AWL Agri Business Ltd (formerly Adani Wilmar Limited) has announced its financial results for Q1, showcasing resilience in the face of market challenges while projecting robust growth for its Food & FMCG segment.

Record Q1 Revenue Amid Challenges

The company reported its highest-ever Q1 revenue of ₹17,059.00 crore, marking a 21% year-on-year increase. This growth came despite headwinds such as muted consumer demand, strategic consolidation of regional rice operations, and fluctuations in edible oil prices. The volume decline of 5% year-on-year was primarily attributed to the rice category.

Segment Performance

Edible Oils

The Edible Oils segment saw a 26% year-on-year revenue increase to ₹13,415.00 crore, despite a 4% volume decline. Excluding Palm oil, branded volume grew in low single digits, supported by strong performance in mustard oil.

Food & FMCG

The Food & FMCG segment revenue declined by 8% year-on-year to ₹1,414.00 crore, impacted by the consolidation of non-basmati rice business and lower rice exports. However, excluding the G2G rice business, this segment grew by 4% year-on-year.

Industry Essentials

The Industry Essentials segment posted a 12% year-on-year revenue growth to ₹2,230.00 crore, driven by a 6% volume increase, primarily in the de-oiled cake business.

Profitability and Future Outlook

Despite challenges, AWL Agri Business delivered healthy profits on a last twelve months (LTM) basis, with operating EBITDA of ₹2,384.00 crore and PAT of ₹1,151.00 crore for LTM June. The company's focus on improving profitability in the Food & FMCG segment led to the highest-ever quarterly PBT of ₹75.00 crore, with a 5.3% PBT margin.

Ambitious Growth Projections

Looking ahead, AWL Agri Business has set ambitious targets for its Food & FMCG segment:

• Projected revenue of ₹7,000.00 crore by FY26
• Further growth to ₹10,000.00 crore by FY27

These projections underscore the company's confidence in its diversification strategy and the potential of its food business.

Edible Oil Division Outlook

For its Edible Oil division, AWL Agri Business anticipates a quarterly EBITDA of ₹375.00-400.00 crore, indicating expected stability and profitability in this core segment.

Strategic Initiatives and Market Position

AWL Agri Business continues to strengthen its market position:

• Expanded direct retail reach by 18% year-on-year to 8.7 lakh outlets
• Increased rural town coverage to around 55,000 towns
• Strong growth in alternate channels, generating over ₹3,900.00 crore in revenue for LTM June
• Quick Commerce revenue grew by approximately 75% year-on-year in Q1

Angshu Mallick, MD & CEO of AWL Agri Business Ltd., commented on the results: "With the resiliency of our core business and large opportunity, we expect to continue to benefit from the formalization of the Indian staple food industry."

As AWL Agri Business navigates through market challenges, its strategic focus on expanding its food portfolio and strengthening distribution networks positions it well for future growth in the competitive FMCG sector.

AWL Agri Business Limited (formerly known as Adani Wilmar Limited) has reported mixed results for the first quarter, with revenue growth offset by a decline in overall volumes.

Revenue Growth Amid Volume Challenges

The company recorded its highest-ever Q1 revenue at ₹17,059.00 crore, marking a 21% year-on-year increase. However, AWL Agri Business faced a 5% year-on-year decline in overall volumes during the quarter. This volume decrease was primarily attributed to the rice category, which experienced significant headwinds.

Segment Performance

Edible Oils

The edible oils segment saw a 26% year-on-year increase in revenue, reaching ₹13,415.00 crore. However, volumes in this segment declined by 4% compared to the same period last year. Excluding palm oil, branded volume grew in low single digits, supported by strong performance in mustard oil.

Food & FMCG

The Food & FMCG segment reported a revenue of ₹1,414.00 crore, an 8% decline year-on-year. This decrease was largely due to the consolidation of non-basmati rice business and the discontinuation of one-off G2G (Government-to-Government) rice business from the previous year.

Industry Essentials

The Industry Essentials segment showed positive growth, with volume increasing by around 6% year-on-year. This segment's revenue grew by 12% to reach ₹2,230.00 crore in Q1.

Profitability

Despite the volume challenges, AWL Agri Business reported a Profit After Tax (PAT) of ₹238.00 crore for Q1. The company's operating EBITDA stood at ₹519.00 crore for the quarter.

Market Dynamics and Challenges

The company faced several challenges during the quarter, including:

1. Muted consumer demand
2. Strategic consolidation of regional rice operations
3. Discontinuation of one-off G2G rice business from the base year
4. Fluctuations in edible oil prices

Raw material prices in Q1 were approximately 30% higher compared to the base quarter, leading to subdued consumer demand. Market volatility in crude edible oil prices, driven by reduced customs duties, global geopolitical events, and higher biodiesel mandates in the U.S., led to trade destocking during the quarter.

Distribution and Alternate Channels

AWL Agri Business continued to expand its distribution network, with direct retail reach growing 18% year-on-year to 8.7 lakh outlets. Rural town coverage expanded to around 55,000 towns, a tenfold increase from FY'22.

Alternate channels, including Quick Commerce, generated over ₹3,900.00 crore in revenue in the last twelve months ending June. Q-commerce revenue grew by approximately 75% year-on-year in Q1.

Management Commentary

Angshu Mallick, MD & CEO of AWL Agri Business Ltd., commented on the results: "The Company witnessed a temporary volume decline, primarily influenced by the consolidation of its regional rice operations and muted consumer demand. Encouragingly, the core categories delivered healthy volume growth, and revenue rose 21% YoY, driven by higher edible oil realizations."

He added, "With the resiliency of our core business and large opportunity, we expect to continue to benefit from the formalization of the Indian staple food industry."

Outlook

The company expects strong growth momentum in its edible oils business going forward, supported by recent policy changes and normalized palm oil prices. AWL Agri Business anticipates volume growth to continue exceeding industry rates in several categories, including wheat flour and other food products.

As AWL Agri Business navigates through these challenges and capitalizes on growth opportunities, investors and industry observers will be closely watching the company's performance in the coming quarters.