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Adani Wilmar Shares Surge 5.2% on Favorable Import Tax Extension for Edible Oils

In today’s trading session, Adani Wilmar, a prominent player in the Indian edible oil and food processing sector, experienced a robust surge of 5.2%, reaching ₹369.70 per share. The positive momentum is attributed to reports indicating that India will extend the lower import tax rates for edible oils until March 2025.

Initially set to expire in March 2024, the lower import duty structure on crude palm oil, crude sunflower oil, and crude soy oil has been extended, allowing refiners to continue importing at reduced duties until March 2025, as reported by The Economic Times.

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Adani Wilmar, an equal joint venture between the Adani Group and Wilmar International, with each holding a 43.97% stake, has seen its shares currently trading 58% lower than their all-time high of ₹878 per share.

The company’s financial performance in the second quarter of FY24 showed a net loss of ₹130.73 crore, a significant shift from the net profit of ₹48.76 crore in the same quarter last fiscal. The decline in revenue from operations, down 13% to ₹12,267.15 crore, was attributed to a sharp correction in edible oil prices. Despite this, the company recorded a volume growth of 11% YoY in Q2, with H1FY24 volume growth standing at 18% YoY.

On the operational front, EBITDA dropped by 43% to ₹144 crore from ₹254 crore, and the EBITDA margin contracted to 1.2% from 1.8% YoY.

In the first half of the fiscal year, Adani Group companies exhibited improved cash reserves, rising by 13.7% to ₹45,895 crore. This improvement was driven by increased earnings across various business segments, while the debt levels remained nearly unchanged.

The half-year credit performance report revealed an increase in EBITDA to ₹71,253 crore in April–September of the current fiscal year compared to ₹57,219 crore a year ago. Gross assets experienced 6% growth, reaching about ₹4.5 lakh crore.

While gross debt remained stable at ₹2.26 lakh crore, the net debt, factoring in cash reserves, stood at ₹1.80 lakh crore. This represents a 3.6% reduction compared to the ₹1.87 lakh crore recorded in April–September 2022.

As of 01:15 PM, Adani Wilmar shares were trading with a gain of 3.92% at ₹365.20.

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