Ladies and gentlemen, good day and welcome to the Q1 FY26 conference call of AWL Agri Business Ltd hosted by ICICI Securities. As a reminder, all participant lines will be in the listen- only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Dhiraj Mistry, Analyst from ICICI Securities. Thank you and over to you.
Thank you and welcome everyone. I would like to welcome all for Q1 FY26 AWL Agri Business Earnings Call. We have with us Mr. Angshu Mallick, CEO and Managing Director, Mr. Shrikant Kanhere, Deputy CEO and CFO, and Mr. Saumin Sheth, COO. I would like to hand over the
call to the management for their opening remarks. Thank you. Over to you, sir.
Y eah, thank you. And very warm welcome to everyone who is participating in this call of AWL Agri Business Ltd for the Q1 FY 2026. As a ritual, we will take you through a brief presentation. After the presentation, we will open the floor for Question and Answer. We'd be happy to answer the questions from all of you. We'll start with the result summary. Q1 2026. We closed at a volume of 1.58 million tons with a revenue of INR 17,000 crore +. We had 21% upside in the revenue. However, the volumes were down by 5% predominantly on account of G2G business of rice which we had last year, which was not there this time. If we normalize with that, this volume degrowth would be close to 2% instead of 5%.
EBITDA at INR 572 crore and a PAT at INR 238 crore. This margin of course has seen a drop as compared to Q1 2025 predominantly because of high base year. When I say high base year, it's basically because of the favorable commodity cycle that we had entirely last year in FY2025, which also made FY2025 one of our exceptional years. For Q1 2026, when we look at gross margins and EBITDA, we have been able to deliver these numbers in line with the expectation, in line with what we have been delivering over last couple of years. EBITDA of INR 3,600 crore+ per ton and gross margin of INR 11,121 per ton. When we look at a quarterly profit trend, it's growing healthily. Standalone EBITDA normalized at a quarter trend at INR 484 crore at INR 465 crore of the last quarter. It's been within the trend.
When we look at a consolidated EBITDA normalized for last 12 months, I think it's been consistently growing. It's consistently been recording INR 2,000 crore plus for last four quarters. Similarly, when we look at a quarterly trend on a gross profit margins per ton, it's consistently showing INR 10,500 kind of level which we have been saying for quite some time that this is what a normalized level of gross margin that we would be delivering. Average EBITDA per metric ton of INR 3,000 close to INR 3,500 per ton this quarter. This is in line with our expected numbers. The market contains the edible oil prices where we have seen finally that palm oil prices coming down and finally been going below soybean and sunflower last year. Throughout the year, what we saw was the palm oil remaining quite expensive.
By end of this quarter, finally palm came down and now been priced below soya and sunflower oil imports for the country for the oil year 2024 and oil year 2025. What we have seen since November 2024 is that November 2024 was the only month when India imported more than last year. However, since then in December, January till March 2025, what we have seen is total imports in India have come down predominantly of course because the palm remaining quite expensive oil as compared to soya and sun, which finally now been corrected. Our expectation is that going forward we should see a different trend of imports coming into India. On industry trend, this is as per the Nielsen, the edible oil including mustard which is on refined consumer pack, the edible oil has not seen any encouraging number when it comes to industry.
For Q1 2026, the rural grew by 3% whereas urban grew only by 1%. The overall industry more or less remained flattish at 1%. Similarly, in the wheat flour, the overall industry grew only by 4% with the degrowth seen in urban areas whereas rural area was growing at 19%. When we look at Basmati, for this we don't have a rural- urban breakup. Overall industry in Q1 2026 grew by 7.8% versus 5.5% that we saw earlier last year. On the business update on edible oil, we did close to 960,000 tons of volume, food and FMCG 260,000 tons, and industry essentials 360,000 tons, delivering overall volume of 1.58 million tons, which is down by 5% as compared to last year. On revenue front, the revenue grew by 20% predominantly because of the prices of edible oil going up, staying high as compared to last year.
That's the reason why the revenue grew by 21%. When we look at these numbers excluding the government-to-government business of rice that we had opportunity to do last year, if we exclude that, the degrowth in volume is flattish at 2% negative whereas revenue grew at 21%. On overall company highlights, alternate channel for us continues to grow, now revenue at INR 9,000 crore-3,900 crore+, maintain a strong growth momentum. Quick commerce continues to excite us and it's growing very fast, increased by 73% in Q1 and 79% on YoY basis last 12 months. Branded export is another thing where we saw encouraging numbers. It grew by 22% and has now surpassed INR 300 crore of revenue. Q1 EBITDA at INR 520 crore, down by 60% due to high base of last year.
