Adani Wilmar Ltd
NSE:AWL
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Adani Wilmar Ltd
Earnings Call Analysis
Q2-2025 Analysis
Adani Wilmar Ltd
Adani Wilmar kicked off its Q2 FY '25 earnings call with impressive numbers, noting a 12% increase in volume and an 18% boost in revenue, totaling approximately INR 14,500 crore for the quarter. Stand-alone EBITDA stood at INR 621 crore, while profit after tax (PAT) was INR 326 crore. This consolidates their trend of robust financial performance, aiming to continue this trajectory into the next quarters.
The Edible Oil segment showcased exceptional growth, with revenue surging 21% year-on-year. This growth correlates to their strategic focus on sourcing key oils like soy, sunflower, and mustard which are adapting well to consumer preferences. The operational adjustments, notably merging food and oil distribution channels, facilitated better market penetration, allowing them to reach a commendable retail coverage of 7.8 lakh outlets.
Within the Food and FMCG sectors, revenue soared by 34%, benefiting from government contracts and sustained consumer interest. Despite the focusing on volume growth, the segment experienced relatively tighter margins due to heightened inflation pressures that restricted price increases. Nonetheless, the expectation is set to achieve a Food and FMCG turnover of INR 10,000 crore by FY '27.
While domestic operations thrived, challenges persisted in Bangladesh due to currency instability and operational hiccups. The company reported an operational loss of INR 51 crore in the first half, although with a new government in place, there are optimistic expectations for recovery in profitability over the next six months.
Going forward, Adani Wilmar anticipates maintaining double-digit growth in its Edible Oil segment, supported by prevailing stability in oil prices and sales strategies. The restructuring of their sales teams and distribution network in southern India aims to expand their footprint in this significant market sector. The commitment to digital engagement through e-commerce channels, growing the contribution to INR 3,000 crore, showcases proactive steps in adapting to changing consumer behaviors.
The management projected a strong finish for FY '25, with stand-alone EBITDA expected to exceed INR 2,100 crore, alongside traditional profitability levels returning. Investors should closely monitor how the company manages its Bangladesh operations and their strategy in driving continued growth in the Food and FMCG segments amid competition and inflationary pressures. Moving forward, the focus on their ESG initiatives will further solidify their market position and brand reputation.
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Ladies and gentlemen, good day, and welcome to the Q2 FY '25 Earnings Conference Call of Adani Wilmar Limited, hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Karan Bhuwania from ICICI Securities. Thank you, and over to you, sir.
Thank you, Michelle. Good morning, everyone. It's our pleasure at ISEC to host Q2 FY '25 results conference call of Adani Wilmar.
From the management, we have Mr. Angshu Mallick, Chief Executive Officer and Managing Director; Mr. Shrikant Kanhere, Chief Financial Officer; and Mr. Saumin Sheth, Chief Operating Officer.
I'll hand over the call to Shrikant sir for his opening remarks, post which we can open for Q&A. Thank you. Over to you, sir.
Yes. Thank you, and a very warm welcome to all the participants joining this call. Our sincere apology for starting this call a little late. The technology always keep testing all of us, and this is also one of the technology blips that we faced. So again, sincere apology for starting it late.
So we'll start with the presentation, which normally we do, just to give you an update on the performance of the company for the quarter 2. It straightaway goes to the results summary. I think quarter 2 was one of our best quarters in terms of all the parameters of the business. Volume grew by 13%, revenue grew by 19%. We had been able to post a very handsome EBITDA of INR 621 crore for the quarter and a PAT of INR 326 crore on a stand-alone basis.
When we look at the numbers on a consolidated basis, more or less similar picture, volume grew by 12% and revenue grew by 18%. The only difference between consolidated and stand-alone is the Bangladesh operations, which continue to be in stress, and a loss from Bangladesh operation is reflective in our consolidated number, the EBITDA at INR 613 crore and PAT at INR 311 crore.
