 "Angshu Mallick")
AWL Agri Business expects demand to improve from July onwards. The company reported a 24.5 per cent year-on-year (Y-o-Y) decline in net profit to ₹236.43 crore in the first quarter of 2025-26 (Q1FY26). However, its revenue stood at ₹17,058.65 crore, which is a growth of 20.5 per cent Y-o-Y, with an underlying 5 per cent Y-o-Y decline in volume. The rice business proved to be a drag in Q1, leading to the fall in volume. After announcing AWL’s Q1FY26 results, Angshu Mallick, the company’s managing director and chief executive officer (MD&CEO) spoke to Sharleen D’Souza in an exclusive online interview. Edited excerpts:
How will demand pan out in the coming quarters as you’ve said you’ve witnessed muted consumer demand?
Edible oil, which was growing at around 4-5 per cent, grew by hardly 1 per cent, or zero growth. This is what Nielsen (NielsenIQ) says. Now we are also saying that Q1 saw very little growth. I found that edible oil prices in April and May were high, and there were rumours that the market would come down and the government might reduce duty. Purchases were delayed as the trade generally waits when they get such news. And actually on May 31, when the duty came down, the market went down by ₹7-9 per litre. Obviously the entire trade got a little disturbed. All this created subdued demand, which impacted the Q1 performance.
Our B2B business was very good, but it got impacted because of the same reason that industry expected the market to come off. That didn't happen in the beginning, and then in the end, when the duty cut was there, they were not willing to buy immediately. The market waited till June 15. As a result, everybody postponed their purchases. And that 10-15 days’ postponement was good enough for 4-5 per cent drop in consumption.
Not only us, everyone had to pass on the benefit to the consumer to remain valid for business. The difference between crude oil and refined oil import duty has now increased from 7.5 per cent to 19.25 per cent, and that is a very big advantage for companies like ours that have a large manufacturing base. It is much better than importing refined palm oil. Prices have also come off by almost ₹8-10. Consumption is again getting back to normal. July onwards, I feel prices will stabilise and consumption will be robust.
How do you expect volume growth to pan out?
AWL as a company will grow at single digit — edible oil will be in single digit and food in double digits.
When will you finish the exercise of consolidation of rice business?
Yes, it is done. Last year. At the same time, we were expanding the regional rice business, because we thought there is a big opportunity for players like us, but we found that it is not a very organised business, and the more we expanded, we were losing control and money. We thought that let's consolidate in those markets where there is a possibility of growing the brand. In the South market, we are concentrating on rice. In the East, Bengal is a very big market for non-basmati rice, because that is what the people consume there. We have stopped working in other geographies like Bihar, and Uttar Pradesh.
How are palm oil sales doing?
Palm oil will surely grow from here for two reasons. Palm oil prices have come down below soybean oil prices. Earlier, it was ruling very high and now it has come down. Also, the refined oil and crude oil differential duty has increased, so earlier anybody could import and sell, now that will not happen. Only manufacturers can import crude palm oil and we will process and sell. So, we have an advantage. These two reasons will ensure that the palm oil business grows. We are number one in mustard oil category. We will continue to remain so and grow. However, mustard oil prices are very high today. It is almost ₹5/kg higher than palm oil prices. In mustard oil, we have to see how the market behaves. But still, we have grown the highest this quarter at 9 per cent.
Is the move from unbranded to branded still going steady?
The thought process remains the same. The story remains the same, that people will shift from loose to packed, from unbranded to branded, and from lower-end brand to higher-end brand. Food inflation impacts the overall consumption of staples. But this year, the prices are low. There is no government intervention, the monsoon is good. It's likely that the consumption will get back to normal.
How do you expect margins to pan out from current levels?
Margins will remain good, I would say. Because we have delivered on what we have been saying on this. Going forward, with everything remaining steady in terms of prices, margin should improve. Overall, we will deliver whatever we have been promising.
