Adani Wilmar Ltd (NSE: AWL) Q4 2025 Earnings Call dated Apr. 29, 2025
Corporate Participants:
Unidentified Speaker
Shrikant Kanhere — Deputy Chief Executive Officer and Chief Financial Officer
Angshu Mallick — Managing Director and Chief Executive Officer
Analysts:
Unidentified Participant
Karan Bhuwania — Analyst
Abneesh Roy — Analyst
Anuj Poddar — Analyst
Sanjay Shah — Analyst
Harit Kapoor — Analyst
Aditya P — Analyst
Kunal Shah — Analyst
Shirish Pardeshi — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4FY25 earnings conference call of AWL Agribusiness hosted by ICICI Securities. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bhuvanya from ICICI Securities. Thank you. And over to you, Mr. Bhuvania.
Karan Bhuwania — Analyst
Thank you, Michelle. Good morning everyone. It’s a pleasure at ICICI securities to host Q4FY25 results conference call of AWL Agribusiness Limited. For the management we have Mr. Anshu Malik, Chief Executive Officer and Managing Director. Mr. Shrikant Kanhere, Deputy CEO and CFO Mr. Swamin Seth, Chief Operating Officer. I’ll now hand over the call to the management for their opening remarks. Over to you sir. Thank you.
Shrikant Kanhere — Deputy Chief Executive Officer and Chief Financial Officer
Yeah. Thank you everyone for joining the call. As a customary process, we will take you through a presentation to run through the quarter four performance of the company and also the full year performance. And after the presentation we’ll open the floor for question and answer. We’ll be happy to take over any questions from the investors. So when we look at the numbers for the quarter four, the revenue volume grew by 8% for the quarter as well as for the year it grew by 9%. Revenue grew by 38% and 24% respectively for the quarter four and full year.
We had one of the best year for the AWL Agribusiness since our inception. Closed the EBITDA at plus of 2,700 crore and a PAT of 1200 crore overall. A good score in terms of all the business parameters of the company. Whether it is a volume growth, whether it is a revenue growth, whether it is absolute EBITDA and pat. We have been able to deliver the great set of number for this financial year. When we look at the return metrics for all the three segments. Edible oil, food and FMCG and Industry Essential. Edible Oil continued to give better numbers in terms of volume as well as return on capital employed at 23%.
Industry essential delivered a ROCE of 17% and at the overall company level we delivered an Roce of 15% which is quite reasonably healthy given the fact that our food business is still margin neutral. It’s not something which is something which is by design that since we are already into investment and growth phase as far as food is concerned, it will continue like this for another two years or so once it start generating margins. I think this ROCE of 15% will certainly look better as we go forward on a segment basis. Of course, as I said earlier, edible oil at 23% and industry essential at 17% is far, far better than what we had delivered in last couple of years.
Whether FY22, 23 and 24. FY22 we had a overall ROCE of 12% whereas now we are sitting at 15% and once the food starts delivering on the bottom line, this 15% should improve from here. On a market context, this quarter also saw palm oil sitting on the top. The prices of palm remained high as compared to soya and sunflower, impacting of course the demand on palm. And that’s where also company had some bit of issues in terms of palm volumes. But this, this, this proposition as we go forward should change. As we we enter into quarter one of FY26, the prices have already started stabilizing and we are hopeful that the palm prices should cool down as we go forward from here.
Just to give you an industry update on the retail sales, how does it look like for the full year and particularly for the quarter when we look at edible oil, the Q4, the edible oil was the industry didn’t grow actually industry was flattish without any growth. Similarly when we look at wheat flour which is one of the significant contributor to our food business also had got a mixed growth where it didn’t grow in urban, but we did saw 12% growth in rural areas. When we look at a Basmati rice again it’s a significant contributor to our food basket.
Full year growth was tepid at only five and a half percent. So the crux of this slide or this message is basically we saw a very tepid demand during throughout the year, particularly in quarter four when it comes to edible oil and rice. On business update. Happy to inform everyone that we got renamed from Adani Vilmar limited to Awl Agribusiness limited And the logic of our new logo of course is like river that nurtures the land and carries stories across the generation. It’s basically a river flowing from A to L which suggests that the company is actually into from a farm to fork kind of logic which which we have tried to build into this logo and I’m very hopeful that with the new name and new logo we will flourish more than what we have been able to do for last 25 years.
