AWL Agri Business is focusing on higher investments in flanker brands to target value-sensitive consumers and expand distribution reach to gain back market share. It increased direct outlet reach and rural coverage to 0.86mn outlets (~2.9 times versus Mar'20) and ~50,000 towns, respectively. Positively, volumes grew by 25% YoY in south region (AWL has been historically under indexed).
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ICICI Securities Report
AWL Agri Business Ltd. earlier known as Adani Wilmar reported an underwhelming Q4 FY25 with revenue growth of 38% YoY (price-led) while volume grew by 8% with broad-based performance across segments. While 7% YoY volume growth in edible oil despite significant price inflation is good, there were a few misses:
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market share loss (-30bps YoY) in edible oil (primarily in palm oil due to significant inflation),
volume growth of 10% YoY in Foods was below its earlier trajectory of >15% (expectations of ~20% CAGR over next couple of years) due to underperformance in rice,
Gross profit per ton and Ebitda per ton declined 22% and 44% sequentially on a higher base.
Positively, edible oil business grew volumes by 25% in south region (historically under indexed) and now contributes ~10% of edible oil revenues. It continues to focus on distribution expansion and higher investments behind brands to gain market share. Meaningful outperformance of domestic foods segment (management plans to increase volume salience of foods from ~17% currently to ~30%) is key to de-risk volatility in edible oil business. Maintain Buy.
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