AWL Agri Business Limited ($AWL)

Ladies and gentlemen, good day, and welcome to the AW Agri Business Limited Q4 FY '26 Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Akshay Krishnan from ICICI Securities. Thank you, and over to you, sir.

Hi. Good morning and afternoon to all. Thanks for joining in for the Q4 FY '26 AWL Agri Business Limited conference call. From the management, we've been represented by Mr. Angshu Mallick, Executive Deputy Chairman; Mr. Shrikant Kanhere, the CEO and MD; Mr. Saumin Sheth, the ED and COO; Pankaj Goyal, Interim Chief Financial Officer. I right now hand over the call to the management for further remarks and process. Good day and thank you.

Thank you very much, and very warm welcome and good morning to everyone who is attending this call. We'll spend a couple of minutes or maybe 10 minutes to discuss about the results. We'll run through a small presentation, and then, of course, we'll open the floor for question and answers, we all are sitting here. We will try and address as much as possible the questions coming in from you all. To start with macro context, I think -- the quarter saw a lot of events happening in and around and particularly the month of March where we saw the Iran conflict regime up and had got an impact on many parameters of the business factors affecting the business, rather I would say, edible oil prices firmed up because the crude oil prices went up. And as a result, the edible oil complex also followed more or less similar increase. Conflict also resulted into supply chain availability of the vessels because the inventories tightness was observed throughout the industry. All the crude-linked commodities went up and as a result, chemical coal, packing material, all costs shot up in the month of March although the impact of all these costs was not felt too much in the March, but I think in the coming quarter, in Q1, most of the industry players will feel the heat of this increased cost. As if this is not enough for the rupee kept depreciating a sharp depreciation that we saw in the rupee in the month of March. And given the fact that we've done a quite a significant portfolio of imports and exports, rupee depreciation is something is we watch very carefully. Export disruption continued in the Middle East because of the Iran conflict. All these events were somehow kept that businesses on the tenterhook and we just tried to sail through all these. Edible oil prices flared up, particularly in the month of March after the company started with Sunflower settling about $1,400 a ton. Soya more or less near to the $1,300 level and Palm ranging between $1,220 to $1,250 kind of level. So what we see today is all the elevated price of edible oil complex, which we have not seen at least in last year. On the performance, happy to present a very good set of numbers for the Q4, we have been able to deliver 14% volume growth and delivered close to 1.9 million volume. We also could able to register highest-ever quarterly revenue of plus of INR 21,000 crores, which is 18% year-on-year growth, both on operational EBITDA and PAT also company was able to deliver better numbers with EBITDA growing by 40% and PAT growing by more than 50% year-on-year on a quarterly basis. Per unit metrics, we have been able to maintain what we have been saying. We have been able to maintain gross margins per tonne plus of INR 12,000 and EBITDA closer to INR 3,400 a tonne for the quarter, which is again a growth of 19% and 23% year-on-year for both the metrics. Similarly, when we look at the full year number, happy to share that we finally closed the full year with 6.8 million metric tons of volumes, which is 4% growth. In this 4%, edible oil grew by 6%, mid-single digits, which is also something we were expecting. We are happy to share that company crossed highest ever turnover of 74,000 plus in the year FY '26 with 17% year-on-year growth. Operational EBITDA at plus of INR 2,300 and PAT, we delivered a PAT of plus of INR 1,000 crores, which is in line with the expectation by the Street and the guidance, which we have been giving to the analysts for past couple of quarters. Again, here also for the full year, the further metrics on a gross profit per ton as well as EBITDA per tonne we have been able to deliver plus of INR 11,500 tonne for gross profit and EBITDA closer to INR 3,500 a tonne. Some of the other highlights for the quarter, Fortune as a brand in oil and food put together grew by 11% year-on-year, which is quite encouraging. Kohinoor brand again for the quarter grew by 39% year-on-year. And all our masstige brands like King's and Raag and other brands grew by 18% year-on-year on volume. On channel, we remain very optimistic about the alternate channel, which is growing very fast for us. It grew by 43% year-on-year for the quarter. HoReCa as a channel on which we are putting focus for last couple of years, grew by 64% year-on-year and the branded exports, which is again also a focus area for the company grew by 48% year-on-year when we talk about the Q4 numbers. Full financial performance. On a stand-alone basis, we did a revenue of plus of INR 20,000 crores with an EBITDA of INR 638 crores, which is 38% plus; PAT of INR 268 crores for the quarter. Similarly, when we look at for the full year, we -- on a stand-alone basis, we crossed revenue of INR 72,000 crores with a stand-alone EBITDA of INR 2,400 crores, which is and a PAT of a little lower than INR 1,981 crores. On stand-alone, again, the per metric ton metrics unit metrics that I would say, continue to be healthy. Gross profit of plus of INR 12,000 and EBITDA plus INR 3,500 for the quarter whereas for the full year, we are able to deliver a gross profit of INR 11,200 of gross profit and INR 3,600 on the EBITDA. When we look at at a consolidated level, more or less similar story. As I said earlier, we could achieve highest ever revenue of INR 21,000 plus crore in the quarter with a PAT of INR 293 crores, which is 54% plus. And for the full year, we crossed INR 74,000 crores of revenue with a PAT of INR 1,000 crores plus. And here also on the key metrics, we remain more or less the same and what the guidance we have been giving to the Street. When we look at the segment wise for the quarter 4, while