When we look at the performance trends on a gross margins and EBITDA normalized, I think we are -- and particularly, if you look at last 4 quarters, we are very much in the range of our run rate, which we used to clock earlier. The gross margin is closely in the range of INR 1,700 crore quarter after quarter and EBITDA in the range of INR 550 crore plus. The last 2 quarters were excellent in terms of the EBITDA. In both the quarters, we have been able to post the EBITDA of INR 600 crore plus.
On a segment basis, Edible Oil grew by 21% in terms of revenue. Food and FMCG grew by 34%. And when we look at on the half yearly basis, revenue -- Edible Oil revenue grew by 15% and Food and FMCG grew by 37%. Industry Essential, there is a de-growth of 9% and 5%, respectively, in quarter and H1, primarily driven by the lower oilseed business or rather, I would say, de-oiled cake business in soya bean and mustard, where management took a call not to get into the business, particularly because there was no parity in the business. And that's the reason why this de-growth in Industry Essentials. Otherwise, all the other parameters of this business segment are normal.
In terms of the segment results, again, for the quarter, Edible Oil delivered a segment result of INR 373 crore as against INR 398 crore, up sequentially, first quarter, which is Q1 '25 and against a loss of INR 195 crore in Q2, '24. So it's a complete turnaround as far as the Edible Oil is concerned.
Food and FMCG, as we always keep saying that it still continue to be close to EBITDA neutral kind of business, given the fact that our entire focus is on growing the market share and growing the volume.
Industry Essential at INR 56 crore versus INR 56 crore of last year, more or less flattish, giving a total PBT of INR 402 crore for quarter 2 and INR 418 crore for quarter 1. Put together for H1, the PBT of INR 820 crore, which is ever highest for the company.
If I have to talk about, quick, on the company's level highlights, volume grew by 12%. We clocked a revenue of close to INR 14,500 crore for the quarter 2. We've also posted ever highest half yearly EBITDA of INR 1,232 crore with Q2 EBITDA of INR 613 crore. Alternate channel continued to be growing very fast for us. The alternate channel revenue crossed INR 3,000 crore, in which the e-commerce is showing a substantial growth.
Branded product sales through HoReCa channel, which is something which we are focusing more is also going very well. It grew by 40% year-on-year. And Bangladesh operation, as I said earlier, continues to be in stress. We lost INR 51 crore in H1; however, things have now started improving after the new government taking over in Bangladesh.
More particularly Edible Oil highlights. Edible Oil recorded a volume growth of 17%, so a very impressive growth for Edible Oil, 17%. High double-digit growth is very encouraging for us, and clocked a revenue of close to INR 11,000 crore, which is 21% growth year-on-year.
This entire growth in Edible Oil is driven by soya bean, sunflower and mustard oil, which is our flagship oil. The other oils also grew, but I think the growth in these 3 oils were significantly higher than other oils.
This is the second consecutive quarter where Edible Oil has been able to deliver such kind of performance with PBT of INR 373 crore, and for last 4 quarters, the trailing 12-month PBT of close to INR 1,300 crore in Edible Oil. We continued our focus on the regionalization in a sense we are trying to launch products, which are more relevant and more near to the regional taste and regional preference and in that we launched a Kachi Ghani Mustard Oil for the Hilsa Festival in West Bengal, and that's one of the way we're trying to ensure that the customer stickiness continues with the Fortune.
When we talk about the Food and FMCG highlights, again, an impressive story here. And as we always said that the focus of the company remains on the food basket, where current strategy is to grow the volume, grow the market share, reach more and more markets. This segment grew by 34% -- revenue grew by 34% in Q2, close to INR 1,718 crore of turnover, underlying volume growth of 33%, which is very impressive.
This 33% is inclusive of a government-to-government sale, which is rice sold to government agencies for the export, which is not a very sustainable business in a sense, we are not sure whether this will be there next year, yes or no. So, therefore, if we normalize this business also, the underlying volume growth in food is 21%, which is quite handsome. So we are continuously growing plus of 20% in food.
Wheat Flour business, it is one of the focus business -- sub-business segment in the food continues to witness a very strong growth, and we are seeing an encouraging results, whereby the stickiness of consumers we can track. There's very strong growth in other food products also. So we have besan, pulses, soya nuggets, sugar, poha, soap, all have been able to post a strong double-digit growth year-on-year. And the branded sales of these only products has already crossed INR 1,500 crore on a last 12-month basis.
