Financial Performance Summary

Q2 FY27 Consolidated Results:

  • Revenue: ₹22,202 crore, up 26% year-on-year
  • Underlying volume growth: 14% year-on-year
  • Normalized operating EBITDA: ₹623 crore, up 11% year-on-year
  • Profit before tax: ₹344 crore, up 4% year-on-year
  • Profit after tax: ₹239 crore, down 2% year-on-year
  • PAT decline attributed to minimum corporate tax computed on revenue of Bangladesh subsidiary under local regulations

H1 FY27 Consolidated Results:

  • Revenue: ₹42,250 crore, up 22% year-on-year
  • Underlying volume growth: 11% year-on-year
  • Normalized operating EBITDA: ₹1,378 crore, up 25% year-on-year
  • Profit before tax: ₹822 crore, up 27% year-on-year
  • Profit after tax: ₹591 crore, up 22% year-on-year

Segment Performance Details

Food and FMCG Business:

  • Quarterly revenue: ₹2,216 crore, up 32% year-on-year
  • EBITDA margin: 3.2% (within guided range of 3-4% for FY27)
  • Key performers: Fortune pulses grew over 40% YoY, crossing ₹100 crore quarterly revenue
  • Rice and flour businesses maintained double-digit revenue growth
  • Health and convenience portfolio LTM revenues exceeded ₹1,400 crore
  • Innovations include multigrain atta, olive oil, cold-pressed mustard oil

Edible Oils Business:

  • Volume growth: 5% during the quarter
  • EBITDA: approximately ₹4,100 per MT (within guided range of ₹4,000-4,500 per MT)
  • Growth in domestic oils: mustard, groundnut and cottonseed oil
  • Maintained market leadership despite challenging operating environment

Industry Essentials Business:

  • Volume growth: 25% during the quarter
  • EBITDA: ₹4,300 per metric ton (exceeding guided range of ₹3,000-3,500 per MT)
  • Oleochemicals and specialty chemicals contribute 45% of segment revenue
  • Supported by momentum in oleochemicals and specialty chemicals

Distribution and Channel Strategy

  • Direct retail reach: 9.7 lakh outlets
  • Total retail reach: approximately 26 lakh outlets
  • Quick commerce growth: 40% year-on-year
  • HoReCa business grew 22% with LTM revenue crossing ₹800 crore
  • Branded exports delivered 72% year-on-year growth
  • Focus shifting to improving throughput, outlet productivity and distribution efficiencies

Working Capital and Cash Flow

  • Inventory increased by ₹6,000 crore due to sluggish September and supply chain disruptions in sunflower oil
  • Working capital funded through working capital lines
  • Cash flow from operations shown as negative due to inventory buildup
  • Management expects inventory levels to normalize in upcoming OND quarter
  • Finance cost increased due to higher working capital utilization

Management Guidance and Outlook

Food and FMCG:

  • Maintain FY27 EBITDA margin guidance of 3-4%
  • Aspiration to move towards high single-digit margin over medium term (beginning FY28 onwards)
  • Expect to sustain strong revenue growth

Edible Oil:

  • Mid-single-digit volume growth guidance maintained
  • Gradual uptick in market share expected
  • Maintain EBITDA per ton within ₹4,000-4,500 range

Industry Essentials:

  • Increasing contribution of value-added oleochemicals and specialty chemicals to support profitability
  • Working towards guided operating parameters

Overall Company:

  • Full-year revenue expectation: approximately ₹85,000 crore
  • Full-year EBITDA expectation: approximately ₹2,600 crore
  • Full-year EBITDA margin expectation: approximately 3%

Market Environment and Challenges

  • Rural growth lagged urban growth in Q2
  • Deficit rainfall of 12-13% across India, with some territories experiencing 30-40% deficit
  • Headline CPI at approximately 6%, food inflation at 7-7.5%
  • Government reduced import duty on edible oil in late September
  • Standardized pack sizes implementation expected to benefit branded companies

Business Strategy Highlights

  • Accelerate scale-up of food and FMCG business
  • Strengthen leadership in edible oil
  • Expand value-added oleochemicals and specialty chemicals portfolio
  • Improve profitability through scale and operating efficiencies
  • Focus on modern trade, alternate channels including e-com and quick-com
  • Geographic expansion of Tops brand (acquired through GD Foods) to East and Central India

Q&A Session Key Points

  • Inventory buildup of ₹6,000 crore expected to normalize in coming quarter
  • Industry Essentials growth of 26% not sustainable; expected to normalize to 10-11%
  • Food business channel mix: 75% general trade, 25% alternate channels
  • Export markets focused on regions with Indian diaspora (US, UK, Europe, Australia)
  • No plans to demerge Industry Essentials or oleochemical business
  • Trade credit of ₹8,500 crore represents supplier credit for imports, not considered in net debt calculation