Top Edible Oil Stocks in India: Did you know that on average every Indian consumes 19kg of edible oil each year? Whether you go to a restaurant, a Dhaba, or even cook at home, you’ll find that most dishes require some amount of edible oil. In short, there is a huge demand for edible oils in India.
Indonesia and Malaysia together account for about 85% of the global palm oil production, and India is one of the largest importers. You might be surprised, but India imports a huge chunk of edible oils of all kinds. Domestic production doesn’t match the demand, but thankfully the budget brings some relief to the industry.
In this article, we take a look at top edible oil stocks in India, a little bit about the edible oil industry and the impact of the budget and the Russia-Ukraine crisis on the edible oil sector. Keep reading to find out!
Table of Contents
Edible Oils in India – Industry Overview
Edible oils include palm oil, groundnut oil, mustard oil, sunflower oil, olive oil, soybean oil, coconut oil and more. India is one of the largest producers of oilseeds in the world. Rising urbanization rates, increasing disposable incomes, changing dietary habits and the growth of the food processing sector represent a few key factors driving the demand for edible oils in India.
In 2021, India imported 135.31 lakh tonnes of vegetable oil. This has been the lowest amount imported for the second time in the last six years. However, on average, two-thirds of the requirement of edible oils are imported to India.
The Impact of Budget 2022 on Edible Oil Stocks in India
The Union Budget was announced on February 1, 2022. In her budget speech, Finance Minister Nirmala Sitharaman announced that a scheme will be implemented to reduce our dependence on the import of oilseeds and a rationalized and comprehensive scheme to increase domestic production of oilseeds will be implemented.
The financial outlay of ₹1,500 Cr for increasing oilseed production capacity is likely to be adequate to have a meaningful impact and will help to reduce India’s dependence on edible oil imports. ₹600 Cr has been allocated to encourage oilseed farming and Rs. 900 Cr has been allocated for oil palm.
The Impact of the Russia Ukraine Crisis on Edible oil Stocks in India
India imports 17 lakh tonnes and 2 lakh tonnes of sunflower oil from Ukraine and Russia respectively. The ongoing war has led to a disruption in the supply. It hasn’t impacted the industry, but distributors started gaining higher profits. The prices of edible oils have increased by 50-70% over the past few months.
As a result, about 24% of Indian households cut down on edible oil consumption and 67% are paying more for it as prices of cooking oil soared in the past few months. Further, 29% of households switched to cheaper alternatives.
Top Edible Oil Stocks in India
Let’s take a look at some of the top edible oil stocks in India:
Edible Oil Stock #1 – Adani Wilmar Limited
| Particulars | Values |
| Face Value (₹) | 1 |
| EPS (₹) | 0.00 |
| Debt to Equity | 0.58 |
| ROE (%) | 22.25% |
| Current Ratio | 1.04% |
| Market Cap (Cr) | 73,431 |
| Promoter’s Holdings (%) | 87.94% |
| Dividend Yield (%) | 0.00 |
| Stock P/E (TTM) | – |
| Net Profit Margin | 1.76% |
Adani Wilmar is the market leader in the edible oil industry. It is among the top 10 consumer FMCG companies in India and its products are offered under a diverse range of brands. This joint venture between the Adani Group and Wilmar group was incorporated in 1999 and its shares got listed on February 8, 2022.
Its edible oil products are offered under its flagship brand called ‘Fortune’ which offers soyabean oil, palm oil, rice bran oil, mustard oil blended oil, cottonseed oil and sunflower oil. Apart from edible oils, they offer essential kitchen commodities like wheat flour, pulses, rice and sugar. However, edible oils account for about 65% of their revenue.
The company has 22 plants, 10 crushing units and 19 refineries across 10 states in India. It has 5,590 distributors who cater to over 16 lakh retail outlets. It has 22 manufacturing units and a reach of 91 million households. It exports edible oil products, FMCG and industry essentials to more than 50 countries.
Adani Wilmar raised about ₹3,600 crores through its IPO. The shares got listed at ₹227 apiece on the NSE, slightly lower than their IPO price. However, they surged to close with a gain of 15.3% on their listing day. Over the last few months, the shares gave multibagger returns of 286.75% to its investors as they reached a 52-week high of ₹ 878.00 apiece!
One of the main reasons for the surge in the share price of the company was the ongoing Russia-Ukraine Crisis. Edible oil prices were spiralling and Adani Wilmar already had high levels of inventory. Therefore, it could make huge profits due to increased margins.
Adani Wilmar acquired packaged foods brand Kohinoor from American giant McCormick at an undisclosed amount in May 2022. This includes the acquisition of umbrella brands like Charminar and Trophy which together were valued at about ₹ 115 crores.
Edible Oil Stock #2 – Gujarat Ambuja Exports Limited
| Particulars | Values |
| Face Value (₹) | 1 |
| EPS (₹) | 19.21 |
| Debt to Equity | 0.09 |
| ROE (%) | 22.67 |
| Current Ratio | 2.88 |
| Market Cap (Cr) | 7,150 |
| Promoter’s Holdings (%) | 63.84 |
| Dividend Yield (%) | 0.19 |
| Stock P/E (TTM) | 16.22 |
| Net Profit Margin | 7.18 |
Gujarat Ambuja Exports Limited (GAEL) was incorporated in 1991. It is involved in the manufacturing of edible oils corn starch derivatives, cotton yarn, and feed ingredients. It has a long-term growth strategy in the Agro-processing sector.
Its clients include ITC, HUL, Dabur, Asian Paints, Patanjali, Colgate, Nestle, Mondelez, Parle, Biocon, Cargill India, Heinz and more. It has India’s second-largest soybean crushing capacity of 4,600 TPD. Its capacity for edible oil is 1200tpd.