When I said high base, it's more to do with the favorable commodity cycle that we saw last full year. Strong last 12 month EBITDA of INR 2,384 crore, which is quite close to one of the highest numbers which we have posted last year of INR 2,474 crore in FY25. Overall volumes declined by 4% excluding palm. We look at edible oil revenue at INR 13,415 crore, up by 26%. Raw material prices in Q1 were around 30% higher as compared to this quarter, and that's why the revenue in edible oil grew by 26%. Q1 volumes were impacted by multiple headwinds. We do expect improvement in coming quarters. Palm oil prices have now dropped below the soy oil prices, as I said earlier, leading to normalization of our palm oil sales towards the end of the quarter.
The recent reduction in custom duty has also curbed the imports of refined edible oils from some of the SAARC countries under the Free Trade Agreement, and we expect that this will have some kind of favorable impact on the volumes that we will be able to post in the coming quarter. Edible oil portfolio, when we look at for last three years, continues to grow at 11% CAGR. Quarterly trend sales grew at 5% CAGR, and of course they have been able to sustain the EBITDA volume. EBITDA trend also at plus of INR 350 crore. The capacity utilization in edible oil is at a comfortable level of 59%-60%. We have enough capacities left to absorb any future growth that may come up. When we look at food and FMCG business, we clocked a volume of 260,000 tons, down 5%.
However, the revenue at INR 1,400 crore + is 4% plus. If we remove, if we are excluding G2G business, it grew by actually 4% year on year. In the first quarter, the profitability for the food business in Q1 has improved. There are some interventions that company has done on rice, wheat flour, and other wheat products as resulted into this profitability. Wheat flour business in packaged atta gained market share in last 12 months, so now our market share has gone up to 5.5% against 5.3%. Pulses, besan continue to show a strong territory. Both grew in a strong double- digit growth in Q1. Soya nuggets, one of our sub segments in the food, continues to grow in double digit and also continues to grow on the margins as well. Sugar, poha also we have seen encouraging results where it grew by double- digit.
When we look at the food FMCG also in last three years, the volumes grew by 11% whereas the revenue has grown by 18% in last three years. When we look at last three years quarter standalone EBITDA is something consistently we have been able to grow is at INR 82 crore in Q1 2023. We are adding new capacities in the pool and after this IPO project completion we will have more capacities coming in into the wheat flour as well as rice business which will help to grow these businesses. Industry essentials we did a volume of 360,000 tons which is 6% year- on- year growth with a revenue of INR 2,230 crore which is again 12% plus and segment revenue segment result of INR 100 crore. This is basically a oleochemical and castor where both these businesses are doing fine and are today at 100% capacity utilization.
When we look at the subsidiary, the recently acquired G.D. Foods which is manufacturer and also have a brand Tops which is quite a strong brand in North India. Manufacturer of sauces, pickles, jams and various condiments. The revenue for Q1 was at INR 96 crore which is up 9% year- on- year. We have seen healthy profit also coming up from this acquisition. There are a lot of P&E interventions. It's only 75 days since we actually took over this company. We have done couple of interventions and initiatives post acquisition which includes rationalization of manpower, setting up strong controls and process institutionalizations around the processes, leveraging operational efficiency. Operational synergies with AWL is one of the things which is under process right now.
The plan of course is to leverage AWL's distribution as much as possible so that we can grow the basket of this market of this company from North to other territories in India. Of course we would try and do some bundling with the Fortune products so that this product reaches to more and more consumers. Automation is something which we are looking at to see how can we automate the processes because currently many of the processes are still on a manual. The objective of all these intervention is to bring in more and more operational efficiency into the entire process. On Bangladesh, I think the situation or the current status of the business is stable. For last two quarters we have seen no major endurance in doing business. The liquidity is quite available.
Dollar availability is there in country and we have been able to do a business really without any intervention from the government. While the World Bank has set the GDP growth at 4% level for the 2024-2025 calendar year, we hope that even with this kind of growth also our business should be able to grow with a fresh liquidity. Some IMF should also further improve their foreign exchange reserve for the country. Therefore, our expectation is that at least for next one year the things would remain stable in the country and our business should be able to do what we used to do before the turbulence on GTM and QCOM. Now we reach close to 870,000 outlets directly and the growth in urban outlets is 11% whereas growth in rural outlet is 26%. Our rural town coverage now has gone up to 55,000.