we delivered a 14% volume growth in this 14% edible oil grew very encouragingly by 17%. Food and FMCG grew by mid-single digit at 6% and Industry Essential at 13%. So overall, all the segment delivered the volume growth. and also the revenue growth at 18%. We had a robust operational EBITDA for the quarter stood at INR 628 crores, reflecting a strong growth of 40% year-on-year. And what we saw is the margin expansion basically was driven by improved profitability across edible oil and food segment. For the full year, while the volumes grew by 4%, but on a segment basis, edible oil grew by 6%, food and FMCG degrew by 4% and Industry Essential by 8%. However, when we normalize these numbers with a onetime government to government business that we had last year, the growth is 6% with edible oil at 6% and food and FMCG at 3% plus and Industry Essential at 8%. The Food performance of single-digit growth is basically coming from 2 aspects. One is we had consolidated NBR business, which we had started a couple of years back. Now we are going and focusing market-specific business and then will slowly grow it, so number one. Number two, during the last full year, the weak prices were more or less range bound that didn't go up in a sense, all the players who bought the inventory or who bought the wheat at the time of harvest. We are not able to get the carry cost the way the small players were able to because they were buying from the open market and pricing their products. So -- we had a very tough competition from private labels and a small player. But I think as we go forward in FY '27, we should be able to overcome this and should be able to deliver a strong growth in the flour and rice business put together. On other highlights for the Q4, as I said earlier also, alternate channel continues to be very focused here for us. It grew by 43%. Branded exports and HoReCa again remains on our priority list. We had a couple of new products launched during the quarter. On edible oil as I said earlier, Q4 it grew by 17%. We crossed a revenue of INR 17,520 crores for edible oil in Q4, which is 19% year-on-year growth. On market share, we have been able to see consolidation in market share of edible oil for the quarter where it improved by 60 basis points, in e-comm and Quick-Comm also, our market share of edible oil continue to remain above 30% level. On FMCG part on -- in terms of the market share, our wheat flour market share more or less remained flattish at 5.3% , 5.4% kind of number, which we had earlier also. But 1 significant improvement, which we saw in the Basmati rice where our market share improved by 330 basis points, and now we are closer to 9% kind of market share from what we had earlier. The segment recorded also -- segment also recorded a profitability of close to INR 35 crores in Q4 and for the full year, we had a segment result of plus of INR 200 crores. So while we have been positive in food. But as we have been saying earlier also that we will continue to drive food aggressively and see to it that we get the top line first and profitability will certainly follow once we get a volume handle on our side. Industry Essential, both Oleo and Castor continues to grow better. Segment recorded 13% year-on-year volume and 11% year-on-year revenue growth in Q4 '26 . Oleo chemical business, which contributes 30% of business continues to remain regrowth forever for the segment and our new installation coming up at Krishnapatnam by end of early Q1 of -- Q4 of '27 should be able to add more volume to this segment. And gradually, we are diversifying into the specialty chemical, which now contributes close to 7% to 8% of the portfolio. On subsidiaries and joint ventures, [ GD ] Food, which was acquired last year, continued to grow. In Q4, the volume grew by 24%, but and full year volume grew by 15%, revenue growth of 21% for the quarter and 12% for the full year. We continue to maintain the material margin at a level of 55% and 54% for the quarter and full year respectively. On general trade distribution, we -- our focus continues to play on spreading the distribution. Now we reach more than 900,000 outlets directly, 970,000 rather, I would say. On rural reach, we are there 63,000 towns lifted of those 63,000 close to 55,000 outlets that build every 3 months. And this is the area where we would continue to focus and grow. Overall, direct plus indirect reach as per the Nielsen is now 2.6 million. So we are reaching close to 26, 000 plus outlet, which is still not the level where we would want to have because the universe overall outlet is more than 4 million. And so there is a lot of headroom for us to grow, which we will continue to do in the next couple of years. Alternate channels, I'll not spend much time. I think we had spoken earlier that it has continued to grow at 43%, revenue growth of 51% and now the quick commerce, which is 1 of the like part -- one of the part of the organic channel contributes close to 32% of the overall alternate channel volumes. We have a couple of new product launches. We launched our new series Fortune premier, a premium brand. in the under which we launched olive oil and also launched cold press mustard oil. So this is something which we will develop currently. We have launched a new range in Delhi, Hyderabad, Mumbai and Bangalore markets, which is where we find the customers are there for such kind of products. As we go further, we will be tapping more Metro and 50 lakh plus population towns to see that this category also expands. Now we have quite a few products at a premium range as well as health and convenience focused pools, which includes soya nuggets, Biryani kits, Kohinoor brown rice and then premium cold-pressed oils. Apart from that, now we have a blended oil portfolio, which is more focused on the health and convenience. And we will continue to develop this portfolio. That is all from my side. As far as the update on the Q4 numbers as well as performance is concerned. I have with me Mr. Mallick who is Deputy Chairman; Mr. Saumin Sheth, who is our Chief Operating Officer; and Pankaj, he is our Interim CFO here. And I request now operator, to open the floor for question and answer. We'll take questions 1 by 1 and I will try to answer. Thank you.

