Edible oil, the core revenue engine of AWL Agri Business Ltd (formerly Adani Wilmar), is showing signs of fatigue. While the segment’s revenue rose 26% year-on-year to ₹13,415 crore in the June quarter (Q1FY26), weak palm oil sales meant total volume fell 4%.
Excluding palm oil, branded volume grew in the low single digits, aided by robust mustard oil sales. Realisations were strong, but elevated prices in value-for-money categories dented demand, causing AWL’s overall market share to fall 45 basis points and palm oil market share to drop 135 bps.
Food & FMCG revenue fell 8% year-on-year to ₹1,414 crore following a 20% volume decline (5% excluding the discontinued G2G rice business). Non-core food categories such as besan, pulses and pohamaintained high-teens volume growth.
AWL’s management believes the worst may be over. With palm oil now cheaper than soya and sunflower, the company expects to be able to compete better heading into the festive season. It is guiding for 5-6% volume growth in edible oils for FY26. This means growth must pick up sharply over the rest of the year.
Branded foods to drive margin expansion
The bigger shift lies in foods. Management sees strong potential in branded basmati and aims to become the third-largest player in India’s branded rice market. AWL is targeting ₹7,000 crore of revenue from food & FMCG in FY26, increasing to ₹10,000 crore by FY27. While edible oils remain the workhorse, branded foods are expected to drive margin expansion over time.
Distribution tailwinds are helping. AWL has deepened rural reach and holds a 35-40% share in edible oils across platforms like Blinkit and Zepto, with better margins than general trade.
Still, factoring in a weak start to the year, Nuvama Research has trimmed FY26 and FY27 Ebitda estimates by 6.8% and 5.3%, respectively. Capacity utilisation in edible oils slipped to 59% from 62% in Q4FY25—not ideal for a scale-driven business. Plus, Ebit margin dropped to 1.4%, down 240 bps year-on-year. Even during a tough FY24, margin had hovered around 3.5-4%.
AWL is preparing for a stronger second half of FY26, with ₹500-600 crore of capex planned for the year, including ₹100 crore in maintenance. But edible oils must lead the rebound. The near-term question is simple: will falling palm oil prices revive volumes and restore margin confidence? AWL is guiding for stability, but investors will want proof of it. The stock trades at 26 times estimated FY27 earnings, as per Bloomberg. Valuations are not demanding. If pricing trends hold, the oil business could shine again.