We have been increasing the retail penetration for the food. So that's the strategy also to how can we leverage the Edible Oil distribution for the food. Now at least one of our food product is now reaching over 90% of the outlets that has been selling our Edible Oil. So to that extent, we have been able to leverage our Edible Oil distribution network, but I think job is still not full done. Our efforts will be continuously on to ensure that how we can spread the distribution for our Food and FMCG segment.
The management is pleased to announce an ESOP scheme to reward the employees. This is a scheme which we were working for quite some time. We got an approval from the Board yesterday. It will, of course, follow all the regulatory approvals which would be required. It will go through a shareholder approval and then will go through the regulatory approval before we can formally launch this scheme.
The scheme, of course, is directed towards retaining a good human capital in the company and which will, of course, try to ensure that we have better people retained in the organization for growth of the company.
This scheme will have 1% of the pool, 1% of issued shares. Issued and subscribed shares would be the pool for this scheme. And this will be vested in a period from 2 to 4 years from the date of the grant to -- for encouraging long-term commitment and the performance from the employees.
So on Edible Oil continues to be a cash cow for the company. That is what we kept saying for last couple of years. And this trend continues. The Edible Oil grew strongly, and it contributed to a stand-alone EBITDA of INR 603 crore in quarter 2 '25 versus INR 604 crore of quarter 1 '25. So close to INR 1,200 crore of EBITDA has been contributed by the Edible Oil. Edible Oil volumes have been growing in high single-digit, robust profitability in last 4 years.
When we talk about the Food, I think volume growth is very, very impressive for us, half-yearly topline growth of 34% in terms of volume and 41% in terms of revenue. Stand-alone EBITDA is close to the breakeven. And that is what the strategy is by design, the EBITDA levels are low in the Food and FMCG segment as an entire focus of the company remains on the volume and topline growth.
Capacity utilization is decently placed at 57%, giving an indication that we have enough capacities in place to accommodate the future growth that this segment will see.
Wheat Flour market share is continuously going up. As per the IMRB MAT '24, market share of Wheat Flour on MAT 12 months basis in September '24 went up to 5.25% versus 4.42%, so close to 1% gain in the market share. The similar kind of growth we have seen in Edible Oil also. I forgot to mention that in the previous slide. As per the IMRB, the Edible Oil market share has also gone up from 16.12% to 16.2%.
The market share, which has been reflected on this presentation is from the IMRB, which tracks the market share basis the household penetration rather than the retail penetration, which AC Nielsen does. So this time company has used this source, and we will -- henceforth, we will continue to use this source as to track our growth as far as the market share is concerned.
On a general trade distribution, we continue to grow. So now we are close to 7,70,000 retail outlets, which have been reached directly by the company. And in terms of rural town coverage, we are now plus of 36,000 of towns. Of course, our target of reaching 50,000 towns by March '25 continues, and we are focusing on that, and we are very sure that we will achieve this target by March '25.
Alternate channel remains a very good story for company. It continues to grow faster than general trade. And within the alternate channel, the e-commerce is a very, very impressive story. So alternate channel now contributes close to INR 3,000 crore of revenue for the company basis last 12 months. And overall growth for the alternate channel is 14%, in which e-commerce grew by 27% and Quick commerce, which is most talked about channel today in India, and most of the FMCG companies are certainly trying to leverage more and more on this, grew by 46%. So that's the growth.
And our internal data suggests that we enjoy a very, very handsome market share on all these channels, and it's a very strong market share, which we have been able to see. And we are doing all sort of interventions to ensure that this channel for us continues to grow. And we are using AIs, and we are using all the insights, which are available to us to see how we can leverage more and more on this particular channel.
So HoReCa channel, which is another alternate channel for us, which we started 2 years back is growing very fast. 40% plus kind of year-on-year growth and now contributing close to INR 500 crores of revenue basis last 12 months.