[Operator Instructions] The first question is from the line of Abneesh Roy from Nuvama Wealth.

Firstly, congrats on good recovery. First is, in terms of Iran crisis, we saw 2, 3 levels of impact on the sector. One was, of course, gas availability to a lot of the canteens and restaurants severely restricted for a few days. And then we obviously saw inflation in edible oil, et cetera. And a lot of the local edible oil players would not have been able to manage the working capital sourcing for a few days, the way you would have managed -- if you could tell us on an overall basis, did you gain or did you lose because in Horeca, I think there could have been some adverse impact. If you could clarify on that? And second, of course, convenience food, there was some upstocking for few days because some consumers got worried that availability itself could get impacted. So overall holistic level, what is the impact in Q4 of Iran crisis?

See, Abneesh, on the Q4 per se, if I say, I think the impact is not that much because the prices while prices went up in March, but it also saw recovery of significant demand in the month of March because trade tried to accumulate a lot of inventory, and therefore, we saw a huge amount of demand coming in the month of March. So that to some extent, offsetted any issues with respect to the pricing and other things. One. Second, yes, the prices of a lot of things has gone up like packing material, chemicals and coal. I think all this will get reflected in the Q1 number because these real costs, which has gone up will actually hit because month of March, most of the players were having the inventory -- sufficient inventories to take care of the cost. So this will be impacting in Q1. Initially, we did saw some demand destruction because of this LPG shortage and other things. But after that, we didn't so. But yes, when we got into April, we did see some of the sluggishness in the demand because a lot of people who had accumulated inventories in the month of March are now consuming it. And therefore, we see not a very encouraging demand scenario as far as the app is concerned, but I'm very sure that in the month of May and June, it will recover, and we will have a fairly good quarter Q1 as well.

Okay. And till now, how much price hike you have taken pre-Iran versus now across your products, if you could tell us, given packaging cost will be, say, 20% of your broad raw material, how much hike you would have taken across different parts of the portfolio, specific each, if you can tell.

The packing cost, as I said, will start hitting you actually from the month of April. So there is no question of getting -- taking any price eyes because of the packing material..

So April one I am asking now.

