Adani Wilmar posts 16% profit growth, shrugs off Hindenburg report impact

FORTUNE brand owner Adani Wilmar reported a 16 per cent increase in quarterly profit, adding that its operations and results were not affected by a recent report by US short seller Hindenburg Research.

The company said in an exchange filing on Wednesday (Feb 8) that its consolidated net profit rose to 2.5 billion rupees (S$40.1 million) for the quarter ended Dec 31, 2022. Revenue from operations increased 7 per cent to 154.4 billion rupees.

Inflation-hit consumers in rural India, who switched to unbranded cheaper alternatives during the pandemic, have begun spending more with the easing pace of price hikes. Adani Wilmar said the quarter “also saw macro tailwinds in the form of strong demand on the back of festivities and weddings, gradual recovery in rural markets and a bumper kharif crop”. The last of those referred to crops grown during the monsoon season.

The company added that revenue from the edible oil business, its largest, climbed nearly 4 per cent on the uptick in festive and wedding demand. Its food and fast-moving consumer goods business jumped nearly 45 per cent. It said it was looking to tap into “a huge opportunity” by increasing distribution in rural towns and launching region-specific ready-to-cook products.

Adani Wilmar’s shares rose 5 per cent ahead of the announcing of the earnings; before this, it had lost about 30 per cent following Hindenburg’s report late last month.

In the report, Hindenburg said it held short positions in Adani Group, and accused the conglomerate of improperly using offshore tax havens. It flagged concerns about high levels of debt, and erased more than US$110 billion off the market value of its seven core listed companies.

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The consumer goods maker said it was “confident” that the research report had “no bearing” on its operations and financial results.

Last week, Saffola brand owner Marico also reported a better-than-expected quarterly profit. REUTERS