Adani Wilmar climbs 1% on bargain buying

Adani Wilmar shares seem to be stabilising after a one-way slide over the past fortnight. Since May 23, the stock lost 16 percent. In the early trade on July 6, the stock was trading higher by 1 percent.

At 9:28 am, Adani Wilmar was quoting at Rs 410 apiece, up 0.9 percent from the previous day’s close on the National Stock Exchange.

The food and beverage company has been on a downward journey exacerbated by a sharp 15 percent fall in the first quarter sales announced on July 5. The fall in sales was because of a dip in edible oil prices.

The slight jump in stock price gains significance as the food and beverage company reported a sharp 15 percent decline in its first quarter sales on July 05 after a dip in edible oil prices dented demand for its food products.

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“While the volume growth was strong, the sales value decline on year-on-year basis is reflective of a sharp decline in edible oil prices,” the company said in a disclosure to the exchanges.

Since Q1 of the last fiscal year, edible oil prices have been declining. This trend has continued with the price of edible oils experiencing further decline, in the range of 5 percent to 20 percent before recovering as the quarter came to a close.

“This reduction has been attributed to a combination of factors, including the decline in consumer demand in developed economies, easing of supply at the Black Sea region and robust production of oilseeds globally”, the company added.

Even as it reported a fall in oil sales, the food and FMCG segment grew 30 percent YoY surpassing Rs 1,000 crore largely aided by sales of branded products in the domestic market.

The company said the majority of its branded food products recorded a volume increase of more than 25 percent, with many of the products launched a couple of years ago saw rapid growth.

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