Yes. So in general, the edible oil complex went up in the month of March, close to 10%. And I think that 10% of increase prices and every player has passed it on to the consumer somewhere in mid of March or end of March. So that has already happened. As far as the packing materials is concerned, I think slowly people will start passing it on. But packing material for us is close to, I would say, 2%, 2.5%, 3% of our overall cost, not more than that. And it has gone up by 10% 15%, the overall impact per se would not be more than a quarter basis or a 50 basis point. But as we approach to the end of April, I think we will take the corrections accordingly.

Sure. My second and last question is on alternate channels. If you could tell us total alternate channels as a portion of domestic business, how much it is? And how is the profitability versus the overall business? Is it better? Is it slightly worse? And second question will be part of this. On Kohinoor, we have seen a spectacular recovery. Of course, first few quarters were very challenging. So which means base is quite favorable here. So if you could tell us ex of the base effect, are you now happy with this performance because the base had seen decline and now it's a growth. Are you happy till now whatever has happened in terms of the acquisition? Is it something you're satisfied or still a lot of things left to do here?

On alternate channel, I will answer. And then for Kohinoor I will request Mr. Mallick to revert to your question. So on alternate channel, now -- in edible oil, we sell close to 15% of our volumes come from the alternate channel. And as I said earlier, it is growing by 40%, 44%. Similarly, for the food, it is close to 25% of volume, which comes from the alternate channel. And these channels are certainly more profitable than any other channel, whether it is a general trade or whether it is export, I think we will continue to grow on this. I request Mr. Mallick to specifically answer your Kohinoor-related query.

See, on Kohinoor, we clocked around 50,000-plus tonnes this year, '25-'26 showing a growth of almost 20% over the last year. Kohinoor as a brand has its own salience and very strong in South and Western India. We have concentrated in these markets more. But because of AWL's distribution strength, we have taken it to entire country. And we see good traction coming from Eastern India, where the brand had good traction earlier. But in between, there were no supplies by the earlier companies, but we have taken it and we are not doing it well. This year also, I expect this momentum to continue and even do more. Our Horeca brand is Kohinoor Chef's Choice, which has a legacy in hotels and restaurants and many top hotels want our flagship brand Kohinoor oil. So that way, if you ask me, Kohinoor has come back into full action, and we will see more growth coming in days to come.

Understood. Sure, sir. That's all from my side.

The next question is from the line of Manoj Menon from ICICI Securities.

I have only 1 question, which is, let's say, going into the later half of FY '27. What's your world view on inflation, specifically agri inflation, right? Are there pockets given the disruptions currently, which can impact soya, et cetera. Just your worldview on agri inflation in general going into fiscal '27 later part.

Today's CPI is at close to 3.5 in which food contributes significant 40% of the weightage and food itself which wherein you have all these edible oil and other food stuff is there, it's actually sitting at 3.5. Very difficult to estimate anything right now because in today's world, it's too much of a dynamism there. I think I don't know how the things are going to pan up tomorrow. But if edible oil complex more or less remains same, I think the inflation rate of this 3.5 CPI of this 3.5 to 3.775 should remain same. And demand -- and whether this will have any impact on the demand, I think our industry is more of essential products rather than discretionary products. So the demand distracting generally doesn't happen in our case, what in our case -- is down trading, for which we have requisite brand architecture in place where if a consumer wants to buy a lower brand, we have that brand also to offer to them. So the customer remains within our scheme of the things -- but yes, if inflation goes up, the more impacted are the discretionary spend FMCG products where customers would try to cut.

The next question is from the line of Dhiraj Mistry from Jefferies.

Congrats on good set of numbers. Sir, my first question is related to Foods. The kind of improvement is what -- in terms of margin, what we have witnessed in FY '26 because of restructuring, can we assume that now this kind of profitability is a new base going ahead, if not material improvement from year on, it can stay at current level?

See, that's what we have been saying that the food profitability is something which all depends upon what kind of opportunity that we will get in the market to grow the top line. And therefore, our first focus, of course, will remain to grow the volume. And we have been saying this that at least till end of FY '27, the priority will always be our top line and not the bottom line. But whatever level we are today, I think we should be able to continue but maybe we may become a little aggressive as the opportunity comes during FY '27 to see that we give priority to the volume over the margins.