In March we were reaching to close to 50,000 towns. This has actually added more infrastructure for us to grow in a rural area. We have been doing a lot of interventions to ensure that food and oil, the entire distribution is used both for the oil as well as the food. We are also doing a lot of intervention in technology side. 100% of salesmen now carry SAP software. Similarly, we are implementing auto-replenishment system to reduce fill- rate gaps for e-commerce and other players including MFs. We are also experimenting on the depot networking and delivery models for a limited product assortment in the rural deepest. QCOM continues to excite us. In Q1 2026 the overall alternate channel grew by 12% whereas the e-commerce grew by 33% and QCOM grew by 73%. That's encouraging. I think it's going very fast. Continues to grow fast.
We are sharpening capabilities to optimize sales in this fast growing QCOM channel by doing a lot of things like improve product assortment, better availability. We are also trying to track the competition prices and their offers which are available on the site and also the data- driven promotion that is something we are resorting to. When we look at the return on capital employed for the last 12 months ended June 25th edible oil delivered an ROCE of 18% whereas food and FMCG did 2% since it's still under the growth or investment stage. Industry essentials at 17% and at the overall company level we delivered the ROCE of close to 11.5%-12% kind of number. This ROCE will continue to improve as we go forward from here on 12- month basis.
When we look at ROCE and capital employed for last three years trend the edible oil is consistently improving from 14% to now going to 18% in past 12 months. June 25 food FMCG continues to stay within the range and similarly industry essentials consistently doing 15% plus kind of ROCE. On the marketing side, there are a lot of interventions that we did from rural interpretation, rural penetration to high impact rural branding and all that. These are some of the glimpses of all the events that we did to capture a lot of festivals, whether it is a view or any other, even including Rath Yatra which has recently concluded. The recently released Nielsen reports now suggest that AWL is the 8th largest player in India's FMCG sector. This is by market share, which they have come out in Q4 2025.
Now AWL is ranked two in value growth and it is now ranked six in the volume growth among the top 10 players. When we look at in value terms, after Mondelez, AWL is second, and when we look at the volume growth, we are the sixth after Mondelez, Parle, HUL, Britannia, and Nestle. ESG, we continue to do our bit on all environment and social and governance part. We have been trying to save, doing a lot of projects to save the cost, whether it's the steam or power or water. We have been continuously planting trees. June 25, we planted 190,000 trees. We are consistently working on putting solar panels or renewable energy into our plants. Now 16 locations have got renewable energies and close to 10 MW of energy is manufactured or supplied through renewable sources, which is close to 11% of our overall requirement.
We continue to do a lot of work on rainwater harvesting and we also continue to do how can we use or reuse the water, and in that direction we have installed Zero Liquid Discharge system in our 11 plants with a capacity of 3,100 kiloliters per day. On the logistics front, we are dispatching more and more through multimodal. Close to 22% of our dispatches are through multimodal and dispatches through the green fuel, which is PNG, is close to 10%. We have been awarded green points by the railway for dispatching goods through railway, which is a green energy used for this status. We do have an inclusion of AWL in FTSE4 Good Index. This is all from my side as far as the brief presentation on the performance of the company is concerned.
Now I will request the moderator to open the floor for question and answers. Besides me, I have Mr. Mallick and Mr. Saumin Sheth and we'll try to answer your questions. Thank you.
Thank you very much. We will now begin the Question and Answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Abneesh Roy from Nuvama. Please go ahead.
Yeah, thanks. I have two questions. My first question is on rice business. Since the time you acquired Kohinoor, what were the initial expectation and what will be the expectation in the next one to two years, and what could have been done differently? If I see performance of LT Foods and other listed players, we see their stock and their business doing far better. I do understand they have a big exports business which makes their business model very different. Given that constraint and given the kind of performance we have seen last two years, what is the way forward in this business? I know it's a challenging business. What will be the way forward next one to two years? Where do you see the rice business?
Okay, Abneesh, good question.
First is that Kohinoor that we have acquired in May 2022 is for the domestic operations. Export rights still continue with the original owners. Our job was to expand Kohinoor in the domestic market. When we took the brand, the volume was around 37,000- 38,000 tons per annum. From there we have now pushed it to around 45,000 tons. Not a very big volume jump. One of the principal reasons is that we did not have our own plant to support the large manufacturing. We had outsourced or hired four plants in Haryana to match the requirements for both Fortune and Kohinoor. This year, with our Gohana plant now getting ready and having started operations, we are confident that the supply chain will become much more robust. When you want to go for expansion for both domestic and export, you need your own facilities.