When we look at segment-wise profitability, the entire profitability was led by Edible Oil and Industry Essential, given the fact that Food by design is EBITDA neutral for us. Total stand-alone EBITDA, including other income of INR 678 crores and for the H1 EBITDA of close to INR 1,350 crores.
And so, therefore, overall, when we look at the financial performance, quite a significantly better numbers to reflect as compared to what we were able to post last year. Last year was one-off kind of situation, which was explained very well in the market. So against loss of INR 125 crore in last H1, we were able to post stand-alone PAT of INR 649 crore. Consolidated PAT on Q2 basis of INR 311 crore against INR 131 crore loss of last year.
The company continues to do a lot of engagements on the digital platform to see that we continue to connect with the customers focused engagement with consumer on product benefits offerings. And most of these connects are also regionally -- region-specific also. It also connects very well with the consumers basis, the various festivals, which we have, that India is celebrating.
So these efforts and the targeted ATL activations continue, the multiple campaigns with targeted messagings. And we could see the benefit of all these campaigns in stickiness of the consumers for the Fortune brand.
So if I have to summarize the key takeaways for quarter 2 '25, if I have to actually put it into one line, I think the demand, the stability in the prices and the brand equity, all 3 major parameters actually work for us, not only in the quarter 2, but also for the quarter 1, which is reflective on our results, very handsome volume growth of 12%.
Food and FMCG has crossed INR 5,800 crore of turnover on the last 12-month basis. So, therefore, our -- we are almost reaching -- we're quite sure that we will have that target of INR 6,000 crore plus of turnover for the Food for the financial year '25, and we are committed to see that we reach to the Food and FMCG turnover of INR 10,000 crore by FY '27.
Stand-alone EBITDA of INR 2,100 crore plus on last 12-month basis, which is suggestive of the fact that our standard run rates are back, and we should be able to deliver better numbers for FY '25.
Distribution, we continue to work. Channel growth and alternate channel, I think I already spoke of. ESG is something which we keep continuing. AWL is now included in FTSE4Good Index Series. Besides that, quickly on ESG, also company continues to work on various ESG initiatives, including water conservation, installation of solar plant capacity for green energy, and of course, rainwater harvesting and a sustainable procurement that is something agenda-driven, and we have been continuously working on this direction.
So this is all from my side as far as the presentation is concerned, to give you a quick update on the quarter 2 and H1 numbers. Now I request moderator to open the floor for question and answer. We would be happy to take them.
[Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama Institutional Equities.
Congrats on very good set of numbers. My first question is on Edible Oil. If I see your quarterly run rate for the last 4 years, 3 years, it was almost stable. Hardly any movement in terms of the 1 million tonne. This year, there is a spectacular movement. Is there any one-off? Is there any seasonality, festival-related impact or any modern trade or e-commerce activation? Or is it because of all this volatility? Whenever any pricing goes up in FMCG, generally, the market leader gains market share, and we have seen, obviously, sharp inflation in the last 3, 4 months. Is that driving that?
I think in quarter 2, we had seen a very steady prices barring that last 15 days when the duty hike was announced around 14th of September. But if you look at the entire quarter, the quarter was steady. So whenever the commodity prices are steady, the brands always do well, and Fortune as a brand has been doing well. That is one.
Two, over the last 2 years, we have made certain structural changes in our distribution factor. One of them has been to merge the food and oil distributors. Earlier, they were separate. So from January '24, we started that exercise, and we merged all the distributors. That gave us strength because Edible Oil distribution was far stronger than Food.
Second is that we had a separate sales team also. So that also we started merging, and by January -- we could close that by March. So we started gaining certain advantage of unified sales force and unified distributors. That is 2 things.
Third is that rural markets, we have surely pushed for adding more towns, and we are at 37,600 almost. So all this has inch by inch helped us to grow the distribution. And that is why we could reach 7.8 lakh retail outlets directly. And I think these are some of the reasons.