Got it. Got it. And in terms of new product launches in Food segment, the kind of premiumization what you are trying to do in edible oil with the recent launch -- is there any particular action you would like to highlight in field segment where you are trying to drive premiumization and improve your gross margin as well as overall profitability.

Yes, absolutely. I mean, these all all look at this category of premium products will certainly has got a better margin profile on the gross margin as well as EBITDA. But right now, they are at a very small scale. So it doesn't change the metrics at our overall scheme of the things, but premiumization is something -- it's not only limited to these niche products which we are launching, business product is just a beginning. I think over the years, we will develop this into a bigger category. But premiumization, we continue to do in other markets, other products also, which is our normal Fortune brand where we have both the underindexed market and over-index markets. So the markets where we are very strong, we try to work out how can we improve the margins from there. So that process is continuous, should reflect on the carton or unit metrics, which we have been communicating.

Got it. And sir, my next question is related to the balance sheet. What we have seen is that there is a significant decline in inventory while there is an increase in trade credit, what we are -- we are to buy a double oil. How do we read these 2 line items?

No. So basically, the trade credit and the borrowings keep exchanging between the lines, and therefore, what you should be looking at is that overall inventory plus receivable as compared to the borrowings. And if you compare these 2 set of numbers, you will find more or less no major movement within these 2 because sometime we opt for a buyer's credit rather than a trade credit and sometimes we opt for a trade credit as rather than a buyer's credit. So that number keeps fluctuating between the schedules. But if you look at the current liabilities versus current assets, I think we are quite comfortably placed.

Got it. Got it. And sir, 1 request. Can you explain the divergence in your quarterly press release, what you highlighted where you said that the food volume growth would be and 1% and top line growth would be in a mid-single digit, while what you reported a 6% volume growth and 18% top line. Thank you. That's it from my side.

So I think what you are talking is basically between the stand and console. So the consolidated, I think we -- what we are saying is that the 4 volumes where actually 3% growth after normalizing that G2G business. Stand-alone is what we are saying that it is it has degrown.

The next question is from the line of [ Harsh Shah ] from Bandhan Mutual Fund.

Sir just continuing on the comment which you made on the previous participant question that in the Foods business, we will prioritize volumes or margins -- your -- if an opportunity comes, especially you basically wanted to know at what volumes would the margins -- would you be able to maintain the margins? Let's say,

Just to answer your question is really straight. I don't think that we can quantify now because many times opportunity comes in and you are able to grow also and without diluting on the margin. So that's something which is very difficult to say. But what we are actually trying to communicate is that we will have priority on the volume because we would certainly want in FY '27 food volumes to grow in double digit, at least in mid-teens kind of number which we are looking at. Profitability, profitability, I mean, that should be the first. But however, if we have any constraint on that, we will certainly give a priority to the top line, having -- and therefore, it's difficult to say up to what volume you would be a profitable up to after what volume you will not be because it all depends upon what kind of opportunity that we will get in the market as I was saying in my initial commentary that last year, we didn't get any opportunity in wheat flour business because wheat prices didn't go up. And therefore, we had a significant competition coming in from the smaller players. Now this is an opportunity which was not there. If this opportunity comes in this year, I think we will grow volume as well as profitability also.

Okay. So where I was coming from is that -- is it fair to assume that as you mentioned that your ambition is somewhere to be to grow in mid-teens. Is that -- basically, is that the base case for you in your AOP, when you make your [ AOP ] that occupying this is something which we grow. And let's say, if the an opportunity, as you mentioned, in wheat, let's say, from what we are seeing currently, the prices are coming up there. Would that be an add-on to what you are building as a base case of mid-teen growth -- volume growth?

Yes, of course, the base case see certainly double-digit growth, which is mid-teens kind of growth for food, but opportunity strikes and the things comes favorably to us. So we would suddenly try and make it even better than this. That's not a that, of course, is there.

In that case, whatever that 3-odd percent margins, which we have done would be slightly lower.

Maybe. Yes.

And sir, again, FY '26 as well characterized by reversing too many opportunistic calls which we had taken in the previous years, right? So when you talk about these opportunities, are these short-term tactical opportunities? Or there are some things where these are areas where you can create a structural edge or benefit and then build on it because we would not want to see that reversal going ahead as well?

