AWL Agri Business Q1 FY27 earnings call

AWL Agri Business Limited commenced FY27 with a strong performance, reporting an 18% year-on-year revenue growth to INR 20,048 crore. This growth was broad-based across segments, accompanied by a significant 34% increase in Operating EBITDA to INR 693 crore. Profit before tax and profit after tax also saw substantial growth of 48% and 40% respectively, indicating improved profitability and execution across businesses.

The Food and FMCG segment continued to be a key growth driver, with revenue increasing by 22% year-on-year to INR 1,726 crore. This growth was broad-based across the portfolio, with rice showing over 40% YoY growth and categories like wheat flour, pulses, and poha maintaining healthy demand. The company aims for mid-teen revenue growth in this segment while maintaining an EBITDA margin in the 3%-4% range, prioritizing top-line expansion and market share.

The Edible Oil business experienced a challenging quarter, with volume growth at a low single-digit 2% year-on-year. This was attributed to temporary channel de-stocking and sharp volatility in global edible oil prices. Despite these headwinds, the segment's revenue grew 15% and EBITDA per metric ton increased by 33%. Management expects volume growth to recover to 5%-6% for the rest of FY27, with EBITDA per metric ton in the INR 4,000-INR 4,500 range.

The Industry Essential segment delivered a robust performance, achieving 13% volume growth and 28% revenue growth, with EBITDA up 47%. Oleochemical and Specialty Chemical businesses contributed over 40% of this segment's revenue. In terms of channels, alternate channels including modern trade, e-commerce, and quick commerce grew 27% year-on-year, with quick commerce alone expanding by 56% year-on-year, highlighting a structural shift in consumer buying behavior.

AWL is actively transforming from an edible oil company into a diversified Food and FMCG player. The company reiterated its 2030 vision to achieve INR 100,000 crore in revenue and INR 4,000 crore in EBITDA. Annual CAPEX is projected around INR 700 crore, allocated towards expanding Edible Oil refining capacities and converting contractual Food business operations to in-house, aiming to improve efficiency and control.

The recent integration of the Madhur brand into AWL's portfolio is a strategic move to strengthen its presence in the packaged sugar category. Madhur currently sells approximately 15,000 tons per month, with a target to scale up to 20,000 tons per month by year-end. The brand is expected to contribute INR 700-800 crore in revenue for the full year, with a 0.5% royalty paid to Shree Renuka Sugars. The focus remains on leveraging AWL's distribution to drive top-line growth.

India continues to import approximately 70% of its edible oil requirements, making the country susceptible to global price volatility. AWL maintains a raw material stock of 30-35 days due to import voyage periods. The company's oil business mix includes 30% palm, 30-35% soya, 20% sunflower, and 15% local oils. While direct procurement from farmers accounts for 18-19% of overall procurement, efforts are underway to boost domestic oilseed production, particularly in mustard farming, through initiatives with NGOs.