Apart from this, we had good institutional sales, particularly from ITC, Parle and all that because they also -- there also sales picked up in July, August, September. And we are always a preferred supplier because we have pan-India production setup. So it's very easy for them to buy from any of the location at any of that plant. So that gives us an advantage over others, which we obviously have taken. So all put together, the frying industry, baking industry, they have done well, and our retail distribution has done well.
And sir, ex of B2B, you said ITC, Parle, et cetera, have seen a good offtake, which I think if you could confirm, is it largely for biscuits? Second is B2C part would have seen what 12%, 13% growth?
Almost that, little growth because 17% overall, but around PAT should be around 11% or so.
Understood. And sir, second question is on the other big portion of your business. What I'm surprised is Food and FMCG has seen only 1% kind of pricing growth. Currently, obviously, everywhere there is a reasonably good inflation. So is there a downtrading impact? And second, why has branded rice not done well? What is the issue here?
Sir, please stay connected. The management's line has been disconnected. While I reconnect them, please stay on the line.
Ladies and gentlemen, the management's line has been reconnected. Over to you, sir. Abneesh sir, you may please proceed with your question.
Sure, sure. So next question is on Food and FMCG. So here if I see, your pricing growth seems only 1%, which is surprising given there is a broad-based inflation everywhere. If you could tell us if there is some downtrading or mix -- adverse mix? Second is, why has branded rice not done well?
Okay. First part is that when you look at the total Food business, the growth on revenue has not grown only because the G2G business of rice is a lower priced rice. And that has contributed to topline, but value-wise, it has not given us that value because cheaper variety of rice is exported through the G2G route. That is one.
Two, branded rice has not grown. Possibly, there are a couple of reasons. One of them has been that the basmati rice prices have come down drastically in the last 1 year by around 15% or so. So retailers and wholesalers are trying to sell whatever stocks they have in their hand because they are expecting, and we know for sure, that this year's basmati crop is going to be bigger than last year, and the prices are already, the new crop that has arrived in the market from September end onwards, are almost 10% to 15% cheaper than last year.
So retail and wholesale both knew that -- even institutions, I would say, those who buy regularly from us, wanted to consume their stock first and then buy. So that is one of the reasons why didn't do well. But we should be in a position to start picking up from October onwards.
Sure. Last quick question on Bangladesh. The pricing control, is it over? And second, in terms of the losses, which has risen, so when do you see profit coming because even in Q1, there was a loss? So what is the issue? Q1, there was no big problem in terms of the law and order. And third, of course, is because of the way currently things are, any plans for a different strategy in Bangladesh, say, in terms of new product launches or, say, aggression or, say, localization? Anything you would need to change in Bangladesh?
See, Bangladesh is, of course, I think we all know what's happening in that country for the last 2 years. First, last year went bad because of the currency issue. And I think last 6 months were bad because of the government turbulence. And I think we -- now we have a new government in place. A lot of policy corrections have been now -- we can see in this particular country.
We are only focusing on the branded sale in that country. And our expectation, of course, is that in the next 6 months, I think things should improve, but we are not very optimistic, at least for this financial year. From the next financial year, our expectation is that things should fall in place. We are losing basically money of not recovering the full fixed cost, actually, if you really ask me. On a contribution level, we have been able to cover all the variable costs, and that's how the situation as of now today in Bangladesh.
Once more stability comes in -- I think the currency issue has more or less now been resolved. In a sense, the currency is now stable at 120, 122 level. It's not going up. The government is consistently trying to keep the inflation in -- of course, they have not yet been able to do that. So -- I mean, day before yesterday, they raised the bank rate to 10%. It is the first time in the country that the bank rate is more than the inflation rate. So those all steps are being taken. We are hopeful that we should be able to do better in the next 6 months.
On your question, the new product launches and all that, I think that right now, this is not a time in that country to take such kind of initiative. We will wait and watch for another 3, 4 months, and then, we'll take a call on whether we really want to do anything on the brand perspective.
The next question is from the line of Harit Kapoor from Investec.
Congrats on a good set of results. I just wanted to ask firstly on this...
I'm sorry, sir. Your audio is not clear. May I request you to kindly use your handset, please?
Yes. Is this better?
Yes sir, please proceed.
