Adani Group’s two flagship companies, Adani Wilmar and Ambuja Cements, have experienced contrasting financial results in the first quarter of the fiscal year 2023-24. The companies’ divergent performance has led to different responses from stock market investors.
Adani Wilmar Q1 Performance: Adani Wilmar, India’s largest packaged oil maker, declared a net loss of ₹79 crore in Q1 FY24. This marks a notable drop from the net profit of ₹194 crore reported in the same quarter last year. Despite a 25% year-on-year volume growth across all segments, the company’s revenues fell by 12% to ₹12,928 crore, largely due to a sharp decline in edible oil prices. These factors, along with increased interest expenses and losses in the Bangladesh subsidiary, have contributed to the company’s reduced profitability.
Ambuja Cements Q1 Performance: In contrast, Ambuja Cements, the Adani Group’s cement manufacturer, has had a better run. Despite its standalone net profit decreasing by 38.5% to ₹644.88 crore, the company saw an 18.4% increase in operational revenue, reaching ₹4,729.7 crore. The rise in cement and clinker sales volume and lower input costs thanks to synergies within the Adani Group have boosted the company’s EBITDA growth.
In the wake of these results, Ambuja Cements has moved to strengthen its position by agreeing to acquire Sanghi Cements. Meanwhile, Adani Wilmar is focused on mitigating the impact of falling edible oil prices and inventory costs.
Price Action: Adani Wilmar shares were trading 1.21% lower at ₹395.30 shortly after markets opened for trading on Thursday while Ambuja Cements shares were up 0.66% at ₹465.50.
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