixed results, the stock price of Adani Wilmar might be a bit unpredictable. It could go up or down depending on how people feel about the company's performance and other factors in the market. If you are thinking about investing in Adani Wilmar, it is important to do your own Adani Wilamar analysis or talk to a financial advisor.