AWL Agri Business Posts Strong Growth, Q1 FY26 Revenue Jumps 21pc YoY

AWL Agri Business has announced its highest-ever first-quarter revenue for FY26, reaching Rs 17,059 crore. This marks a 21% increase compared to the same period last year. The edible oil segment was the primary driver of this growth, with a 26% year-on-year rise, contributing Rs 13,415 crore. This segment accounted for 78.6% of the total revenue and 61% of the overall volume mix.

The Food & FMCG sector experienced a modest revenue increase of 4%, reaching Rs 1,414 crore. Although this segment only contributed 8% to the total revenue, it represented 16% of the overall volume mix. During this quarter, AWL implemented price hikes across this category. Meanwhile, the industry essentials business saw a growth of 12%, contributing to 12% of the total revenue.

Expanding Market Reach

AWL is actively working on expanding its Food & FMCG business by leveraging strong cash flows from its edible oil segment. This strategy mirrors ITC's approach of using cigarette business profits to build its FMCG portfolio. The edible oil division generates approximately Rs 1,200-Rs 1,500 crore in cash flows annually, which supports investments in new categories. To enhance market presence, AWL increased its retail coverage by 18%, now reaching 8.7 lakh outlets. This expansion includes around 55,000 rural towns and represents a ten-fold increase since FY22. Despite robust revenue growth, net profit for the quarter fell to Rs 238 crore due to higher raw material costs.

Financial Performance and Stock Valuation The cost of goods sold (COGS) rose by 25%, surpassing revenue growth rates. However, raw material prices have decreased by over 10% in the past three months. These reductions are expected to benefit future quarters' financial performance. On Tuesday, AWL's stock closed at Rs 263 per share, trading at its lowest valuation in three years at 30 times trailing twelve-month earnings. AWL's strategic focus on expanding its Food & FMCG business while maintaining strong cash flow from its core edible oil segment positions it well for future growth.