On overall company level update Q4 volume grew by 8% Revenue at 18,230 crore grew by 38%. When it comes to full year EBITDA we clocked operational EBITDA of plus of 2,400 crore which is 119% up year on year food and FMCG business grew by 26% year on year for the FY25. Now the alternate channel is reasonably big in our overall scheme of the things contributing close to 3,600 crore of revenue to our portfolio. Within this alternate channel we are quite happy to see that Quick commerce actually increased by 113% year on year in quarter four.
South being one of the focus region for us and as we have said earlier also it’s also under indexed market for us. All the work done by us in south for last couple of years have now started showing the results. South sales volume grew by 25% year on year and now it is contributing plus of 10%. In our overall scheme of the things as far as the branded sales is concerned particularly for the edible oil Q4 we could record a volume growth of 7% healthy volume growth rather I would say highest ever profit in edible oil in FY25 we also saw high palm oil prices which led to market share loss in value for money segment excluding palm.
However our branded oil grew by 6% year on year. As far as FY25 is concerned. Our strategy to continue an improving penetration for the under indexed market is working well and we will continue to work in that market with the help of our food basket and we’ll be investing in a flanker brands to gain market share from the regional players as we go forward from here. Edible oil quarterly sales trend is healthy 6% growing in volume terms we did 1.04 million tons in Q4 25 full year the CAGR of 7%. We closed at little over 4 million tons for the edible oil in FY25.
Capacity utilizations for all our edible oil capacities is decently placed plus of 60% so we still have lot of capacities with us to absorb any kind of growth that we will see in coming years. When we talk about the food and FMCG as a segment, the Segment revenue grew by 9% year on year in quarter 425 to 1400 crore plus for the full year. It crossed 6000 crore mark for the first time. Profitability of the food as we are suggesting earlier also remain at a break even or EBITDA neutral by design. We had some issues this year in the rise because of the paddy prices which crashed this year leading us to a high price inventory in our hand.
So that also has got some impact on the food profitability that we saw this year. Wheat flour business continues very well to grow and gain market share. We are now close to 6% of market share and distant number two player in the country. Branded Basmati rice business also has got some impact other than the price movement in paddy due to the modern trade supply chain issues which we had. We have been able to fix these issues in Q4 and I think we should be able to see the result of all these pictures in quarter one and quarter two as we go forward from here on, highlights of the food and FMCG continuing on Pulses basin as a category continue to grow strong.
All our other products in food and FMCG such like soya nuggets, sugar poha kept growing in double digit. Soya nuggets and poha are the two categories with a very high margin profile with a gross margin of plus of 30% and EBITDA of plus of 15% kind of numbers which we have been able to clock. And this is one of the star product in our food segment and continue to grow. We will continue to invest more on in these food products. We have also now launched a Fortune cake mix. Basically it’s more of a B2B kind of product where we would be supplying it to bakeries and even to the retail consumer as well.
On a soap again it’s a very encouraging story. The Soap grew by 19% year on year in FY25 now 130 crore brand for us. We recently acquired GD Foods. We achieved the closing of the transaction in the quarter one. We signed the agreement, definitive agreement in last quarter that is on 4th of March. G.D. wood, manufacturer of soya sauce, pickles, condiments, jams. It’s a very adjacent category for us. So one of the kitchen essential. Today in Indian Kitchen we have acquired this company with a intention to grow the business currently at 400 crore of top line with a gross margin, gross margin of plus of 50%.
This is one product line which will add into our food business which is high margin product and also one of the kitchen essential which we were looking at. This company was launched in 8440 years old company have been very strong in Northern India 7 states of North India and are currently number 3 player in these markets After Kisan and Maggie. We acquired this company at an enterprise value of 603 crore which is close to 1.5 times of their revenue and we are hopeful that basis our distribution strength we should be able to multiply the business model of this.
There are lot of low hanging fruits that are there besides being distribution sourcing capabilities. Also one thing where we will add in this company and will improve the sales as well as the margin structure of the company. On distribution front we are aggressively growing end of March 25th we are now 8.6 million retail outlets where we reach directly up by close to 20% from last year. Last year March 24th we were at 7.2 million outlets 7 20,000 outlets sorry to 860,000 outlets. Now on a rural side we have as we were saying in quite a few calls earlier that we would want to reach target 50,000 rural town by March 25 and we are happy to announce that we have been able to do that.