Yes. So my first question was really on the increase in duties. Just wanted to make sure -- just understand how this is going to play out in the market and how it is going to play out from an inventory perspective for you also going into Q3. I understand that there is a certain amount of inventory, probably 30, 40 days of inventory that you always have in store -- sorry, in-house. So with this duty increase, just 2 or 3 factors, one is, is there a positive kind of mark-to-market benefit on inventory gains coming in, in Q3?
Secondly, how has it landed in the market? Have all the prices now been adjusted upwards? And thirdly, do you expect any kind of demand impact on account of the price increase? Those are my questions on the duty.
Okay. First is that the duty hike was due for a long time, and there has been a lot of requests from the association -- trade association, farmers' lobby, everybody that local oilseed prices were selling lower than MSP and that government should help increase the prices of edible oil, which were surely lower level. And the government did intervene on 14th of September. That is one.
As per our risk management policy, we have certain policy guidelines under which we manage our inventory. So we don't overdo or we don't play down. We have already seen how we were affected in Q1 and Q2 last year. So there has been certain changes in our risk management policy, so which we have adhered to.
In Edible Oil, historically, whenever there is an increase in price, whether because of duty or any other reason, that is normally passed on. And there is always a lag of 10, 15 days because inventory pipeline, inventory at distributor level, retail level, even at company warehouses, are there to take care of 15, 20 days. So that normally is -- keeps the Edible Oil stable for some time. And then slowly, the market starts reacting towards the new price.
And historically, that is how it has been always passed on by the manufacturer because our job is to buy at INR 100, make a margin and sell it. That is how everybody does, and we always do weighted average. So when the duty hike was there, obviously, we had our incoming stocks at a higher duty, so averaging out and then pricing it and selling. That is how the entire industry does, and we have also done it like that.
And sir, just to follow up on that, has that process now been completed in the market because it's been about, say, 40 days since the pricing -- since the import duty increase happened? So has that now largely been passed through?
And I know you have risk management processes in place, but given that you would have had some older stock at lower prices, would this result in some kind of a gain coming in into Q3, at least on the inventory side, while not structural, but could it be a onetime gain?
See, one is that the pass-on of the hike in duty has already been done, and that most of the Edible Oil manufacturers have been selling at the duty. What more has happened is that the international has gone up more, which we expected that it might come down. So that has added to the pricing pressure. So everybody has passed on whatever they had. And there can be some gain, but not something great windfall gain. Small gains can be there, only to the extent of the risk management policy, what it allows. So we are not looking at that as a great anything. We are more optimistic on the next quarter's marriage season demand and how that spans out. So hopefully, next quarter should be better.
Understood. Very clear, sir. Just on the Edible Oil piece again, obviously, the first half has been excellent. It seems like a significant amount of market share gain, which has continued to come through driven by your distribution expansion as well as merging of distribution as well as regionalization. I just wanted to get a sense of do you -- ex the B2B business, which has also done very well, on the B2C part, do you expect this kind of -- last 5 years, the Edible Oil growth rates have been like -- the volume growths have been 5 -- almost like 7% CAGR. And this year, obviously, things have been even better. Do you expect that this above-average kind of performance holds on for going forward for the next few quarters, given that your own initiatives have been kind of fast tracked over the last 12 months or so?
See, our initiative has always been to create more and more reach to the consumer. We are an essential commodity. Consumers don't wait for a brand. They just go and buy the brand, whatever is available. And top of the mind if it is Fortune, then Fortune must be available. So the key to grow sales has always been distribution. That is one.
Two, historically, we have been poor in South, and we have always said that South is somewhere we can do well. Let me tell you, 34% of branded edible oil is sold in South, which is the largest branded oil market, and our penetration is surely poor. So we know this -- that if we do well there, we will continue to grow for years to come, not one quarter. So our focus is there, and we are putting our good team there, and we are working hard on it.