Buyers from abroad want to see our facility. At least now that is ready. As far as Fortune is concerned, we are already exporting to over 45 countries and we have very good market share in Australia and New Zealand. We are doing well in the Middle East and we are looking for expansion in Europe, Saudi, and the U.S. When you look at the competition, they are formidable. They have been there in this business for over 40 years. They have a first mover advantage. We have slowly built it up. Basmati rice is growing at double- digit this year and our market share has grown. Going forward, we are confident that Fortune and Kohinoor put together will become a formidable third brand, third big combined brands together to fight the first two and that is one.
Right? What will be your current market share in rice in India?
MAT, if you see 8.3%. MAT June, but quarter- on- quarter we have been
going MAT is 7.3%.
7.6%.
Okay, okay.
This quarter is 8.4%, so quarter ending June is 8.4%. We have done a little better. It is slowly growing. I can tell you that we are on the track to get higher market share in days to come.
Understood. Now my second question is on the edible oil business. When I see the gross profit and EBITDA, both are down. This is from a P&L perspective in rupee terms, so they both are down YoY and quarter- on- quarter. I do understand in Q1 the volatility was on the higher side. Now that the duty cut has happened, if you could clarify, because of the duty cut or because of any other reason, was there any inventory loss you want to call out in the edible oil business because of these two? Now, assuming volatility is less, and I did hear your interview in the media post results, how do you expect the gross profit and EBITDA from a rupee terms?
I do understand you measure from a per liter or per ton perspective, but ultimately from a listed company perspective, P&L in rupee terms is also equally important. From that perspective, how do you see the edible oil business? If you could answer all of this, and from an urban demand, when I see consumer update of other listed companies which have come, they are saying urban there is some bit of recovery, some are saying good recovery, some are saying versus behind. In your opening comments I did not find that. If you could comment from an outlook perspective in your core business, how do you see the urban demand?
First I will start with urban demand. If you see the Nielsen report, they are saying Q1 last year, that is January, February, March 2023, that is Q4 of last year, there was zero growth, and this quarter they are saying is 1% growth. Now in edible oil, we have seen the country has imported less, the prices were on the higher side, and that is the reason possibly the government thought of cutting the import duty. Edible oil has not seen much growth, both out-of-home consumption, institute consumption, as well as in-home consumption. Going forward, what all has happened? One duty cut has reduced the price by almost INR 8 a liter. That is, one, two, between CPO and Olein. The differential duty, which used to be around 7.5%, 7.25%, has now become 19.25%. That is one.
That's a big jump that we have seen, which the industry always wanted, and companies like us who have very large palm oil refining capacities will surely gain in terms of capacity utilization and reducing the cost. Second, palm oil coming down is another big advantage for AWL because AWL is the largest importer of palm oil in the country. When the prices are low, institution business is good. Household business will also be good because palm oil has a very large household base in South and parts of eastern India. We see AWL being the second largest brand, so obviously we have all the advantages to capture. I think going forward AWL is well poised for growth in edible oil. Now as far as margin is concerned, Shrikant, you can talk.
Yeah. Abneesh, on your margin question, I think very fair question to ask that at the end of the day what is the absolute EBITDA that you see that edible oil will be delivering? I think assuming that we continue to deliver the quarter EBITDA margins of anywhere between INR 3,600- INR 4,000. That is what edible oil has been delivering for last couple of years. The volume growth to which we have always been saying that in edible oil we cannot grow more than single digit which is 5%- 6% kind of number. With that, keeping that in mind, I think the range of EBITDA in absolute term for edible oil can be anywhere between INR 375 crore- INR 400 crore for the quarter as we go forward.
Any inventory loss you want to call out in Q1 either because of the custom duty cut or palm oil volatility.
No.
So.
Duty cut, whatever the, you know, I would not call it an inventory loss as our assets, but whatever heat has to be taken, we have already taken, and that is reflective in these numbers. As we go forward, if things stabilize and palm prices remain below soya and sunflower, I think we will, we should get better palm demand, and we should improve more margins, and more margins should be able to help us getting better absolute EBITDA for the edible oil. On this
I would say that see the duty cut was quite steep, 10%, and at any point of time there are packed oil inventory and some duty- paid stocks in the plant because you run the plant on a continuous basis, but the brand supports such kind of shocks, at least minimizes it to a large extent. We have overcome that, I would say, and still continue to deliver as promised in our EBITDA terms.
