AWL

Shows Signs of Recovery

(formerly Adani Wilmar) has seen its stock fall 37% since 21 November, hitting a 52‑week low of ₹171.19 in March after the Adani group’s exit and muted 9MFY26 financials. However, Q4FY26 business updates suggest the worst may be over, with sales volumes up 13% YoY and EBITDA growth estimated at 20% YoY, reversing the decline seen in the first nine months of FY26. Segmental Performance - Edible Oil (80% of FY26 revenue) - Q4 volumes up 17% YoY, aided by lower imports from neighboring countries. - Value growth at 21%, supported by ₹4–5/litre price hikes in March. - FY26 volumes grew modestly at 2%, but Q4 momentum signals recovery. - EBIT margin fell 219 bps YoY to 1.7% in 9MFY26 due to higher raw material costs. - Industry Essentials (12% of revenue) - Volumes up 14% in Q4, versus 6% in 9MFY26. - Segment benefits from edible oil by‑products, providing cost advantage. - Food & FMCG - Q4 growth at 1%, better than 2% decline in 9MFY26. - Weak institutional exports weighed, but retail scaling underway post exit from government‑to‑government business. - Branded rice grew 30% YoY in Q4, supported by 14% rise in outlets, largely in rural areas. - Alternate channels (e‑commerce, quick commerce, modern trade) grew 43% in Q4. Valuation & Outlook - Stock trades at ~19x FY27E earnings (Bloomberg consensus), offering valuation comfort after steep correction. - Global linkages via parent Wilmar International and port‑based processing units provide structural cost advantages. - Risks: raw material volatility (90% of sales) and margin pressure from scaling food & FMCG. - Near‑term outlook hinges on sustaining edible oil recovery and execution in branded foods. Conclusion AWL Agri Business is showing early signs of recovery after a difficult FY25–26. With edible oil volumes rebounding and retail expansion driving branded foods, the company offers appealing valuations for long‑term investors, though raw material volatility and margin pressures remain key watchpoints.