I am not sure about how much was the volume growth last couple of quarters, but with their pass through clause they were able to pass-on the raw material increases (maybe with a lag) which definitely increased realization.
The following are the raw materials for the company:
Vegetable oils, including rapeseed oil, palm oil, palm kernel oil, sunflower oil, castor oil, soybean oil, rice bran oil
Now, FAO Vegetable Oils Price Index tracks the international prices for most of these vegetable oils.
Screenshots from FAO Food Price Index | World Food Situation | Food and Agriculture Organization of the United Nations
So, my guess is maybe this quarter and Q3FY23 won’t be as strong as last couple of quarters unless volumes pick up significantly. But this is something the market would have already figured a few weeks back, so not sure why the reaction now. Maybe we are missing something which big investors/institutions know. Anyway hoping the price fall is arrested around long term PE average, since the business is fundamentally sound.
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