Sir, on the urban demand, one last
follow-up question, and I did not get the clarity.
Let's leave aside Nielsen numbers because it may or may not be giving the true picture.
My question is, you did say because of palm oil price correction, you do
expect both B2B volumes and B2C volumes to go up? That's a logical statement to make given the overall cost is down, food inflation and general inflation is at a multi-year low. What is your personal expectation on volumes? Given all this, you would be expecting a good recovery, right? Next three quarters on the edible oil
volumes.
See Q1 we lost 1% in palm oil, as simple as that. That is because of the high prices of palm oil. That reduced our market share as well as we didn't grow. Now going forward these changes that have happened is adding benefit to us because we have the largest infrastructure for refining palm oil in the country. We have the largest capacity to refine crude palm oil to refined palm oil, and that gives us a lot of strength. With the differential duty now so good that importing will not be viable. These are some of the advantages that we have. Second, with palm oil coming down, there are a lot of markets where palm does better and we have an advantage. I think single- digit growth surely should be there.
Okay, understood sir. Thanks. That's all from my side.
Thank you. We'll take our next question from the line of Harit Kapoor from Investec. Please go ahead.
Yeah, hi, good evening.
My first question was on the FMCG side. You know, this quarter you have a
clean kind of more branded base because
there is no, you know, the government orders. You've also reduced the share of the non-Basmati business, which seems to have resulted in like a 5% EBIT margin for this business. I just wanted to get your sense on, given that you've done this consolidation, how do you see the profitability for this business for the year? The year has started off better than what you would have earlier expected, or at least on the margin side. I just wanted to get your sense because this is the highest EBIT margin you have done in your quarter, the highest absolute EBIT you've done in a quarter. Please help us understand the trajectory of this profitability for the balance here. Thanks.
See, all these days we have been very clear that we want to drive volume and we felt that is the most important thing and we have been driving volume at the rate of almost 18%- 20% per annum, people growing in food. We found that there are certain places where we can re-look at the strategy where the brand share is not so high and ability to earn higher margin was not there. We started consolidating the regional rice or what you say non- Basmati rice. Now in non- Basmati rice there are few pockets which are very good like say Sona Masoori in South India or Miniket Pascatini. These are all brand- driven and we drive it through our brand Bear.
We have good margin, so we have concentrated in these markets and these types of rice and got out of UP and Bihar rice where we were not making any great money. In Basmati we found that there is great opportunity to increase volume and increase margin and we have been pushing brand both Kohin oor and Fortune and you would see that in our market share, more retail penetration and visibility of the brands in terms of rice availability. We have done a lot of schemes and work with Reliance and other retail outlets. Within e-commerce also we have done a lot of work to create visibility of the brand. In food we have been concentrating both on top line and bottom line together last one quarter.
Going forward, once this is stabilized, we will surely push volume because that is what will give us advantage in years to come.
Got it. This margin number is, you would say, is a little bit, not one off, but it's not reflective of the fact that you want to drive up the volumes further?
It's a kind of quarter of consolidation
at the bottom end and then hopefully you'll drive up the volumes again, which brings this number down a little bit but still maybe a little bit ahead of what you were probably expecting. Is that the way to think of it? I mean, is there a broad range that you think you can talk about for this year and where you will be on this side, or is it still that kind of low single digit number that you will go for for this year and then expand it over a period of time once the scale builds up?
No, I think Harit, what you understood is absolutely right. That's what Mr. Mallick said, that while in this quarter we tried to consolidate some of the business and therefore the margins result in margin that what you are seeing.
As we go forward, I think this business will remain in investment and growth phase for sure. It's not that we are now would be concentrating only on the margins, of course with a complete focus on the top line with the eye on the margin as well. Therefore, not necessarily that we can replicate what we have been able to deliver in Q1. Yes, our commitment to grow the business volumes by double- digit is something which we want to drive. However, having said that, the margin structure will surely be better than last year.
Just one question on the oil side as well, I know you spoke of this, was that this quarter it seems like there was an inventory loss in June that would have, I won't say partially been offset by the derivative benefit that sits in your other income but
also shows up in your EBITDA plus
other income segmental number. Is that the right way to think of it? Because if I look at the EBITDA it is still in that three and a half to INR 4,000 range, right, on the edible oil business. If that's the case then I would say this quarter also is broadly representative of what you should be doing going forward, maybe plus and minus.