No, no. Of course, these are all structural changes that we want to do. I mean -- and there are only 2 things which happened last year when it with respect to the food. One is, of course, that onetime government to government business, which was not there. And the other is, we are just trying to consolidate the NBR business, which we earlier tried that we will penetrate across India, but then we thought that it is better to go region by region and then build this portfolio. And that's the only change which we did in the Food business. I think that should continue.

NBR is the private label, right?

NBR is non-basmati rice.

Non-Basmati rice. Okay.

Yes.

But let's say, segment by segment, if we think of wheat, the rice and, let's say, others, like, soya, sugar, et cetera. Where do you see -- I mean you mentioned that a few categories are already growing at 30% in your pre-quarter update. But let's say, going into FY '27, which -- where do you see the largest opportunity, sir, let's say, over the next 1, 2 years in terms of growth for us?

The largest opportunity to be very frank with you, it's in rice, wheat flour, besan, and we also have a sugar, which is also a volume-puller for us. So these are the 4 categories and pulses of course. So these are the 4, 5 categories where we see a huge amount of potential to grow.

Okay, okay. And to the earlier comment which you made on wheat, we did not have the opportunity last year because the prices were quite stable and local competition [indiscernible]. So basically, if the prices firm up, would it also mean that apart from growth, even the margins of that particular wheat flour business should improve for us in FY '27 versus FY '26?

No, not necessarily. I think if prices forms up, it will be beneficial to the recognized and big players like us who buy the stock at the time of the harvest because since we are delivering a consistent quality to the customer. And the local players actually doesn't not able to compete with organized players like us. It will help us to build volumes -- not necessarily, it will have impact on the profitability. Yes, it will have if we -- if the prices goes up even beyond the carry cost, so that is completely a margin accretion, which will happen to us because if prices goes up beyond a carry cost, which normally you account for, certainly, it will add to the margins also.

Okay. And sir, on a longer-term horizon, sustainably, what is the kind of margins do you foresee or envisage in the Foods business?

In the food business, we are actually -- if you go through our earlier comments, we have always been saying that food will remain an EBITDA neutral until FY '27. And after that, we will try and build INR 1,500 per ton to INR 2,000 a ton kind of EBITDA in the food from FY '28. So this is what we are working on while we are delivering it today also. But that certainly doesn't mean that it is something which is sustainable, at least for the year. But that's what we are looking. And then from there, that some of the journey will start wherein you should ideally get to a margin level where you start benchmarking yourself with your competitor like for us. In wheat flour the competition is with ITC and in rice, we have KRBL and LT Foods. So you have to go to that level. We are not there right now because, of course, we are still at investment and growth phase.

Next question is from the line of Akshay Krishnan from ICIC Securities.

My question is on at what point in time does the business just from the reinvesting gross margin gains delivering sustained EBITDA expansion? And what are the key triggers for this transaction, sir?

So your question is specifically for the food?

For the food, exactly.

Can you repeat the question again?

And what I'm trying to say is, at what point of the business as the shift happens in reinvesting the gross margin gains to delivering sustained EBITDA margins? And what are the key triggers for this?

So I think triggers remains -- I mean, a good market share which you have and only then you have a pricing power to charge prices until that time, you are just playing aggressively on pricing and growing. I think food anywhere closer to or anywhere more than 1.5 million tons of volumes, I think we should be able to start consolidating the margins. This year, we closed at 1.2 million. I am hopeful that next year, we will go beyond 1.5 million, 1.6 million as far as the food is concerned from there. I think the consolidation will start on gross margin as well as the EBITDA margin.

Okay. Okay. But technically, you also gained market share in this quarter. So is it that are you focusing more on market share gains [indiscernible] margins then?

Yes, at least for FY '27 for over and maybe some part of FY '28 also. We will certainly give priority to the top line rather than margins.

Okay. Okay. My second is on the volatile team, the oil that's been going on the recent trends. I just wanted to have -- have done any sensitivity analysis on every INR 5 or INR 10 drop or increase in the cost of oil, what is the impact on margins? And how do you protect this price through the pricing measures?

So can you just repeat your question, what I'll suggest that Saumin to come in and answer, but just repeat the question for sake of clarity.

So basically, the recent volatility in edible oil, I just wanted to understand the sensitivity analysis. So for every INR 5 or $5 a $10 decline or an increase in the edible oil or crude oil prices. What is -- how are you managing the inventory? And how are the margins being protected through pricing in this?