Now we reach more than 50,000 towns. These all distribution updates or a distribution improvement that we have been able to showcase should start reflecting in coming quarters and we should see the impact positive impact of all These developments in Q1 and Q2 alternate channel quick commerce is quite encouraging for us grown at 113%. We are investing in this channel more on a AI side just to understand the customer requirements and how can we ensure that we remain with 100% kind of fill rate. So we are doing a lot of intervention in this channel just to ensure that the growth which we have seen in this channel continues as we from here onwards.
Our Gohana Food complex which is one of the big capex that we spent out of IPO funding is now more or less ready. We are hopeful that we should be able to commission the entire food park sometime in August 25 so that for the next full half year, half year of FY26 we should be able to get the business coming up from this plant and should reflect in our top line as well as bottom line. Besides Goanna, we have been able to commission a lot of IPO projects which includes pulses, basin and wheat flour units across all the locations.
The Castor derivative plant is right now ongoing and should be completed by end of this financial year. We have been doing a lot of intervention for rural penetration by doing lot of digital activities, by doing lot of branding in terms of buzz branding, dhaba branding or a building branding so that activities continues and we are we will continue to do all these interventions to see that the brand goes to all the consumers quite aggressively. In the KUMB also we did lot of intervention by doing some promotional activity inside the Kumbh Mela. On ESG front I’ll not spend much time but it’s very important aspect for us.
We continue to do all the interventions required for ESG whether it is a resource. So with a tree plantation or solar implementation now we have close to 10 megawatt of solar capacity available which is around 10% of our total requirement. We continue to work in the areas of rainwater harvesting and zero liquid discharge plants at our various locations. On logistics front we continue to work on the multimodal concept where we are trying to dispatch more and more of our product through a rail which is a green energy. We have been recognized by a lot of appreciation from Indian Railways as well as inclusion of awl in FTIC 4 goods index series.
On CSR front we continue to work on the Fortune supposition. This is from my side as far as the presentation is concerned. Just to give you a quick update on Q4 and FY25 numbers and performance. Now I would request moderator to open the floor for question and answers and Mr. Malik and myself are here to address any questions.
Questions and Answers:
operator
Thank you very much sir. We will now begin with a question and answer session. Anyone who wishes to ask questions may press Star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press Star and one to ask questions. The first question is from the line of Abneesh Roy from Nuvama. Please go ahead.
Abneesh Roy
Yeah, thanks. I have two questions. My first question is on the recent edible oil industry demand that import duty on the refined palm oil has to be increased. What is your view on likelihood of this and how does this impact your overall margins? Because margins this quarter was disappointing. Do you see that this could impact margins in the if this happens?
Angshu Mallick
See on differential duty what we call it between crude palm oil and refined palm olein the differential duty is only 7.5% now it is cheaper to import olene and sell rather than to buy CPO process and sell. Now the industry has put in lot of capex and most of the players are running at around 40 45% capacity utilization. Now we have been requesting the government that make in India is Something that is being talked about but it needs differentiated duty of at least 15% and in that case only we can import more CPO and process and make olin in India.
Government has accepted it as a positive sign and I think things will happen sooner or later because government have understood that helping the Indonesian industry is of no use. And I hope it happens fast on margin front. Let me answer that. Possibly we had the best year in last 25 years in terms of EBITDA and margins in edible oil has been good and has been steady. We have delivered what has been said in the last 12 quarters. If you see quarter on quarter, if you see edible oil have done well except for last year when we had a different issue.
But otherwise margins are stable. Outlook is also stable and going forward I think edible oil will continue to deliver what it has been promising.
Abneesh Roy
Sir, one follow up on the margin. So it was a good year, but it was a good year. First nine months was good with almost 4% 4% plus margins in most of the quarters. But this quarter was there any inventory loss? Because quarter and quarter margin has become almost half EBITDA margin. And how do you see Q1 and Q2 any sense you’re you have on coming back to a decent margin of 4%?
Shrikant Kanhere
Yeah, so sorry say yeah, so amnesh, I’ll take this question. So I just want to clarify one thing that whether we agree, whether we like it or not like it, I think one thing we must accept that at the back of overall scheme of the things which we are working on, there is a commodity. Now commodity not necessarily will behave quarter on quarter because commodity cycle behaves in its own way so lot many times. What happens is that a cycle which you are running may some ends of the cycle may get completed in one quarter and the remaining ends may get completed in next quarter.
