Summary
AWL Agri Business Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 4:00 PM IST
Event Participants
Executives 4 Angshu Mallick (Executive Deputy Chairman), Pankaj Goyal (Interim CFO), Saumin Sheth (ED & COO), Shrikant Kanhere (MD & CEO)
Analysts 3 Ashutosh Joytiraditya (ICICI Securities), Dhiraj Mistry (ICICI Securities), Harit Kapoor (Investec)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Volume (Consolidated) | 13.38 Lakh MT | +3% YoY, driven by 8% growth in Edible Oils; Food volumes remained flat due to high wheat base. |
| Revenue (Consolidated) | ₹14,142 crores | +10% YoY, reflecting higher edible oil prices compared to the previous year. |
| EBITDA (Quarterly) | ₹637 crores | Sustained performance of +₹600 crores per quarter; reflects better product mix and cost discipline. |
| EBITDA (LTM) | ₹2,200 crores | Trailing 12-month performance showing stable profitability despite commodity volatility. |
| Alternate Channel Revenue (LTM) | ₹4,800 crores | Strong momentum with volumes growing +42% YoY; Quick Commerce grew +65% YoY. |
| G.D. Foods Revenue Growth | 15% | +18% volume growth with material margins at 54%; leveraging AWL distribution. |
| Basmati Rice Market Share | 11.9% | Sequential improvement on MAT basis; Kohinoor brand grew +32% YoY. |
| Direct Distribution Reach | 9,50,000 outlets | Direct reach expanded across India; rural distribution covers 60,000 towns. |
Geographic & Segment Commentary
- Edible Oils: Segment volumes grew 8% YoY, led by double-digit growth in mustard oil. Pricing remained rangebound for Soya and Palm, while Sunflower moved to a premium due to supply tightness. Management noted a industry-wide trend of “grammage-led value offerings” where 1L packs were reduced to 750ml to maintain price points.
- Food & FMCG: Strategic focus shifted toward value-added products (sugar, poha, nuggets), which now contribute 30% of segment volume. While wheat and non-Basmati rice faced headwinds from stable spot prices favoring local repackers, branded Basmati (Kohinoor) saw 32% growth. Multi-grain Atta was launched this quarter to target the health segment.
- Industry Essentials: Segment volumes were impacted by macro challenges in the Castor business. However, Oleochemicals remained steady, and the company is diversifying into Specialty Chemicals, which now account for 7-8% of Oleo volumes with higher margin potential.
Company-Specific & Strategic Commentary
- Distribution Synergy: AWL is actively migrating G.D. Foods (acquired April 2025) onto its distribution network, achieving 18% volume growth in the sub-segment. Management aims to leverage the 9.5 lakh outlet reach to scale G.D. Foods’ tail-end products.
- Channel Shift: Alternate channels (Quick Commerce, E-commerce, Modern Trade) now account for 25% of Food & FMCG staples nationally, rising to 50% in major metros. Quick Commerce is the fastest-growing sub-channel at 65% YoY.
- Premiumization: The company launched “Xpert” functional oils and cold-pressed mustard oil to drive higher margins. Current New Product Development (NPD) contributes approximately ₹500 crores to revenue with 3x higher margins than base oils.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA per Ton | ₹3,600 – ₹4,000 | Sustainable target range based on disciplined risk management and stable pricing. |
| Food Segment Revenue | Striking distance of ₹10,000 Cr by FY27/28 | Target postponed slightly from FY27 to FY28 due to a flattish FY26, but momentum remains strong. |
| Volume Growth (FY27) | Single-digit (Oil), Double-digit (Food) | Expectations of improved rural demand and stable agri-production following a good monsoon. |
| Food EBITDA Margins | 5% – 7% | Long-term target (2-3 years) once the segment matures past the current investment phase. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Volatility | Sunflower oil prices are volatile due to the Ukraine conflict; Russia has emerged as the largest supplier, displacing previous routes. |
| Wheat Procurement | Stable wheat prices (₹27-₹29/kg) disadvantage AWL, which procures at harvest and incurs carrying costs, vs small players buying hand-to-mouth. |
| Import Dynamics | SAFTA route imports of soya oil from Nepal (though declining) continue to affect market share in North and East India. |
| Regulatory Tariffs | Uncertainty regarding US trade tariffs; however, a potential reduction from 50% to 18% on specific exports could benefit the branded segment. |
Q&A Highlights
Margin Sustainability
- Question: How will you protect the ₹3,500/ton EBITDA guidance in a stressed cycle? (Sanjay Shah)
- Answer: Profitability is protected by non-speculative risk management. The planning cycle is 90+ days, so quarterly M2M fluctuations should be viewed on a 6-12 month trailing basis (Shrikant Kanhere).
Food Business Scaling
- Question: When will the Food business deliver meaningful EBITDA? (Sanjay Shah)
- Answer: The segment is currently in an investment phase. Meaningful margins of 5-7% are expected in 2-3 years as we scale past the current growth investments (Shrikant Kanhere).
Market Dynamics (Grammage Play)
- Question: Why is the market moving toward 750ml SKUs? (Harit Kapoor)
- Answer: Higher edible oil prices led competitors to reduce grammage (1000g to 750g) to maintain affordable absolute price points. This trend is prominent in Palm and Soya but absent in Mustard (Angshu Mallick).
Inorganic Growth
- Question: Are you looking for more acquisitions in the Food space? (Ashutosh Joytiraditya)
- Answer: We continuously evaluate proposals. Past successes like Kohinoor and G.D. Foods show our appetite for brands that fit our valuation and distribution criteria (Shrikant Kanhere).
Key Takeaway
AWL Agri Business Limited delivered a steady Q3 FY26, characterized by a 10% revenue increase and consolidated EBITDA of ₹637 crores, marking the third consecutive quarter of ₹600 crore+ profitability. While Edible Oil volumes grew 8% YoY, the Food & FMCG segment remained flattish due to a high base in wheat and non-Basmati rice, though core brands like Kohinoor (+32%) and value-added staples (+20%+) showed robust momentum. Strategically, the company is successfully integrating G.D. Foods and aggressively pivoting toward alternate channels, with Quick Commerce growing at 65% YoY. Management remains confident in achieving a sustainable EBITDA of ₹3,600-₹4,000 per ton through disciplined risk management. Looking ahead, AWL expects a double-digit volume recovery in Food and a transition toward a ₹10,000 crore segment top-line by FY28, supported by stable agri-commodity prices and expanded direct distribution to nearly 1 million outlets.
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