AWL Agri Business, formerly known as Adani Wilmar, has released its financial results for the first quarter of the current fiscal year, and the performance presents a mixed picture. While the company recorded its highest-ever quarterly revenue, profit margins took a hit due to rising input costs.
In Q1 FY26, AWL’s revenue rose sharply by 21% year-on-year, reaching ₹17,759 crore. This impressive growth was primarily driven by the edible oil segment, which generated ₹13,415 crore in revenue. This accounts for 78.6% of the company’s total income for the quarter. The edible oil business also showed a robust 26% year-on-year growth, establishing AWL as a steadily rising leader in India’s edible oil market.
The strong overall performance in Q1 is largely attributed to the edible oil segment, which remains the company's backbone. However, the company is also expanding steadily in other areas.
The food and FMCG segment brought in ₹1,414 crore during Q1, registering a modest 4% growth over the same period last year. Although this segment contributes only 8% to the company’s total revenue, it has a 16% share in volume terms. This indicates growing strength and potential in AWL's FMCG portfolio. The company has also revised the pricing of select FMCG products, which is expected to help improve margins in the upcoming quarters.
AWL's third major business line, Industry Essentials, also posted a solid 12% growth during the quarter and contributed equally—12%—to the overall revenue. This means that all three core segments of AWL—edible oil, FMCG, and industrial essentials—are showing growth momentum.
Despite the strong top-line performance, AWL faced a decline on the profitability front. The net profit for the quarter stood at ₹238 crore, reflecting a notable dip when compared to previous quarters. The key reason behind this profit erosion lies in the sharp rise in input costs. The company’s cost of goods sold (COGS) increased by 25%, primarily due to the higher cost of raw materials. This outpaced the revenue growth and squeezed profit margins.
However, there is a silver lining. Over the past three months, crude oil prices have dropped more than 10%. If this trend continues, it is expected to ease the pressure on input costs in the coming quarters, potentially boosting profit margins and restoring bottom-line growth.
AWL's edible oil business remains a strong cash generator, contributing between ₹1,000 crore and ₹15,000 crore annually in cash flow. The company is strategically reinvesting this cash into its FMCG business, mirroring the diversification strategy seen in companies like ITC, which used profits from its cigarette business to build a strong FMCG presence.
In addition to business performance, AWL has been actively expanding its retail footprint. The company’s products are now available across 8.7 lakh retail outlets, including 55,000 villages. This clearly shows that AWL is building a strong presence not just in urban areas, but in rural markets as well.
Despite strong revenue numbers, AWL's stock ended Tuesday’s session with a 1.75% decline, closing at ₹263 per share. Investors appear cautious, likely due to the profit margin concerns. However, if raw material prices remain subdued, margins are expected to recover in the coming quarters, which could positively impact profitability and possibly investor sentiment.
Disclaimer:
This article is for informational purposes only and should not be construed as financial advice. Please consult your investment advisor before making any decisions regarding stock purchases.