And therefore there is always a overlap between 1/4 and 2/4. And therefore when we try to look at numbers only for the quarter may not be right thing. And therefore I always say that look at the number at least for a half and if not a half at least for a full year because that’s where is a sizably reasonably good period where the cycle gets completed. You know when I say cycle gets completed because when you are operating in a commodity world you always try to operate in a hedge mechanism where one leg of hedge gets completed in one quarter, another hedge leg gets completed in another quarter.
And that’s where it’s better to look at half number one. Number two, let’s not look at Margin for us in terms of the percentage I think we should be looking at margin in terms of the per ton this year. We have been saying in our previous calls also that we had a favorable cycle, we had a favorable inventory gains also in this particular year which may not necessarily be in the next year. However, having said that as you asked, what is the outlook for the next full year? I think we should be able to deliver the the margin structure in per ton terms which we have been delivering earlier except for the last year.
I think last year we have to take out because it was an exceptional year. So just to spell out very clearly 3,500 to 3,600 rupees a ton of EBITDA for edible oil should be should be on an overall basis we should Be able to deliver.
Abneesh Roy
Be able to deliver the last quick follow up. Essentially if I see your broader numbers you’re taken around 37% price hike but I also see that your Q4 edible oil volumes are higher than Q3 but profits are lower. So have you gone for market share expansion and so that’s why you sacrificed on the margin side but you would have gained some volumes, is that correct?
Shrikant Kanhere
Yeah, there is some kind of aggression which we had to do that because as Mr. Malik said in earlier also that palm price has remained very high and this is also a very important segment for us. So some bit of aggression we had to do because we don’t want to lose too much of market share or too much of volume on the palm. That is also one reason but as I said earlier also the cycle completion not necessarily happening in this quarter. Maybe one of the reason why you are looking the margins little lower than otherwise.
Abneesh Roy
So any last thoughts on palm oil? What is your understanding of the outlook? Because conflicting news flow seems that crop seems okay but then the local government of Malaysia Indonesia might also be looking at mixing palm oil in the rest of the fuel needs. So any thoughts you see for how you see India prices in FY26? What will be your initial thoughts?
Angshu Mallick
See one thing is there abneish that it has come up from the top so that we can see and going forward, April, May, June the prices will soften little bit further but one doesn’t know about any policy that Indonesia Malaysia will bring on B40. Now these are some things where you know things always remain uncertain but going ahead we feel that palm oil will not be as pricely as it used to be in the past at least last six months and it’s going to be reasonable. So overall overall stability in prices seems to be There.
Abneesh Roy
So thanks. That was from my side. Thank you.
operator
Thank you. We’ll take the next question from the line of Anuj Podar from Futures first. Please go ahead.
Anuj Poddar
Hello. Hi sir. Thank you for giving me the opportunity. My question to you is, I mean I’m an investor in AWS since last three years and we have seen you know the underperformance since last three years and there’s no sign of improving. So my question to management is the management have any concern for the, you know, the shareholder then what steps you are taking for the prices to you know, settle down.
Shrikant Kanhere
So thanks Anuj for your question. I think see prices is something which is not in our hand. What we can do is just to improve the business and that I think we are doing it. I think the numbers of FY25 is there. So we have one of the best year since inception with a profit of 1200 crore of packed. Now price is a very dynamic which is something which is a market driven discovery on which unfortunately management doesn’t have any control. What we can do, we are doing it by ensuring that we keep on adding good businesses in the overall scheme of the things.
Like we did the GD Foods acquisition, we do Kohinoor acquisition and as we go forward we are quite optimistic that we should be able to repeat the similar performance as we go Forward in next FY26 and let the market then discover the price.
Anuj Poddar
Okay, thank you.
operator
Thank you. The next question is from the line of Sanjay Shah from KSA Securities Private Limited. Please go ahead.
Sanjay Shah
Yeah. Good morning gentlemen. Thanks for opportunity. So my question was as you well explained about our acquisition of Capex done at Ariana acquisition of GD Foods. So now taking forward from here, how much revenue do we expect from food and FMCG business in next two years and any color on margins, what all the investments are planned through the organic and inorganic. Any new investment plan for organic and inorganic growth from here on.