I think price goes up every -- our experience says that at every INR 10, we see demand slowing down by 1%. And vice versa as as prices comes off the demand increases. Basically, the international price analysis, we also revised our inventory and supply chain and also depending upon the season than the customers. So depending upon the prices and the trend, we revised and we manage our inventory supply chain.

Okay. Okay. Perfect, sir. The next is on the alternate channel. So you've been scaling up rapidly. And I just wanted to just help me in understanding and pick your brains on who can you quantify the margin different versus general trade? And how this evolves with scale?

No, I think this alternate channel certainly more profitable than general trade because there are less number of intermediaries involved because you are then dealing directly with the e-comm and alternate channel operator. And also the stocks are moving very fast. So you certainly have a better margin profile as far as general trade are concerned. But again, on the alternate channel also, you have other costs which you have to incur because alternate channel is all about ensuring the visibility of your product on the platform, plus you will have to also spend some amount of time some money on ensuring that the fill rate doesn't go down, and therefore, you have to keep supplying to them through your logistical capabilities. So all these costs are there. But in spite of taking all this, it's a better off in terms of margins as compared to general trade, and that's what we are saying we are quite optimistic about this channel growing. It's a channel of the future. And the way it is growing at 40%, although the base is low, that's why the 40%, 50% looks very good number. As the base increases, this growth rate will certainly come down. But I'm sure in the years to come, we will have close to 30%, 35% of our volumes coming in from the alternate channel, which is today at 15%.

So what would be the margin difference versus general trade sir in this?

The margin difference is like our -- it's not more than -- it's very miniscule margin difference. But maybe if in general trade, we are making x percentage, I think we -- the general trade versus this is hardly a 50, 60 bps lower than -- higher than the general trade. -- because in our overall scheme of the things, the margin itself is 1.5%, 2% at the end of the day. So any change in 25, 30 bps is quite significant for us.

Okay. Okay. And 1 final last question. The [indiscernible] EBITDA has improved Y-o-Y, but it's been volatile on a Q-o-Q on a sequential basis. So what is the steady-state range that we should be building in across these cycles from this?

So steady-state range, you can build around INR 3,600 a tonne or INR 3,500 for safer side, you'll take it. I think we should be able to deliver within that range.

Okay. Okay. Okay. Given the volatility that's been going on with this Iran war.

Yes.

[Operator Instructions] The next question is from the line of [ Nilesh Doshi ] from Prosperity.

Congratulations for the strong volume and revenue growth in the quarter 4. Sir, my question is related to whether the Wilmar defined itself is a branded product company or a simple commodity company because we are valued far below the peer group company like the LT Food which has a brand of DAAWAT, KRBL brand, India Gate Patanjali which are trading more than the onetime of the revenue. And we are far below -- because our market cap is around INR 26,000 crores and revenue is INR 74,000 crores. Can you explain the reason for such anomaly, sir?

First of all, AWL agribusiness is food FMCG that we classify ourselves because 70% of our revenue comes from the brands. And I think this is what it's been -- we are saying, and this is how our numbers fare well. Now as far as the valuation is concerned, I will not be able to comment too much on it because it's ultimately a market-driven price discovery. We can only say that the kind of potential that AWL Agri business has got, the investor is taking their own time to understand that potential, and we are quite hopeful and very positive that sooner or later, investors will understand that potential and will give a valuation that we deserve.

Sir, next question, why the management is constantly guiding the margin per ton because we are selling the product on a brand and under the small packaging. When we are selling as a brand and under the small packaging, the margin much more higher than the per tonne basis. So what is the logic to guide the margin per ton rather than in a percentage term of each segment?

See the reason for giving a guidance in margin per tonne is very simple because the product levels at which we operate gets impacted due to the price movement in the commodities, whether it's the edible oil, whether it's a wheat, whether it's the [indiscernible]. And therefore, what happens is that since we operate a very significantly strong brand, most of the time we are able to pass on the price increase or a commodity price increase to the consumer. And therefore, when you pass on the commodity price price to the consumer, your margin percentage actually goes down, but you're normally able to maintain per kg or per tonne of margins. And that is the reason why we say we are not a pure play, a discretionary FMCG product where you try and maintain margin as a percentage of our revenue. Our revenue gets impacted because of the inflationary pressures. And therefore, we say it is better for us order for investing community to track our margins on a per tonne basis.

