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AWL Agri Business’ shares have risen more than 3% over the past four trading sessions, with the September quarter (Q2FY27) preliminary update announced on Monday after market hours, bringing some comfort.
AWL delivered 12% year-on-year volume growth and 24% revenue growth in Q2, led by strong momentum in its food and FMCG portfolio and industry essentials. The edible oil business delivered steady volume growth, the company said. For perspective, volume and revenue growth stood at 7% and 18%, respectively, in the year-ago quarter. AWL’s numbers also exceeded Nuvama Institutional Equities’ Q2 estimates of 6% volume growth and 14% revenue growth.
AWL’s food and FMCG business recorded 33% revenue growth, crossing ₹2,000 crore for the first time. Growth was broad-based, with wheat and rice performing strongly. Additional categories such as besan, pulses, soya nuggets, sugar, sattu and poha now account for over 35% of the food portfolio and together grew around 50% year-on-year in Q2.
Fortune pulses revenue crossed ₹100 crore last quarter, with AWL looking to expand distribution across general trade and quick commerce. The Madhur Sugar deal could provide another leg to the food strategy. The company is using its distribution network to scale the licensed brand, with management targeting higher volumes through the year.
In FY26, edible oil contributed 80% of AWL’s overall revenue, while food and FMCG, and industry essentials contributed 9% and 11%, respectively.
Meanwhile, the industry essentials division recorded 25% year-on-year volume growth in Q2, led by oleochemicals, castor and de-oiled cakes. The edible oil business clocked just 3% volume growth, led by mustard oil and rice bran oil.
Edible oil volume growth was 2% in Q1. Management had attributed the weakness to volatility, supply-chain disruptions and a dried-up primary pipeline, but expected volumes to recover from Q2 onwards. Although improved from the previous quarter, growth remains below the 5-6% volume expansion management had indicated for the year.
The divergence across segments is visible in AWL’s performance. On the Q1 earnings call, management said its food and FMCG business was targeting 18-20% revenue growth for the year. Meanwhile, alternate channels continue to gain traction. Food categories across e-commerce and quick commerce grew 40% year-on-year, while branded exports and HoReCa volumes rose 59% and 21%, respectively.
To be sure, strong revenue growth may not translate into similar earnings growth. Nuvama expects Q2 Ebitda to decline around 8% year-on-year, with the margin falling 100 basis points to 2.9%.
In Q1, AWL’s reported Ebitda had increased 90% year-on-year, while normalized Ebitda, after regrouping the commodity derivative impact, rose about 34%.
“While we are encouraged by the Q1 results, we prefer to stay on the sidelines, given edible-oil volatility and the need for sustained margin delivery in foods,” said analysts from J.P. Morgan India in their Q1 review report.
AWL’s shares are down around 30% over the past year to ₹183. The Q2 update suggests that food and FMCG and alternate channels are driving growth. However, a sustained recovery in edible oil volumes and continued expansion of the food business remain crucial variables for the stock.
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