Yeah, absolutely right. I think what you have seen in this quarter, more or less plus minus, we would be doing as we go forward from here. Therefore, when you look at it, because the entire scheme is like this, I mean that's where the hedging comes into play. You have an inventory loss, it has to be compensated by hedging yields. Therefore, one should look at putting everything together and your reading is absolutely right.
This is our normal run rate of EBITDA otherwise also and we should continue to deliver in coming quarters.
Great. One last thing, you know, even on the industry essentials this time the profitability looks a little bit on the higher side. Is that in your view also a little bit of, in a way, a little bit of a one-off INR 100 crore EBIT for the quarter and, if so, in which part of the business is it? Is it in oleochemicals? Is it in castor? Is it in the oil cake side where the numbers are a little higher?
Yeah, so you're absolutely right. There are three elements to it. One is castor, oleochemicals, and the other business which is basically de-oiled cake, soya, castor seed, and mustard.
I think the EBITDA which you are looking for this quarter is actually on the higher side and not necessarily you may see in the coming quarters because there is a one-off in our de-oiled business. Our endeavor, of course, will remain to see that we continue to match this but depending upon how the markets behave.
Got it, got it. Thank you. Thanks very much.
Thank you. We'll take our next question from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead.
Yes, good evening, and thank you for giving an opportunity.
Am I audible?
Yes,
Please go ahead.
Yeah.
Sir, I have a couple of questions. First on the food and FMCG margin side. With quarter one delivering INR 75 crores
of PBT and 5.3% margin in food and FMCG, can we expect
this segment is delivering positive in every
quarter going forward for 2026 and especially after post Gohana ramp up?
What was your view in this?
Yeah, I think this is what we have been saying on the food, that food business today remains in an investing and growth phase, and we by default are running it as a break-evening on the EBITDA kind of level. Whatever number you are looking at for the first quarter, I think, and this is what we were explaining, is something which came out of some consolidation that we did in rice business. Going forward to all the other quarters, I think you should see the food business giving better EBITDA than last year. That is what I can only say.
Okay, on the next question regarding the
geography expansion like after achieving a stronger margin
in South India, which is an under-penetrated region, now the so working with the
What was our next key focus for
land sales expansion in this segment, in this area.
See, we have to see product-wise expansion. Now, South India still, I think, should continue to be in our focus because if we want to increase our palm olein packed oil business, sunflower oil business, Atta business, and Basmati rice business, South India is the largest market and the best- paying market. Let us be honest on that. All these four products go together in South. We will concentrate in South.
Work more hard so that we get
into better markets and more share. We are not having great share there, and we have great opportunity to do that. Second is Maharashtra and Madhya Pradesh. These are some of the potential markets for soybean oil , and we feel that we can do better. With our Hazira plant now having better stocks, both sunflower and soybean, we will be able to supply better from Haldia. Also, we have expanded our soybean facility. Chhattisgarh was always covered from Haldia where we had shortage of oil. Now, with 1,500 ton plant new coming up there which has already commenced operation, our supply chain is now much more robust. This year, coming July, August onwards when the festive season starts, we should go well. Everywhere, what we do is that each market we are seeing which product does well, and then we are going ahead.
Mustard oil also has a great potential in rural market of UP, Bihar, Bengal. We are putting a separate brand and separate team to only work in the rural market. Product by product, market by market, we are segmenting and then moving.
Okay. Okay.
Thank you for detailed explanation regarding this.
Thank you. Thank you so much.
Thank you. We'll take our next question from the line of Kunal Shah from Jefferies. Please go ahead.
Hello. Thank you for the opportunity. My question is on this regional rice consolidation. Can you give us some sense of how big the business was, let's say last year, full year, and by what percentage have you scaled it down? If you can give some sense on that in absolute crore terms, it would be helpful.
See, last year, full year non-Basmati rice, we were doing something in the range around 50,000 tons- 60,000 tons, which were principally from Bihar, Uttar Pradesh. We had two plants in Raichur, one in Kathagi. We have consolidated there, one in South. We were doing something in Maharashtra. We did some planting in Gujarat, Khambat area. We have consolidated all of this, and we are trying to see where there is association of brand. We are going ahead with it because e-commerce is now doing well in non-Basmati rice, particularly 5- kilo and 10- kilo. We are trying to push
regional
rice more through e-commerce, more through modern trade, more through E class outlets so that there is brand saliency and we get much better margin. Simply trading in non- Basmati doesn't give any great margin or only it gives you volume. We have tried to consolidate it and are trying to put more concentration in our Gohana plant where a new Basmati line has come up, which will add to almost 200,000 tons of Basmati rice.
we can process there.
