AWL Agri Business shares up 8%, snap 4-day losing run; should you buy, hold or sell?

Shares of AWL Agri Business Ltd (erstwhile Adani Wilmar) snapped a four day losing run, rising 8 per cent in Thusrday's trade on better-than-feared quarterly results, thanks to strong pricing as volumes and margin kept facing headwinds.

The stock rose 8.19 per cent to hit a high of Rs 283.85 apiece on BSE. Volume headwinds continued, analysts said adding that Foods segment outperformance remains critical for any rerating on the counter. 

ICICI Securities said AWL reported 20 per cent YoY revenue growth due to pricing action, while volume growth was impacted by weakness in palm oil and rationalisation of rice business. Key pressures included low single-digit growth in branded edible oil (ex-palm), with palm drag leading to ~135 bps share loss in value segment.

Also volumes declined 21.2 per cent YoY in Food & FMCG, impacted by G2G base and regional rice consolidation. AWL's overall profitability was impacted by commodity inflation (up 30 per cent YoY). 

"Positive points: 1) supportive policy changes (cut in import duty of crude edible oil) and normalisation of palm oil prices should lead to recovery in edible oil business; 2) branded Basmati saw double-digit growth aided by supply chain improvement, 3) Q-commerce revenue grew 75 per cent YoY," ICICI Securities said. 

This brokerage maintain its 'Buy' call and an unchanged target price of Rs 360. For the quarter, AWL's Ebitda/ton of Rs 3,500. Branded exports grew 22 per cent YoY. 

Nuvama noted that AWL is targeting Rs 7,000 crore in revenue for FY26 and Rs 10,000 crore by FY27E in the Foods and FMCG segment. In the Edible Oil segment, the company expects volume growth in the range of 5–6 per cent with an absolute Ebitda range of Rs 380 crore to Rs 400 crore for coming quarters. 

AWL has planned capex of Rs 500–600 crore for FY26, including Rs 100 crore of maintenance capex. Focussing on expanding in South India in key categories—palm oil, sunflower oil, atta and basmati rice.

"Q1 Volume fell 5 per cent YoY due to underperformance in rice (G2G business discontinued post-Q3FY25; excluding that, volume fell 2 per cent YoY) and sluggish Palm sales. Gross margin/Ebitda margin dipped 340bp YoY/222bp YoY. Factoring in a weak Q1, we are cutting FY26E/27E Ebitda by 6.8 per cent/5.3 per cent," Nuvama said while suggesting a 'Buy' rating on the stock.

The brokerage has rolled forward its estimates to FY27 and suggested a target price of Rs 397 on the stock against Rs 401 earlier.