Shrikant Kanhere
Okay. So as far as the food and FMCG is concerned, as we have been saying earlier also that it is a focused area for us. This year we clogged a volume of 1.2 million tonnes out of total 6.5 million which is close to 18 19% of overall things. This basket is growing at decent growth with a 20% kind of growth which we have been able to clock year after year. And with a 6,000 crore plus of revenue this year I think we have taken internal target that by end of FY27, that is after two years we should be able to clock 10,000 crore of revenue for the food on margin fronts.
I think we have been saying this for quite some time that food will remain into an investment phase or a growth phase for next two years, two to three years, and will continue to operate at a EBITDA neutral. That’s where we will reach to a level where we have a decent market share and decent market penetration for all the products. And from where you should start looking at the margins, reflecting on the bottom line as far as organic and inorganic growth is concerned. Of course we will now, given the fact that now Gohana has been delivered to us from here, we should see our organic growth only.
But we are not worried to the fact that any M and A opportunity coming in our way, we will certainly explore and try to grab it because that helps you to have a quick growth on the basket so that we will continue to explore and take it forward.
Sanjay Shah
Great. Sir, any comment on promoter support? Now Vilmar is on the front foot and after rebranding, how do you see the global expansion, sourcing advantage and promoter support from here on?
Shrikant Kanhere
Yeah, so promoter support will always be there. In fact, Wilmar is quite bullish on India. And if you look at the business in which Wilmar today is, is more or less similar to what we are today in Awl agreement business in India. So we have all the support from Wilmar Singapore and we do expect that from here. Given the fact that Wilmar would be at a driving seat as far as the overall business operations are concerned. We do look at explore the opportunity of going even operations out of India. So that’s something which is at a very initial phase right now.
I can’t be able to comment anything on that. But yes, the promoter support will always be there. In fact it will be with more force now given the fact that Wilmar has got a more say in their operations in India now.
Sanjay Shah
So my last question was regarding Mr.
operator
Shah, I would request you to kindly rejoin that you follow questions please. Thank you. We’ll take the next question from the line of Harith Kapoor from Investech. Please go ahead.
Harit Kapoor
Yeah, hi, good morning. Just had a couple of questions. Firstly on market share. So you mentioned there was a little bit of a dip in palm oil and you mentioned it in the presentation as well. So just wanted to understand, you know, what’s happened there. Is it that regional players have gotten more, more competitive and what are some of things that we are doing to, you know, what are the actions that we’ve taken to, you know, mitigate this and when do we see an improvement as Far as shares are concerned. That’s my first question.
Angshu Mallick
Okay. As you are aware that the palm oil prices being high impact higher than sunflower oil consumption shifted from Olin to soybean in north and east and to Sunflower in west and south. We lost almost 1.3% market share in palm oil. We are number two player and obviously we have big share in Olin and that we dropped because the high prices. Obviously consumption dropped. We got incremental 10bps in soybean oil. Sunflower oil grew by 20 basis point and mustard oil grew by 30 basis point overall. Overall our market share dropped by 30 basis point only because of ole.
That is the story so far. Now going forward. Two, three things that we are doing. One, palm has now started coming back into the pricing game and it is today if you ask me, it is cheaper than soybean oil. Obviously cheaper than sunflower oil. So traction has started coming and summer generally palm oil is consumed more than winter. So we have started seeing the growth in palm oil consumption. So it is possible that we may recover our lost market share. One, two is that rural market still consumes lower quantity and we see great opportunity. We have a better reach.
So last year we increased our retail reach. This year also we will increase this 50,000 towns to possibly 60,000 towns. So that direct coverage gives us the advantage of being present in smaller towns. Third is that we have Franker brands, Kings and Aadhaar which we are going to promote aggressively. Already new advertising has been done and we are going to shoot them both in digital as well as in television. Some of the work has already started. We are sure we will catch the price conscious consumers there. So put together A, B and C. I see we will regain our market share.
Maybe we grow by 2030 basis point over last year. So we will surely regain the lost market share.
Harit Kapoor
Great job. Thanks for that. Mr. Malik, the second thing was on on the food and FMC side. So how do we look at the segment going into next year? So I know you have a target of 10,000 crores, less than 25% CAGR in revenue. But just into next year should we assume that first half growth should be a little lower given the high base? Given the fact that you had some export of additional exports of rice last year as well in the first half and a pickup in the second half of the year to get to that 2025% growth number.