We are concentrating to build that volume.
Kunal, just to answer your question, last year same quarter we had NPR volumes of close to 180,000 tons. Now these 180,000 tons include that G2G business also for the very sizable business. Against this 180,000 tons, this quarter we did 60,000 tons. If you normalize with that G2G business also, it's quite a significant reduction of 30%-35% on the NPR portfolio. As Mr. Mallick said earlier, there are certain varieties of NPR where now we are coming out and we would be only focusing on the branded NPR rather than trying to sell it on a bulk basis or a loose basis.
Understood. Understood. Actually, what I was trying to arrive at is this growth excluding G2G of I think 4% in foods which you have shared. If I were to also take out this regional rice, what would that number look like?
If you can give any sense on
that.
Almost 0% growth then.
In
volumes it will be flattish. If I take out the G2G and the regional rice which we have stocked, if you take that out it is almost flattish growth, indicating that wheat flour business can be pushed further. Bulk- pack and wheat flour B2B business was little less this year. Wheat flour pulses also did not do as well as we expected, because the government had opened up the yellow pea import. The market of pulses came down, particularly Chennai, and we have very big chana processing capacity, both Chennai to chana dal basin. That market also we found that it did not grow the way we expected.
Understood. So roughly flat volumes if both of those are excluded. The second related question was, I remember last call you had given this long- term two- to three- year expectation of INR 10,000 crore in revenue. Any thought on, I mean I think earlier expectation was FY 2027. Any thought on where, when do you aspire to reach that number now given you are taking this consolidation.
If you take our last 12 months, it is around INR 6,100 crore. Exit t his year, March 2026, we should be in the range of around INR 7,000 crore. We need another 30% growth to grow. Volume growth and value growth both will happen simultaneously. Because Basmati rice is at its very low prices, we see an opportunity to grow good volume and value. Dal, besan, our new lines have come up in curry this year. That will add to our top line and bottom line. Our Gohana plant will be ready. The flour mill will be ready by August- September. That is 350 ton refined flour, 200 ton chakti atta. That will add to our top line, bottom line. All put together, we should be very close to INR 10,000 crore by exit 2027.
Understood, understood, understood, understood. That's clear. The second is on the G.D. Foods business. You mentioned INR 95 crore, I think, turnover this quarter. What's the sort of EBITDA margins that this business can do, let's say, in two- three years from now? I mean, not looking at any near-term guidance, but from a two- three- year standpoint, what's the sort of number which you would aspire to do here?
No, I can give you what this business is delivering today. This business is today delivering a gross margin of 52% and EBITDA margins of close to 11%. That is already there. I think as we consolidate these operations and we do a lot of interventions from AWL in terms of sourcing and distribution and we take the volumes up, surely we should be able to deliver better than what it is today.
Understood, understood, understood.
Just final bit, with Gohana now done, what should be roughly the CapEx on a full year basis this year? I mean, I think INR 500, 600 crore, that would be it, right?
Yeah, I think that should be enough because after Gohana we have enough capacities. In our business the CapEx keeps happening because of your territory expansion or market expansion. You can safely assume INR 500 crore-INR 600 crore of CapEx every year, of which INR 100 crore would, of course, be maintenance CapEx kind of.
Understood, understood. Thank you, thank you. That's all from my side.
Thank you. We'll take our next question from the line of Harit Kapoor from Investec. Please go ahead.
Yeah, this one, bookkeeping was, you know, on the interest cost side. So, you know, it's a bit lower this quarter also. With the reduction in the duties, your payables are trade taxed. However you classify that, that also will go down because inventory requirement just comes down in wiki terms. Should that benefit you a little bit on the interest cost side going forward also? Is that a factor also next two, three quarter we should expect?
Yeah, yeah. So interest cost ideally should go down in next quarter. When you look from a quarter- to- quarter, like if you look at quarter two on quarter one, it should go down. However, the quarter two versus quarter two of last year, it may not because quarter two last year didn't have this duty hike and all that because duty hike happened in September 2024.
That rationalization may happen over the year. Yes, with this duty cut and interest rate softening, we should see savings on the interest as a whole.
