India's Adani Wilmar profit plunges on cost rise, soft rural demand

BENGALURU (Reuters) -India's Adani Wilmar reported a 73% slump in second-quarter profit on Thursday, as the Fortune cooking oil maker reeled under dull demand from rural areas and wrestled with industry-wide input cost inflation.

Consolidated net profit for the second quarter ended Sept. 30 fell to 487.6 million Indian rupees ($5.88 million) from 1.82 billion rupees a year ago.

Adani Wilmar, a joint venture between Indian conglomerate Adani Group and Singapore's Wilmar Group, saw total expenses climb 6% to 141.5 billion rupees, while revenue from operations rose over 4% to 141.5 billion rupees. The growth pace has been dragged by a decline in mainstay edible oil.

"In the edible oils segment, the quarter that went by saw multiple challenges in consumer demand with several macro headwinds in the form of high inflation ... delayed monsoon and tepid rural demand," Adani Wilmar said in a statement.

Consumer packaged goods makers from Colgate-Palmolive India to Nestle have been hammered by the COVID-19-led rise in cost of raw materials, with the Ukraine war further aggravating it.

Meanwhile, cash-strapped rural households have been opting for cheaper unbranded alternatives commonly sold in mom-and-pop stores even as branded cooking oil makers such as Adani Wilmar and Saffola brand owner Marico lowered prices.

Consumer goods companies are now betting on festive demand, easing prices of a few essentials and late revival in monsoon rains in the agriculture-dependent economy to boost sales in the coming months.

Adani Wilmar expects the second half of this fiscal year to be better with a recovery in consumer demand, even in its edible oils business.

($1 = 82.8830 Indian rupees)

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Dhanya Ann Thoppil)