Another strong quarter
Adani Wilmar released a strong Q4FY25 business update ahead of our initial expectations. We now expect revenue to grow 36% YoY versus our initial estimate of 19% YoY growth (31.4% in Q3FY25 on a base of 16.9% decline; 4.6% fall in Q4FY24). We anticipate overall volumes to grow ~7% YoY versus our initial expectation of 5% YoY growth (up 5% in Q3FY25; 3% in Q4FY24). EBITDA shall grow 61% YoY mainly due to higher realisations in oil business. Gross margin shall decrease 100bp YoY to 12.5% while EBITDA margins shall expand 48bp YoY to 3.2%.
For FY25, volume shall grow 10% YoY with edible oils volumes contributing 10% YoY increase and Food & FMCG sectors clocking a robust 28% YoY volume growth; retain ‘BUY’ with TP of INR424.
Strong showing led by pricing growth
Demand trends: AWL logged better growth in rural towns versus urban markets, especially in the Foods category, driven by expanded reach and market penetration.
Segment performance: For Edible Oils, we anticipate volume/value growth of ~6%/44% YoY. Higher raw material prices led to higher realisations, contributing to higher revenue growth for the quarter. For Foods and FMCG, we anticipate volume/value growth of ~9%/11% YoY. Smaller categories, including pulses, sugar and poha, continued their strong momentum. For Industry Essentials, we forecast volume/value shall grow 7%/15% YoY.
Channel performance: Q-com volumes reported exceptional growth, marking the best quarter in two years with a more than 100% YoY surge in Q4FY25. This growth reflects AWL’s focus on operational improvements—particularly in product assortment, availability and promotions and advertisements, allowing it to tap into the rapidly expanding Q-com channel. MT channel growth was driven by an uptick in omni-channel sales. Overall, revenue from alternate channels—MT, E-Com, Qcom, and e-B2B—has crossed INR36bn in FY25.
Distribution: The company extended its reach to 50,000 rural towns through the addition of distributors, sub-distributors, and an expanded rural sales force. This represents a ten-fold increase over three years, up from 5,000 rural towns in FY22. Specifically, the south region clocked a 25% YoY growth in branded edible oils and foods in FY25, with the region’s share of overall branded sales surpassing 10%.
Q4FY25E updated preview
We now reckon revenue shall grow 36% YoY versus our initial expectation of 19% YoY growth (31.4% in Q3FY25 on a base of 16.9% decline; 4.6% decline in Q4FY24). We forecast overall volumes shall increase ~7% YoY versus our initial expectation of 5% YoY growth (up 5% in Q3FY25; 3% in Q4FY24).
EBITDA shall grow 61% YoY—this came in significantly ahead of our initial expectation of 40% YoY growth (up 57% in Q3FY25 on a base of 16.7% decline; 0.5% decrease in Q4FY24—due to higher realisations in the Edible Oil business.
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