Is that the way to think about the trajectory grow through the year?
Angshu Mallick
Okay, to start with, the biggest segment of brand in staples is wheat flour. Wheat flour actually was historically growing at 18 to 20% as per Nielsen we were also doing very well. It’s only last year when the wheat prices went up abnormally high. Consumers shifted to lose atta or buying wheat and making atta themselves. So so branded share came down and in fact negative minus 2% was the overall growth in terms of branded wheat. As Paneer said we did grow but not that much this year. I think the wheat prices are much lower already cheaper than last year.
So I think consumption story will be back number one. Number two rice prices are very low. It is possibly the lowest in the last three, four years Basmati rice and non basmati rice so we are seeing good traction and I am sure Basmati rice and non basmati both will grow this year. Basin prices are low and we have added two factories One in Ahmedabad Kadi which is a new plant come up in March that will add volume as well as our Gohana plant will also start making wheat flour Maida from August that will add volume.
So overall overall capacity increase will help us lower prices lower inflation will help us third overall government incentive in income tax relief and their investments in capex will add to the consumption. So I think overall food basket should do better.
Harit Kapoor
Got it. And last question is on the modern trade side. So you did mention some issues there. If you could just talk about what were the problems and what have you done to kind of solve it.
Angshu Mallick
You see modern trade between alternate channel, modern trade and E commerce. E commerce is going faster, there is no doubt about it. And almost 100% quarter on quarter growth. Annual growth will be more than 60% now modern trade is left with two big players reliance and Dmart and their rationalization of outlet or their reduction of inventory and all that has been slowing down the growth the way we were growing earlier. Private labels have also come in in these things. So these are some of the challenges. But strong brand obviously we have an edge over others but the growth wise E commerce is anytime growing much faster.
So these are the things in alternate channel.
Harit Kapoor
Got it. I’ll come back some more. Thank you.
operator
Thank you. We’ll take the next question from the line of Aditya P from JP Morgan. Please go ahead.
Aditya P
Hi, thanks for the opportunity. My first question is on the edible oil business. If you look at FY26 under the normalized operating scenario what is the kind of volume growth that you will be aspiring for? And as an extension to your point on palm oil prices are incorrected significantly over the last month. Will there be any transient impact on your margins as a result of this or are there any edging related impact that could come which we should be aware of?
Angshu Mallick
See on growth front edible oil consumption we are hopeful of anything between 7 to 8% growth although the country consumption is growing by only 3% but we expect to do better than average industry and we will continue to do 12 palm oil prices coming down will help us because we are a big player in palm oil possibly we are the largest importers of crude palm oil and refined palm oil and we have very good network of distribution of branded palm oil plus we have a lot of institutional sales where we score over others in terms of supply chain management.
So palm coming down will help us to improve our volumes, reduce our plant cost and improve efficiency overall. Overall it’s a benefit for aawl.
Aditya P
Thanks. My second question is on capex what will be the outplay that we can forecast maybe for the next couple of years.
Shrikant Kanhere
So on capex I think we have done the IPO capex just finished so we have enough capacities now available whether it is a food or oil we are already building one. We are already running one capex of 1000 crore which includes the Volio complex in Krishnapattanam down south and couple of small facilities for the castor. Besides that I don’t see a big capex as such coming up for next couple of years except for the fact that we may end up running some maintenance capex of close to 100100210050 crore plus any plant where we need to do a debottlenecking or anything.
So maybe for a purpose of taking any number I think for next couple of years I don’t think we would be spending more than 500600 crore of capex for a year.
Aditya P
Thanks. Just if I can squeeze in one more question can you just give us a bit more color on what will your margin profile look like across the different channels? Say quick commerce is modern trade and general trade. Will one of the channels be significantly more margin accretive versus the rest will be great if you can give us Some color.
Angshu Mallick
see margin wise. Normally modern trade and e commerce gives us little better margin than general trade but you also need to spend more in modern trade and e commerce to keep the products particularly some of the slow moving products or your focus products coming up the screen for buying purpose we have to promote more than competition. In basmati rice we have to promote more than competition so here you have to spend money to do that. So on one side there is improved margin because sales people cost reduces or something. But then you have to do more promotion within the channel to push your volumes overall.
Overall, volume wise, that is how we have to play.
Aditya P
Thank you. Thanks for the opportunity.
operator
Thank you. The next question is on the line of Kunal Shah from Jefferies. Please go ahead.
