The Indian edible oil sector is poised to bounce back this fiscal, following two consecutive fiscals of degrowth.
The growth will be driven by higher realisations, resulting from the recent hike in import duty, and a steady rise in consumption.
Although India remains heavily reliant on imports, government initiatives and increased budgetary allocations to support domestic production are expected to foster self-sufficiency over the next five fiscals.
Operating margins of edible oil refiners are set to improve this fiscal largely because of favourable prices, after declining in the last two fiscals owing to a sharp fall in realisations, aiding cash generation.
Capital expenditure is expected to be limited, as refiners have added more-than-adequate capacities across segments over the last three fiscals. This along with better cash generation from operations, will benefit financial risk profile of refiners.
That said, any further change in import duty, supply constraints and geopolitical uncertainties will bear watching.
In this context, Crisil Ratings is hosting a webinar on Tuesday, December 10, 2024, where our experts will delve into:
Demand outlook and consumption patterns of imported and domestically produced oils
Impact of the recent hike in import duty on the sector
Government initiatives and their impact on domestic oil production
Disclaimer: This event and its content are intellectual property and confidential information of Crisil. Any use of the same without written permission of Crisil is illegal and hence punishable. Recording the webinar in any form in full or part or copying, altering, distributing or streaming the webinar is strictly prohibited and violation will attract legal action.
