We are putting all our earnings into growth: Adani Wilmar MD & CEO

Our direct retail reaches around 575,000 outlets and indirect is 1.6 million, said Wilmar

During the April-June quarter, Adani Wilmar saw its overall volumes rise 15 per cent. Also, its operating revenue was up 30 per cent compared to last year at Rs 14,732 crore. Angshu Mallick, managing director (MD) and chief executive officer (CEO) speaks to Sharleen D’Souza on its results and outlook. Edited excerpts:

You have seen a jump in volumes, what will you attribute it to?

In fast-moving consumer goods (FMCG), we witnessed a 53 per cent jump, mainly because we are in the staples business. Our brand Fortune has a connection with consumers. I have seen consumers stick to our brand. Staple prices only went up 5-7 per cent, so we did well. Exports also had the benefit of support from Wilmar in rice, and they supported us in terms of export to different countries, which we did very well. Our rice export volumes went up over 70 per cent. We also saw our volumes grow in industry essentials. The main hero is actually oil because Nielsen also says there is a drop in consumption and branded edible oil has shown around 5.7 per cent decrease. We have shown an increase because we have a portfolio of oil and our distribution reach is the highest in the country. We have also started rural distribution much more seriously this year and we went aggressively to open direct distribution in smaller towns. 

What is your current distribution reach and what is your distribution target for this financial year?

Our direct retail reaches around 575,000 outlets and indirect is 1.6 million. We want to reach at least 700,000 direct retailers in the country.

What is the status of imports of sunflower oil from Russia and Ukraine?

As far as sunflower oil is concerned, there is total demand destruction in the country. Imports have reduced by 50 per cent and the present demand of sunflower oil is limited now. Also, small quantities did come from Argentina. Now, small quantities are coming from Russia, Turkey and other countries. India already has some stock that we are carrying on. I don’t think there is much pressure on sunflower oil. 

Wheat prices have started to firm up. How do you see prices moving from here and will you initiate price increases as well?

Normally, this time of the year, wheat prices are always stable. Although prices have gone up by almost 10 per cent after the harvest, the price increase was also because domestic production was lower by almost 10-15 per cent. The government had allowed exports but they have stopped now. Currently, wheat prices are higher compared to last year, and going forward, I don't think prices will rise as much. I’m sure the government is also looking at all options and may reduce duty and allow imports. It may start some amount of open sales from FCI. It may take some action to ensure that the market is cooled down.

We will review our pricing decision in September after seeing how everything pans out.  I think small hikes will happen but not a big one. 

How do we see Adani Wilmar margins to perform in the coming quarters?

We are currently putting all our earnings into growth. That is why you see such high growth. Net bottom line may not be as important as top line. As of now, we want to increase our market share. Our market share has gone up in all the categories that we are operating in, and we want to increase our volumes.  

How do you expect demand to pan out?

Rural definitely did shrink. Our share of the rural segment was 35 per cent in edible oil, which shrank to 31 per cent as consumption reduced due to high prices. Instead of buying five litre and 15-litre packs, people were buying more of one litre, half litres and these stock keeping units (SKUs) grew by 40-50 per cent. Bigger ones came down. The April-June period is always bad, but July onwards, the situation becomes better.