AWL margin slips as costs outpace revenue growth
Operating margin fell 1.10 percentage points year on year, while other income contributed 20.82% of pre-tax profit.
Filed 27 Oct 2026, 16:27 IST · after market close · AWL Agri Business Ltd (AWL)
Key takeaways
- Standalone operating margin fell 1.10 percentage points year on year as expenses grew 26.44%, faster than revenue growth of 25.02%.
- Net profit rose 9.86% year on year despite lower operating profit, partly because other income contributed 20.82% of pre-tax profit.
- AWL's 2.77% operating margin was 13.41 percentage points below the 16.18% median of 11 reported FMCG peers.
Price around the results
Revenue grew, but operating profit fell
AWL's standalone revenue grew 25.02% year on year, but expenses increased 26.44%, leaving operating profit down 10.37%. Sequentially, revenue rose 11.68% while expenses grew 12.42%, so operating profit declined 9.08% and margin narrowed 0.64 percentage points. This was the second consecutive quarter of sequential margin decline after the 3.41% recorded in Q1FY27.
Higher interest and other income shaped profit
Interest expense rose 21.74% year on year and 28.64% sequentially, adding pressure below the operating line. The tax rate was broadly unchanged year on year, moving by just 0.01 percentage points, but other income's 20.82% share of pre-tax profit means reported profit had a meaningful non-operating contribution. The company also said global edible oil prices remained volatile and food inflation crossed 7% in September 2026.
AWL remains near the bottom of its peer group
AWL's 2.77% operating margin was below the 16.18% median for the 11 FMCG peers that had reported the quarter, placing it second from the bottom. Margin has been uneven across recent quarters: it moved from 3.87% in Q2FY26 to 2.87% in Q3FY26, 2.32% in Q4FY26, 3.41% in Q1FY27 and 2.77% in Q2FY27.
Management points to food scaling and channel expansion
Management said average long-term EBITDA margins are expected to be 3% to 4%, with Food & FMCG scaling expected to improve margins over the next five years; it also said Food business ROCE is expected to reach 25% or more as the business matures. The company told analysts that General Trade and Alternate Channels grew 24% and 27%, respectively, while Fortune Pulses grew more than 40% year on year. It also said capital is being allocated to the Food business and highlighted new Tops launches including Chilly Oil, Multigrain Choco and No Onion-No Garlic Tomato Ketchup.
Results were filed after market close
The standalone results were filed after market close, so there is no post-results market move to assess yet. Across the eight prior results reactions, the stock rose three times and fell five times, with a median absolute move of 0.99%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹21,410 cr | ₹19,170 cr | +11.68% | +25.02% |
| Other income | ₹71 cr | ₹68 cr | +4.21% | — |
| Expenses | ₹20,816 cr | ₹18,517 cr | +12.42% | +26.44% |
| Operating profit | ₹594 cr | ₹653 cr | -9.08% | -10.37% |
| Operating margin (%) | 2.77% | 3.41% | — | — |
| Interest | ₹220 cr | ₹171 cr | +28.64% | +21.74% |
| Depreciation | ₹105 cr | ₹104 cr | +1.75% | +11.28% |
| Profit before tax | ₹339 cr | ₹446 cr | -24.03% | +9.85% |
| Tax | ₹87 cr | ₹114 cr | -23.50% | +9.82% |
| Net profit | ₹252 cr | ₹332 cr | -24.21% | +9.86% |
| EPS (₹) | ₹1.95 | ₹2.57 | -24.12% | +10.17% |
Operating margin of 2.77% compares with a Fast Moving Consumer Goods sector median of 16.18% across 11 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Fortune Pulses grew more than 40% year on year, with quarterly revenue exceeding ₹100 crore.
- Edible oil volumes grew 5% year on year while maintaining healthy profitability.
Guidance & outlook
- Average long-term EBITDA margins are 3-4%, with continued Food & FMCG scaling expected to improve margins over the next five years.
- Food business ROCE is expected to reach 25%+ as the business matures.
Expansion
- Channel expansion remained healthy, with General Trade and Alternate Channels growing 24% and 27%, respectively.
- The company is allocating capital to the Food business to support its growth.
New products
- New launches included Tomato Ketchup, Multigrain Choco, Chilli Oil and No Onion No Garlic Flakes with Sendha Namak.
New initiatives
- The Tops product portfolio was strengthened through launches of Chilly Oil, Multigrain Choco and No Onion-No Garlic Tomato Ketchup.
Competition
- AWL maintained market leadership and stable market share despite a challenging operating environment.
- The company reported category shares above 47% for Nuggets, 30% for Edible Oil, 29% for Besan, 22% for Sugar and 17% for Maida.
Problems & risks
- Global edible oil prices remained volatile during the quarter.
- Food inflation crossed 7% in September 2026.
What to watch
- Whether standalone operating margin moves back above the 3.41% recorded in Q1FY27.
- Whether interest expense growth moderates from 28.64% quarter on quarter.
- Whether the company reports further Food & FMCG scaling against its stated long-term EBITDA margin range of 3% to 4%.