Modi Naturals Limited announces Q2 & H1FY23 Results

H1FY23 Consolidated Performance Highlights:

- H1FY23 revenue stood at Rs 193.5 cr

- Revenue reduced on account of seasonality and reduction in oil prices in Q1 which got extended into Q2 in the bulk oil business leading to a soft performance for H1FY23. Q1 & Q2 are typically lean quarters seasonally. This was coupled with the stock limits imposed by the government earlier this year to cool oil prices.

- EBITDA for H1FY23 was Rs 6.5 cr

- PAT for H1FY23 was Rs 3.4 cr

- Profitability in Q2 was affected due to stock inventory valuation loss of Rs 1.96 cr owing to the sudden reduction in oil prices in Q2 as Indonesia re-opened their export causing a temporary glut

- Prices have risen again to the earlier levels in Q3FY23, and this should be reflected positively going forward

Recent Developments

Consumer Division

Oil Category

- Earlier this year, to cool the prices, the government, imposed stock limits for retailers and wholesalers due to extreme inflation in edible oil following the geopolitical situation

- This resulted in channel de-stocking which affected the top line for oil in both bulk and consumer division. This continued in Q2 as well

- Finally, large retailers and wholesalers have been exempted from these limits starting November

- We should see the partial impact of this positive decision in Q3FY23 and full impact in Q4FY23

Food Business

- Food business has grown by 82% YoY in H1FY23, 21% QoQ and it is still scaling up with distribution expansion every quarter

- Recently, started food business with a few more large retail players like Spencer's which will reflect in numbers in the coming quarters

- Profitable at the operating level for all food segments

- Extending the range of ready-to-cook pasta and introducing new shapes, such as macaroni and spaghetti

- With a commitment to food innovation, launching a one-of-its-kind multigrain pasta with the goodness of four grains in the premium category

- Under PIPO brand, we are extending our product portfolio and getting into the ready-to-eat space with our line of flavoured roasted peanuts

- These ready-to-eat peanuts will be available in five flavours, including periperi, BBQ, heeng-jeera, and others

- Taste bomb, PIPO's sub-brand, is being separately launched in the instant masala/seasoning category, with six varieties including Magic masala, pasta masala, peri peri, Oregano, Italian herbs, and Tandoori

- In Peanut Butter, we are creating a vertical segmentation wherein we are launching a product specifically targeted for children in the age bracket of 4-13 years.

- Additionally, a peanut butter in chocolate flavour will be made available under the brand Oleev Junior

Ethanol Business

- Construction of the distillery in full swing

- Most of the plant and machinery has arrived on-site and erection work is in progress

- Commissioning pushed back to Q4 FY23 due to late monsoon rain

- Expenditure at the end of Q2 on the project is Rs 55.3 cr

"The performance for this quarter and half-year ended FY23 was relatively soft owing to several macro-economic factors impacting level of operations, mainly attributable to the reduction of oil prices in our bulk oil business and the stock limits imposed by the government. However, the effect of these temporary disruptions is now waning with recent positive developments. Q1 and Q2 have historically been our weaker quarters owing to the seasonality in our business, but with a steady ramp up Q3 onwards, we are positive of a stronger second half of the year.

Additionally, the demand seems to be coming back to normal, with relaxations given to large retailers and wholesalers, which when coupled with the gradual but certain rise in prices, is a big and positive sign as we go forward. Construction of our distillery is also back on track and is expected to start contributing from the end of this financial year. On the food business, we continue to extend our offerings and stick to our commitment towards food innovation, which will yield results and create a robust product portfolio strengthening our brand."

Shares of Modi Naturals Limited was last trading in BSE at Rs. 207.70 as compared to the previous close of Rs. 211.00. The total number of shares traded during the day was 14448 in over 129 trades.

The stock hit an intraday high of Rs. 214.20 and intraday low of 202.70. The net turnover during the day was Rs. 2999868.00.

Source : Equity Bulls

Keywords

ModiNaturals INE537F01012 Q2FY23 H1FY23 ResultUpdate