Palm oil exports were recently banned by Indonesia. They did this to alleviate shortages and lower the country's soaring palm oil costs. India imports the most palm oil. As a result, this circumstance is projected to boost the Indian edible oil industry. With the restriction on palm oil exports, prices for all edible oils such as sunflower, mustard, and soy oil may rise. This would help Indian edible oil producers increase their profits on unsold inventories.
Here's a rundown of the best edible oil stocks that are most likely to prosper in the present situation:
Marico
Coconut oil, hair oils, edible oils, hair care, and men's grooming items are among the company's diverse product offerings. The edible oil segment accounts for around 66% of company sales. In the super-premium refined oil class, Marico's edible oil brand Saffola has an 83% market dominance.
Its edible oil business has continuously increased in value and volume over time. This is mostly due to shifting consumer tastes toward healthier cooking and increased home consumption during the epidemic.
Marico's revenue has increased at a compound annual growth rate (CAGR) of 3.1% over the last three years, owing to development in its edible oil sector. The net profit increased at a CAGR of 2%. Its sales increased by 13% year over year in the most recent quarter. As a result of inflationary pressures, net profit only climbed by 1%.
By leveraging its successful Saffolalife campaign and extending its penetration in existing regions, the company plans to expand its edible oil business to new markets.
Ruchi Soya
The firm is the country's major manufacturer and marketer of edible oils, with a presence throughout the value chain. Ruchi Gold, Nutrella, Sunrich, and Mahakosh are among the company's diverse range of products.
Its revenue has increased at an annual rate of 8.4% over the last three years, owing to increasing volumes brought on by new product introductions.
The company's sales increased by 40.8% year over year in the most recent quarter, while net profit increased by only 2.9%.
Agro Tech Foods
Edible oils, ready-to-cook snacks, ready-to-eat snacks, and spreads and dips are among the company's broad product offerings. Sundrop and Act-II are two of the company's brand names.
Edible oils account for almost 60% of Agro Tech Foods' income. In the refined edible oil area, it has a 13.8% market share. Sundrop, the company's edible oil brand, has a strong brand recall and is a well-known name in the edible oil market.
Agro Tech Food's revenue has increased at a CAGR of 2.7% over the last three years, however net profit has declined at a CAGR of 3%, owing to rising input costs. The company's revenue has been consistent in recent quarters. However, net profit was down 17.3% year over year.
Gokul Agricultural Resources
The company's main business is producing edible and non-edible oils, as well as other related items. Vitalife, Makeh, Zaika, Pride, and Puffpride are some of Gokul Agro's brands.
Gokul Agro also has a large distribution network that covers clients in 20 different states. Its goods are exported to a number of nations, including the United States, China, South Korea, and the European Union.
The company's revenue has expanded at a CAGR of 22.6% over the previous three years as the size of operations has grown. Because to decreased borrowing costs, net profit increased at a CAGR of 60.1%.
Its sales increased by 12.8% in the most recent quarter. Year over year, net profit increased by 106.4%. The corporation intends to concentrate on cutting expenses, enhancing product quality, and entering new markets.
Adani Wilmar
Adani Wilmar is a joint venture between Adani Group and Wilmer Group.
The firm is a significant consumer goods company that sells key culinary products such as edible oil, wheat flour, rice, legumes, and sugar. Its edible oil division generates 65% of its sales, and it sells its oil under the Fortune brand.
In the edible oil area, the corporation has an 18% market share. Kings, Jubilee, Alpha, Aadhar, Raag, Bullet, and Opportunity are some of the company's other brands. The firm also supplies to over 50 countries and is India's top castor oil exporter.
Because of the rise in the edible oil industry, Adani Wilmar's revenue has increased at a CAGR of 8.8% over the previous three years. Due to decreased borrowing costs, net profit grew by 21.3%.
The company's sales increased 41 % year over year, but net profit increased 66%.
The firm intends to expand its market share in the future by expanding into South and West India.
Indonesia has prohibited the export of palm oil in order to regulate the country's soaring palm oil prices. The action may cause palm oil prices in Indonesia to decline, but it may cause prices in India to spike.
This provides an opportunity for the country's current edible oil industries to expand their crushing and refining capacity for oilseeds.
As a result, edible oil stocks may be a solid long-term investment.
However, before investing in any of these stocks, it's crucial to look at their fundamentals and pricing.