Got it? Yeah, that was my question. Thanks.
Thank you. We'll take our next question from the line of Dhiraj Mistry from ICICI Securities. Please go ahead.
Yeah, hi. Good evening, sir.
My first question is regarding this alternate channel. We are seeing very phenomenal growth, especially from the quick commerce channel, and it is now contributing a very large portion of our overall revenue. Can you give us some clarity in
terms of what kind of product we
qre selling or let's say what kind
of mix we have in that. Likewise, what is the profitability when we compare it with the general trade channels?
Okay. As far as e-commerce is concerned, in e-commerce now mostly everybody is.
Now becoming quick commerce. When I say quick commerce, we
have both food basket and vegetable oil basket. All our products, all our brands are registered, and we have complete range available in all the channels.
That is number one.
Number two is that in oil we have almost 35%- 40% of the share. In some of the oil like rice bran, mustard, we have over 50% market share in any of the e-commerce channel.
Whether you take it Zepto or Instamart, anybody you can talk.
That is one. On food we have
registered all our products, and we have
different market share in different type of products. If you take Atta, we have around 15% share. We take Basmati rice, around 12-15%. Based on 10%-12%, like this, we have different market share in different and the demands are there. Our volumes are growing phenomenal. 73% growth we have seen in e-commerce. Advantage is that we have used it to ensure that fill rates are almost 85% to 90%. What counts is your fill rate. If the fill rate is good, we have seen the uptakes are good and sales are better. Margin- wise, e-commerce pays better.
Got it? No.
My question was regarding the mix between edible oil and FMCG, that out of the INR 3,900 crore you said in the last 12 months, what percentage contribution is coming from edible oil versus foods?
When it comes to edible oil, we roughly do edible oil
around,
edible oil is around 50%,
55%,
59% is edible oil, say 60% out of INR 3,900 crore.
Got it. Got it.
60%, which is around INR 2,400 crore, and INR 1,500 crore is food. Food is growing faster.
Got it. Got it.
A margin profile would be also better for foods business in quick commerce compared to, let's say, in general trade channel because lot of logistic cost
would be saving that.
Yes, one is logistic cost. Second is salespeople cost because hardly any salespeople have to go. We have a central department which manages everybody together. Third is that we have benchmarking, so we can benchmark with the competition and ensure that our prices are either very close, a little higher, or a little lower. We have a benchmarking system that enables us to get better margin.
Got it. Got it.
Sir, one bookkeeping question that we have seen is that there is a huge jump in employee cost for the quarter as well as in some of the previous quarters also we have seen that jump. What would be the steady state or let's say annualized employee cost we should assume for your business? Second, can you quantify the one-off amount in other income line item which has seen a significant jump in this quarter?
On employee, I would explain. Basically, the jump which you are seeing in employee cost is basically on account of the consolidation of G.D. Foods now into these numbers. When you are comparing with June 2024, it's not an apple- to- apple. One is that. If you normalize for that, the employee cost has gone up by close to 11%-12% as versus last year, which is quite okay. For the full year, if you look at, if you really want to look at full year employee cost number, I think you can take a base of 25 and over that you can apply any number of close to 10% kind of inflation and that we will get it for your market.
Got it. Other info.
Yeah, what was your question? Sorry.
Can you quantify the one-off amount in other income line item?
Okay, so basically it's a derivative or rather I would say some of the hedges which we settled. That was, I was explaining to Avanesh or some other person that when you look at inventory loss you should look at including the hedging. As for the accounting, actually according to us, it ideally should have got classified as a Cost of Goods Sold, but accounting doesn't allow that. Therefore, the one-off is that settlement of hedges. No, so I was asking what is the amount of that one-off adjustment. The amount of one-off adjustment is close to INR 150 crore.
Got it. Got it.
That's it from my side.
Thank you very much, sir.
Thank you.
It is not a one off because it may or may not happen next quarter. It is the way how you do in accounting.
Yeah, I understood that. It's just that I wanted to see what would be the normalized EBIT margin for the oil business?
Because of that, yeah.
Thank you, ladies and gentlemen. We'll take that as the last question for today. I now hand the conference over to management for closing comments. Over to you, sir.
Thank you, everyone, for attending the call and asking the questions. We hope that we are able to answer your questions. Thank you very much. Do keep in touch with us for any further queries. Thank you.
Thank you, sir.
Thank you.
Thank you, sir. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.