Edible Oil Stock #3 – Ruchi Soya Industries Limited
| Particulars | Value |
| Face Value (₹) | 2 |
| EPS (₹) | 24.48 |
| Debt to Equity | 0.9 |
| ROE (%) | 18.32 |
| Current Ratio | 2.13 |
| Market Cap (Cr) | 36,145 |
| Promoter’s Holdings (%) | 80.82 |
| Dividend Yield (%) | 0.00 |
| Stock P/E (TTM) | 42.43 |
| Net Profit Margin | 4.17 |
Ruchi Soya Industries Limited is the largest manufacturer of edible oils in India. It was acquired by Patanjali Ayurved in 2019 for ₹4,350 crores. The company was a part of the Ruchi group. It manufactures and sells food products including cooking oils, soy foods and bakery fats.
Its umbrella brand Mahakosh sells oils like groundnut oil, Ruchi Gold Palmolein, cottonseed oil, and Ruchi Gold mustard oil. Under its brand Nutrela, it sells soyabean oil, mustard oil, sunflower oil, groundnut oil and rice bran oil.
Since its incorporation in 1986, Ruchi soya has evolved as a farm to fork edible oil business in India. Today it features among the top FMCG players and has one of the largest palm plantations in India.
It owns 22 manufacturing units with a refining capacity of over 11,000 tonnes per day. Moreover, it has access to exclusive procurement rights to over two lakh hectares of land in India that can be used for palm oil cultivation.
Edible Oil Stock #4 – Agro Tech Foods Limited
| Particulars | Values |
| Face Value (₹) | 10 |
| EPS (₹) | 10.61 |
| Debt to Equity | 0.00 |
| ROE (%) | 7.67 |
| Current Ratio | 2.56 |
| Market Cap (Cr) | 2013 |
| Promoter’s Holdings (%) | 51.77% |
| Dividend Yield (%) | 0.36 |
| Stock P/E (TTM) | 77.86 |
| Net Profit Margin | 3.50 |
Agro Tech Foods Limited is engaged in the business of manufacturing, marketing and selling edible oils and a variety of food products. It is listed on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). They are affiliated with ConAgra Brands, Inc. of the USA, which is amongst the world’s largest food companies.
Currently, edible oils account for about 61% of its revenue, however, it is susceptible to risks related to regulations, availability of oil, high pricing and huge competition. It has a distribution network of over 1100 distributors that supply products to over 4,00,000 stores in India.
Agro-tech foods limited is a small-cap stock with a good current ratio of 2.56. The promoters, hold a 51.77% stake in the company, and this has remained constant for more than five quarters. Its revenue, as well as profits, have shown weak growth when we consider the last three years’ average.
Edible Oil Stock #5 – Gokul Agro Resources Limited
| Particulars | Values |
| Face Value (₹) | 2 |
| EPS (₹) | 8.59 |
| Debt to Equity | 0.53 |
| ROE (%) | 16.08 |
| Current Ratio | 1.12 |
| Market Cap (Cr) | 1409 |
| Promoter’s Holdings (%) | 72.17 |
| Dividend Yield (%) | 0.00 |
| Stock P/E (TTM) | 11.47 |
| Net Profit Margin | 0.53 |
Gokul Agro Resources Limited manufactures edible oils, non-edible oils and meals however, 83.84% of its revenue in FY 2020-21 comes from edible oils and their by-products. Its edible oil portfolio includes brands like Vitalife, Zaika and Mahek.
It supplies its products to the United States, the European Union, South Korea, China and more. 13.34% of its revenue comes from exports. It has a marketing and distribution network across 20 states in India.
On the bright side, the company’s PE ratio is lower than the industry average, its debt-equity ratio is ideal at 0.53. It has a good current ratio of 1.12 and its revenue grew by 18.34%, while its net profit grew by 42.45%, if we conder the average for the last three years.
It is a small-cap stock and its promoters hold a 69.82% stake which is good. However, its quick ratio is lower than 1 and this indicates that the company isn’t generating enough profits to meet its current liabilities.
Bonus Edible Oil Stock: Ajanta Soya
| Particulars | Values |
| Face Value (₹) | 10 |
| EPS (₹) | 26.46 |
| Debt to Equity | 0.04 |
| ROE (%) | 37.68 |
| Current Ratio | 1.58 |
| Market Cap (Cr) | 412 |
| Promoter’s Holdings (%) | 46.85 |
| Dividend Yield (%) | 0.00 |
| Stock P/E (TTM) | 9.68 |
| Net Profit Margin | 2.70 |
Ajanta Soya primarily manufactures and markets vanaspati and cooking oils. In addition, it manufactures various kinds of shortening products for bakeries like biscuits, puffs, pastries and other applications. Further, it manufactures refined oils for third party/ contract manufacturing for various renowned brands. Some of its own brands include Dhruv, Anchal and Parv.
Cremica, Godrej, Britannia, Bikano, Anmol, United Biscuits, Sungold, Harvest Gold, Parle, PriyaGold, PepsiCo, ITC, and Haldirams are some of its major clients.
A few weeks ago, the company’s board approved a stock split in the ratio of 5:1 in order to improve the liquidity of the shares.
In Closing
In this article, we looked at some of the top edible oil stocks in India. We gave you an insight into companies that may be behind the edible oils that you consume. The proposals in the budget seem to be favourable for the edible oils industry in India, and we hope that more beneficial measures will be taken in the coming years to reduce import dependency. Thank you for stopping by and happy investing, until next time!
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Very informative