What is a differentiating factor between a foodie and a health freak,? It is the use of oil in their food. The current trend shows that a majority of the population is moving toward a healthy lifestyle and have started being conscious about what they eat and its proportion. However, the use of oil cannot be completely erased from our diet. Edible oils have been a huge part of our daily diet and the edible oils sector in India has seen an upwards trend for a long time now.
Given below are the key details of the edible oils sector in India and related details for the same.
The edible oils market in India was pegged at a volume of 23.9 million tons for the year ending 2021. This sector is one of the pioneers in the FMCG industry. Even during and post the covid pandemic, the edible oils sector has not seen a slump. The sector has only grown on year on year basis. The demand for edible oils in the country has seen a constant rise in the country resulting in an increase in the imports of edible oils in India. According to leading market research, the edible oils sector is expected to reach a volume of 26.3 million tonnes by the end of the year 2027. This reflects an approximate CAGR of 1.59% during the period of 2022-2027.
The edible oils sector in India is studied and analyzed based on many categories. These categories range from the type of edible oil, packaging type, size and material, and market size based on region as well as its distribution channel. The highlights of these categories are mentioned hereunder.
The edible oils market in India is made up of various types of oils. The major player in this category is palm oil followed by soybean oil. The various types of edible oils available in the country and their market shares are highlighted below.
This category focuses on the packaging side of the edible oils and the various subcategories available hereunder are,
The domestic production of edible oils is not sufficient to meet its demand across the country. Therefore, approximately 56% of the demand for edible oils in the country is met through imports. The country has also banned the export of edible oils with effect from March 2008 to ensure that the domestic demand is met. However, from 2018, the export of all edible oils was made free except mustard oil (which is subject to certain restrictions regarding packaging and minimum export price)
Edible oils are further categorized based on regional consumption in North India, South India, West India, and East India. Among these regions, the North Indian segment is expected to be dominant by 2027 followed by East and West India. The South Indian regions account for the lowest share of edible oil consumption.
India is a huge market for edible oils and is also the largest importer of the same. The key contributor driving the market is the huge and ever-increasing demand for the same. The contributing factors for such increasing demand are
The Indian edible oils industry is set to increase on account of the above-mentioned factors contributing to the rising demand for the same. Also, the increase in the exports of edible oils as well as the increasing crop yields have provided a boost to this industry. Another impact on the industry is due to the growing demand for processed food and ready-to-eat packages where edible oils are also used as preservatives as well as increased demand for cold-pressed healthy oils for home use. This has led to effective branding opportunities and deeper penetration of market giants into the urban as well as semi-urban and rural areas.
The edible oils industry is dominated by a few key players having a major chunk of the market share. These giants and their prime details are mentioned below.
Patanjali Foods is the largest manufacturer of edible oils in our country. The company is part of the Patanjali Ayurved group after it was acquired by the latter in 2019. It is a prominent name in the FMCG sector and is ranked 175 in the consumer products industry according to a report by Deloitte in 2012. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 32,449 crores |
| PE Ratio | 35.54 |
| Return on Equity | 15.76 (March 22) |
| Debt Equity Ratio | 0.05 (March 22) |
| Promotor’s Holdings | 80.82% |
| Share price | Rs. 892.55 (March 2023) |
| Dividend Yield | 0.56% |
Gujarat Ambuja Exports is a giant in the FMCG industry that is involved in the Agro-Processing business. The company has its dominance in Maize products and edible oils. The company caters to the domestic as well as global markets in the food, pharma, and feed industry. The key details of the company are detailed below.’
| Category | Details |
| Market Capitalization | Rs. 5,705 crores |
| PE Ratio | 13.8 |
| Return on Equity | 25.19 (March 23) |
| Debt Equity Ratio | 0.03 (March 23) |
| Promotor’s Holdings | 63.84% |
| Share price | Rs. 254.80 (March 2023) |
| Dividend Yield | 0.26% |
Agro Tech Foods is a big name in the FMCG industry of the country and is a manufacturer of many food products and edible oils. The company has a huge presence in the ready-to-eat food section, breakfast foods section, ready-to-cook snacks, spreads and dips, etc. the key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 2,101 crores |
| PE Ratio | 141 |
| Return on Equity | 5.92 (March 22) |
| Debt Equity Ratio | 0.09 (March 22) |
| Promotor’s Holdings | 51.77% |
| Share price | Rs. 871.75 (March 2023) |
| Dividend Yield | 0.35% |
The company is in the business of manufacturing and selling ready-to-use products. The company has many products in the Animal Nutrition and Health sector, Cosmetics and Personal Care, Crop Science as well as Food and Beverage Section. The company is 5th largest in terms of market capitalization in the FMCG sector. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 1,256 crores |
| PE Ratio | 15.89 |
| Return on Equity | 21.46 (March 22) |
| Debt Equity Ratio | 0.24 (March 22) |
| Promotor’s Holdings | 75.00% |
| Share price | Rs. 83.25 (March 2023) |
| Dividend Yield | 1.21% |
The edible oils sector is a very dominant sector in the FMCG industry. The demand for edible oils in the country is increasing at a faster pace given various factors. This increasing demand has given a huge boost to the stocks in the prominent stocks in the edible oils industry. The outlook for this industry is also quite bright despite the recent factors contributing to uncertainty like the Russian-Ukraine war as well as the pandemic resurging in various parts of the country and the world.
The government is trying to bridge the gap between the increasing domestic demand and the limited domestic production in an effort to reduce the dependence on imports to meet the country’s total demand.
The dominant edible oils consumption in India includes palm oil and soybean oil. Together they account for almost 70% of the total edible oils consumed in the country.
The edible oils segment in India is dominated by the Northern region of the country.
The expected CAGR of the edible oils sector in the country for the following 5 years between 2022-2027 is expected to be 1.59%.
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