So going forward, I think distribution-led growth will continue. That is one. We are also looking at out-of-home consumption because out-of-home consumption is going to grow in days to come. And we have a team, HoReCa team, which is working on it. There also, we have some option of selling higher quantity, mainly 15-kilo tins because the hotels buys 15-kilo tins branded, of course. So there, we are pushing. So looking forward, if not 17% or like this, because these are not always a regular thing, but yes, double-digit growth is what we expect.
Great to hear. Sir, last question was on Food and FMCG. So this year, you also had first half, there has been some -- the government order-led growth, which I think would continue probably this year, but may not be a phenomenon going forward. And also, I think you've seen some inflation in prices. Also, competitive intensity in flour has been -- wheat flour would have been pretty high. I just wanted to get your sense on how do you see the margin kind of claw back starting again. And when do you see that kind of playing out? Because this first half of the year, the margins have been a little bit lower on this segment. So when do you see that buildup kind of happening again, just wanted a timeline from your perspective?
You are right. There has been stress on the Food business, both rural and urban, because of the high inflation. And you can't pass on the way you can pass on the edible oil prices to the consumer. It is cluster. But in case of wheat, rice, besan, sugar, very difficult to pass on the full hike immediately. It takes a little time. That is one.
And second, consumers are relatively a little more conscious on these products. Edible Oil is still much more branded, 80% is branded. So consumers either way buy branded. But when it comes to wheat flour, rice and all that, consumers always have the option to buy those where they get it cheap because 5% GST is not there, INR 3 or INR 4 packing cost is not there, retailer's margin is lower. So all this gives a lot of support to the consumers.
So we can't increase the price so much. So that pressure always remains in this type of product. But going forward, I think the inflation might be better off. Wheat production next year is going to be better -- reasonably better because of the good monsoon this year. And dal, pulses, also, will be good. Rice is -- already it is 10% down. So I think overall, food inflation will normalize, and we will see good growth in FMCG Food business as well as a little bit increased margin.
Those are my questions. I wish you all of best.
[Operator Instructions] The next question is from the line of Megh Shah from Prospero Tree Financial Services.
Congrats on a good set of numbers. I just have a one simple question. The Edible Oil segment is -- has been making profit since the last 3 to 4 quarters. So are these profits sustainable? And what are our sustainable margin range EBITDA or PBT, anything is fine, for this segment?
See, the Edible Oil business, of course, is a flagship business of the company. We have been in this business for last more than now 24 years. And we have been #1 market player in the country with a strong market share. I think this business will continue the way it is performing today.
I think we get a little bit drawn by the last year's quarter 1 and quarter 2 numbers, but the numbers we have been able to focus on last 4 quarters for Edible Oil are the sustainable numbers. There might be plus/minus a little bit because, as I said in my commentary, I think last 2 quarters the demand, the brand equity, and of course, the stability in prices all work for us. And any one of it not going well sometimes have got an impact on the margins. But more or less, this is the range which we should be able to deliver on Edible Oil, which we have been delivering for last trailing 4 quarters.
[Operator Instructions] The next question is from Utkarsh from [ DSP Broking ].
Sir, I also belong from the edible oil industry. So I would like to point out some issues which happened from Adani's side, like when you buy mustard seed from like the mandis or anything, sir, they send you -- can I speak in Hindi, sir?
Yes, yes, please.
Sir, for example, [Foreign Language]. It should be rejected. So sir, [Foreign Language], they are corrupt, sir. They charge [Foreign Language], and they pass the [Foreign Language]. So, sir, as a shareholder of AWL, I don't like these things. Sir, I would like to -- like you should monitor what's happening at the warehouse level.
No, sir, your point is well taken. We will certainly look into it. I think this call is more to discuss on the performance of the company for the Q2 and H1. But having said that, you are trying to raise an operational issue, I think well noted, and we will certainly look into it.
Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Yes. So thank you, everyone, for joining the call. And it's our pleasure to present before you the -- one of the best set of numbers for Q1 and Q2 and for the H1. And we are quite hopeful that we'll continue this stride as we go forward. Thank you very much, and keep tracking us and keep writing to us in case you have any queries. Thank you.
Thank you from my side also to everyone. I'm sorry for little delay in start. Thank you.
Thank you, members of the management. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.