The next question is from the line of [indiscernible] AMC.

Would like to know what portion of your 10% to 15% growth in volumes in edible oil was real consume demand versus distributor stock of and consumer stock of before the price hike? And are you seeing a slowdown in volumes in April due to commercial LPG issue across the restaurant and eateries?

No, see, in our scheme of the things, the primary and secondary keeps happening hand in hand. So you have a primary in 1 month and say, followed by the secondary in another month. What we are saying is that between 1 month and 2 months, there are certain pipeline corrections between the trade which keeps happening. And therefore, you might see some slums 1 month, which is getting then replicate which is getting replenished in the next month. So it's only a stop gap, which happens between 1 month and another month. I think for us, whatever we are able to sell, I think it's reflective of the secondary itself. And on your second question, does this slowness in the demand in month of April is suggestive to the fact that there is a shortage of LPG. I don't think that is there now in -- on the street, we don't see any shortage of LPG across the country. And coming months, we have quite a few marriage season coming up and therefore, we are hopeful that demand will pick up from here.

Understood. And also, sir, is that the palm oil price reduce. Is it a margin remain stable or we have to pass on the lower prices to the consumers also?

No, so far as when the price goes up or price goes down, since we operate in a brand -- we don't change the prices quickly in the case, whenever the price goes up, we have that ability of passing on the price to the consumer quickly because of the brand. But when the prices goes down, we try and time our time it such that we are able to get as far as margins before passing in out to the customer. So that happens both the way.

Understood. And sir are you also planning to enter in the palm oil plantation business like your peers like Patanjali Food and Godrej Agrovet due to government push?

No, as we speak today, we don't have any plan because our promoter Wilmar itself, they are into a bit plantation in palm in Indonesia and Malaysia. But as far as AWL is concerned, as we speak today, we don't have any plans to get into this.

Okay. And sir, as the industry was do you think the Indonesian government of increasing palm oil usage in diesel instead of importing it will see some sort of a price hike and lower production exports to other countries?

Yes. I'll request Saumin to answer this question.

So as you mentioned Indonesian government has planned to increase the biodiesel consumption to be 50. And that is happening across the world that all the producing countries are increasing their biodiesel blending into the diesel. The main reason is today, the biodiesel is cheaper than the -- diesel because of the war situation. And Indonesia saw the right part to [indiscernible] eventually consume more palm into biodiesel. That may not start from tomorrow, but year the plan is from the second half of the year that may impact the price structure, which may help a palm prices to go up and the other competing oil to remain at a reasonable price spread, which is probably good for AWS because we are -- they are mainly soft oil consumer back very strong soft oil consumer company. So I think eventually, it will help us.

The next question is from the line of [ Advani ] from Industry General Insurance.

Congratulations on good set of numbers. What I wanted to ask is you see -- how have been the traction in edible oil and foods in the month of April? And how do you see it panning out in the month of May and June going forward?

You are talking from the consumption point of view?

Yes, from the consumption point of view.

See, normally, April -- first half of April is always slow because the new year or the wedding season starts from 15th of April. So the first half, we always see a little slow. And then the demand picks up this year, the overall summer -- has set in quite strong, and we have seen very high temperatures, which has cut into the consumption overall. Small disruptions in the out-of-home consumption has been seen. Hotel workers or other workers going away or either for the election or for the wheat harvest season has also disrupted entire labor force in many of the places. So this type of disruption we have seen. Again, after 15 April onwards, the season picks up, and this will continue till June. This year, the wedding season is good. So the consumption normally will be a good one. Harvest has been good. So we expect the rural to do well because wheat, mustard and chana has been good August. We only now have to see how the monsoon sets in. Overall, overall consumption-wise, I think Q1 should be good. April is low, but May and June was pickup.

Okay. So overall, a growth of double digits in terms of double oil and edible oil?

Not possibly double digit, but surely a single-digit growth.

That was the last question for today. I now hand the conference over to the management for closing comments.

Thank you very much for attending this call and keep tracking us. In case of any further queries, you can write down to our IR team, and we will certainly respond. Thanks.

On behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.