Author: Aditya Pareek | EQMint | Finance News

In the second quarter of FY26, AWL Agri Business (formerly Adani Wilmar) posted a strong double-digit rise in revenue but saw profits take a sharp downturn — highlighting the pressure that high input costs and soft consumer demand continue to exert on the food and agri sector.

The company reported consolidated revenues of ₹17,604.57 crore, marking a 21.8% year-on-year increase, driven largely by robust performance in its core edible oils and industry essentials segments. However, net profit declined 21% YoY to ₹244.85 crore, compared with ₹311.02 crore in the same quarter last year. On a standalone basis, the decline was even steeper, with profit falling nearly 30% to ₹229.04 crore.

While sequentially the profit was marginally higher than Q1 FY26 (up around 2.9%), the overall quarter painted a mixed picture — solid sales momentum but waning profitability.

Strong Revenue Growth Driven by Core Segments

AWL Agri’s top-line growth was primarily powered by its Edible Oils division, which clocked around 26% YoY growth, supported by higher sales volume and improved price realisations. The Industry Essentials segment, which includes oleochemicals, castor oil, and de-oiled cake, also posted a healthy 19% YoY rise in revenue.

However, the Food and FMCG segment, which comprises branded staples such as rice, wheat flour, pulses, and ready-to-cook products, witnessed softer growth. Weak export demand — particularly in non-branded rice — and a slowdown in domestic consumer spending weighed on this segment’s performance.

The company’s management attributed the slowdown to a combination of factors: subdued consumer sentiment in rural markets, inflationary trends impacting household budgets, and a high base effect from last year’s festive season.

Margins Under Pressure

Despite strong revenue growth, profitability came under pressure due to rising input costs and a shift in product mix. Operating EBITDA for the quarter stood at ₹559 crore, while the operating margin hovered around 3.9%, reflecting the squeeze on profits from higher raw material costs.

The edible oil market, which remains the company’s largest contributor, experienced volatility in global prices of crude palm, soy, and sunflower oil — a key factor that limited margin expansion. Additionally, the company faced higher logistics and distribution expenses as it continued to deepen its retail reach across Tier-II and Tier-III markets.

Industry analysts note that while AWL Agri’s scale allows it to weather short-term price fluctuations, sustained margin recovery will depend on stable commodity prices and stronger growth in the high-margin FMCG category.

Leadership Reshuffle Signals Strategic Realignment

Alongside the Q2 results, AWL Agri Business announced a significant leadership restructuring, reflecting its intent to sharpen operational focus and strengthen governance.

• Mr. Kuok Khoon Hong transitioned from Non-Executive Vice-Chairman to Non-Executive Director.
• Mr. Angshu Mallick, formerly Managing Director & CEO, has been appointed Executive Deputy Chairman until March 2027.
• Mr. Shrikant Kanhere takes over as the new Managing Director & CEO for a three-year term, subject to shareholder approval.

This reshuffle indicates the company’s focus on aligning leadership capabilities with its evolving business strategy — particularly its push toward value-added food products, rural distribution, and sustainable agri-practices.

Stock Market Reaction and Investor Outlook

Investors responded cautiously to the results. Shares of AWL Agri Business slipped slightly after the earnings announcement as markets digested the contrasting trends of rising revenue but falling profits.

Market observers believe that the company’s near-term performance will depend on its ability to stabilize margins and grow its branded portfolio, which offers better pricing power and resilience. Moreover, the festive season demand in Q3 could provide some tailwind if rural recovery gains momentum.

The company’s strong cash flow and disciplined cost management continue to be positives. However, to deliver consistent shareholder value, AWL Agri will need to accelerate growth in its Food and FMCG business — a segment that offers the potential for higher returns and reduced dependence on volatile edible oil prices.

Strategic Priorities Ahead

As AWL Agri looks to the remainder of FY26, several strategic levers will be critical:

• Margin Rebuilding: Focus on operational efficiency, cost optimization, and pricing discipline to restore profitability.
• Product Diversification: Expanding the branded staples and packaged foods portfolio to capture premium consumer segments.
• Sustainability and ESG Goals: Strengthening traceability in sourcing and reducing environmental impact in the supply chain.
• Digital and Distribution Expansion: Leveraging digital tools for rural penetration and last-mile connectivity, especially in under-served markets.
• Commodity Risk Management: Deploying smarter hedging strategies to mitigate raw-material price volatility.

These priorities align with the company’s long-term goal of transforming from a commodity-led edible oils business to a diversified Food & Agri Solutions enterprise.

Conclusion

AWL Agri Business’s Q2 FY26 results showcase a company in transition — revenue is soaring, but profits remain under pressure. With demand fluctuations, commodity volatility, and margin headwinds continuing to test resilience, the next few quarters will be crucial for management to demonstrate operational discipline and strategic agility.

If AWL can successfully balance scale with profitability — by driving branded growth, optimizing costs, and leveraging its strong distribution network — it will not only stabilize margins but also cement its position as a leading player in India’s fast-evolving agri-business landscape.

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Disclaimer: This article is based on information available from public sources. It has not been reported by EQMint journalists. EQMint has compiled and presented the content for informational purposes only and does not guarantee its accuracy or completeness. Readers are advised to verify details independently before relying on them.