Kunal Shah
Hi. Thank you for the opportunity. My first question is regarding your guidance of this 35, 3600 EBITDA program. Just to confirm this is on an. Overall basis and does this include other. Income also or is it excluding.
Shrikant Kanhere
Sorry, your voice was breaking. Can you just come back to be the full question again?
operator
Mr. Shah, I would request you to use your handset please.
Kunal Shah
Hello. Is it now better?
operator
Yes sir.
Shrikant Kanhere
Yeah, yeah,
Kunal Shah
Yeah. So my question is regarding this EBITDA guidance of 35,3600 rupees per ton. Is this on an overall basis for the full business and does this include other income or is it excluding that fee?
Shrikant Kanhere
Yeah, yeah. This 3500. 600 which we are saying is for the full business which includes all edible oil, food and fmcg industry essential. And it does include the other income also because for us other income is also very much part of the business only because it’s not something which is. You can’t separate it with the, with, with the business. Otherwise.
Kunal Shah
Understood, Understood. So then in that case it’s fair to say that this year was a one off from a profitability standpoint for the full year as well, despite a lower 4Q and then yoy you will see some dip in profitability next year. That that would be fair understanding.
Shrikant Kanhere
Yeah, we are absolutely fair understanding. That is what we have been saying for the quarter 2, quarter 3 we did saw a favorable commodity cycle gain, one off kind of cycle gain which actually resulted into a better number for us in Q4. In Q3 particularly and to some extent Q1 and Q2 also. And therefore when you look at the next year the numbers would look not exactly the way we have been able to deliver this year would be little less than that. I mean to some extent this will get compensated by the kind of volume growth that we will be able to get next year, but not the full commodity cycle.
One of kind of gain which we have seen this year will be there next year.
Kunal Shah
Understood? Understood. And on the volume growth front, if I recollect, there was some unbranded sales bunched up, unbranded sales, even in edible oils in the first half of this year. So this 7, 8% volume growth guidance which you have just shared takes into account that. Right. And it’ll be on despite that. I mean on that base you should be able to grow 7, 8% this year. Is the thought process as on today?
Shrikant Kanhere
Yeah, yeah, absolutely. So when we say edible oil, it takes into account everything, all, everything which we have in edible oil, whether it is a institutional or whether it is a branded. So when we say we are targeting 7, 8% includes everything, all kind of sales.
Kunal Shah
Understood, Understood. My second bit was on this GD Foods acquisition. Any, any thought process on, you know, the right type of sales growth or you know, scale up that you’re looking at in this business, let’s say in the next one, two years and what, what are the kind of margins that you’re looking at? Any synergies that you can gain out of it if you can share some thoughts over there?
Shrikant Kanhere
Yeah, there are, there is quite a significant improvement that we should be able to do in this business. Typically there are low hanging fruits like you know, we, you can just leverage our distribution. We are very strong in north and this company is also more or less predominantly present in northern markets. So leveraging our distribution itself can you know, deliver into saving in the cost and improving the volumes of the business, number one. Number two, there is a lot of sourcing synergy that we can bring in because this company also company requires sugar, this company requires oil.
This company requires Atta and Meda and RFM which we already have. So we can leverage on that as well. Besides that there are a lot of channels where we will add in terms of distribution. This company is not very quite significantly active on E Com and modern format store where we are. So we can just bring in that also aspect into this business. So we have absolutely no doubt that why we should not be able to take this company higher than what is it today. And I mean we are hopeful that in next couple of years itself we can make the top line 2x of what it is today.
Kunal Shah
Understood, Understood, understood. And my last bit is on. Can you just let us know what’s the branded share of business for both foods and edible oil for the year and what should be the tax rate next year? Just these two.
Shrikant Kanhere
So branded share in food is quite high. So food is in fact more than 75% is branded because food is more of a consumer business. Edible oil, we do have a good chunk of institutional clients also. But in edible oil it’s close to plus of 60% is brand. In food it is more than 70, 75%. So when you look at overall scheme of the things, we have good 70% of business coming, coming from the brand.
Kunal Shah
Understood. And then the tax rate that we should build for the next year. Any changes that we should expect.
Shrikant Kanhere
Tax rate?
Kunal Shah
Yeah, tax. Tax rate. Today.
