Can Adani Wilmar’s FMCG bet deliver long-term gains?

Subscribe to enjoy similar stories. Adani Wilmar Ltd (AWL) is doubling down on branded foods with its ₹600 crore acquisition of G.D. Foods Manufacturing (India) Pvt.

Ltd, the maker of Tops sauces and pickles. The move marks a decisive shift beyond its core edible oil business into the high-margin, fast-moving consumer goods (FMCG) category. But will Tops be the growth catalyst AWL needs or just another incremental step in its diversification plan? Sure, the acquisition strengthens AWL’s hold in north India, where Tops enjoys a strong retail presence across 150,000 outlets.

More importantly, with a 48% gross margin in FY24, the deal is expected to bolster AWL’s long-term push toward a 20-25% gross margin in its food business post-FY28. The challenge, however, lies in scaling Tops beyond its stronghold and translating those margins into sustained profitability. The deal value of ₹600 crore implies an enterprise-value-to-sales ratio of 1.6 times based on Tops’ FY24 revenue of ₹384 crore.

The valuation appears reasonable. AWL will initially acquire 80% of shares from existing promoters and the remaining 20% in phases over the next three years. AWL will fund the acquisition through internal accruals and, if needed, the initial public offering (IPO) proceeds.

While Tops is strong in jams and sauces, its regional skew means AWL must expand its reach in underpenetrated western and southern markets to justify the valuation. AWL’s timing appears opportune. Fresh off a strong December quarter (Q3FY25)—where revenue surged 31% year-on-year and profit after tax more than doubled—the company is fast-tracking its FMCG pivot.