Shrikant Kanhere
Today the effective tax rate of company is 25.8%. I think you can continue to assume 25% tax rate effectively.
Kunal Shah
Understood? Understood. Yeah. That’s all from my set. Thank you.
operator
Thank you. The next question is from the line of Harith Kapoor from Investec. Please go ahead.
Harit Kapoor
Yes, just to follow up on this. You know on the OPEC side we’ve seen the sharp increase in people cost over the last two quarters or so. Just wanted to understand what’s driving it. Is it also the capex have you seen 2/4 of like pretty high people cost growth? So just some outlook on that employee cost?
Shrikant Kanhere
Yeah, absolutely. Fair, Fair observation Harith. On people cost there are two reasons. One reasons you already mentioned that quite a few new projects which have got delivered to us will require new man force manpower to you know run these plant. Number one. Number two, business as such is also growing. So therefore with the growth of the business you also have to add the manpower. So this is the one, the second aspect of course given the fact that we had a super relative year in terms of the performance of the business. So we do have provided some kind of additional incentive in the people cost in the quarter 4 number.
And that’s why the quarterfall number is looking little more than the last quarters. And also for the full year it is looking, the cost is looking more is a one time kind of number. Otherwise our people cost usually grow in the range of 10 to 11%.
Harit Kapoor
Great, thank you.
operator
Thank you. We’ll take the next question from the line of Karan Bhuvania from ICICI Securities. Please go ahead.
Karan Bhuwania
Just one question. If you look at the growth of FMCG, right. It has decelerated over last 34 quarters. Right. From growing somewhere around 20 25% we have come to like 9 to 10%. So can you just help us understand what are the different growth rates within the sub segments for example wheat rice that you’re admission within that. And, and given that we have a target of 10,000 crore revenue by FY27, how should we look at this trajectory going forward? Because we need to ask it for the kaggle would be somewhere around 20% to achieve that number.
Right. So and, and, and the last question on that would be you also mentioned some supply chain issues regarding impacting your growth. Right. So if you can explain what that issue was and what’s the current update on that.
Angshu Mallick
Thank you so. So let’s start with wheat pla. Wheat PLA business is almost a half a million ton business for and has been growing steadily for 25% over the last three, four years. This year it has slowed down for one big reason is that the wheat prices went up from almost 2627 rupees in April, May, June to 323334 rupees in Delhi and maybe 40 rupees in down south. Now what has happened is that the wheat price is going up so much impacted our branded consumption and the consumption story dropped drastically because one prices went up and consumption became more from loose than packed.
So we lost volume on that. Everybody in the industry lost volume on that. So one reason is that second is that when the commodity prices goes up players like us get impacted immediately. Because the local players can manage wheat. Even lesser quality wheat and Maida they can make and they manage the situation. We can’t because we have very strict quality control norms that we have to manage. Otherwise we can’t pack it in our brand. That is one. Now when it comes to supply chain we have said rice is our second business which is almost 400,000 tons per annum.
Here our Gohana plant was supposed to get operational by October when the Padi arrives. And we were almost getting ready. But what happened was that new norm of getting pollution control came up for units located in NCR and our Gohana unit is located in ncr. So one it has to work on biofuel. So that is not an issue. Issue was that the government said that as for the law, the unit can only start after the Central Pollution Control board gives us clearance certificate. Now earlier the clearance certificate was very simple to get but with some High court order I think they said there has to be a meeting, there has to be presentation.
And it took one and a half months and then it got extended. And then the provision came only end of December January. So our three months we lost on that processing of rice. When paddy is processed and the supply chain become little tight. Otherwise rice would have done even better than what it has done. These two are major players. Then came our pulses and all that. Where we don’t think we have lost on anything except that the growth subsided. Because Matar was imported a lot. And Matar as you know yellow peas was priced half of Chennai.
So people shifted to lower cost Matar Basin what they call and we have in Chennai basin. So obviously that sales impact. So all these things put together reduced our growth 10%. Otherwise 20, 22% growth has been a Steady performance coming forward. Going forward this quarter onwards wheat prices have come off. We have reduced the prices and markets are getting back into action. Rice is steady. Goana plant has started producing. So things are much better and normal. I think going forward we should continue to deliver 18, 20% growth in food.
Karan Bhuwania
Thank you sir. Best of luck.
operator
Thank you ladies and gentlemen. We’ll take the last question for today which is from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.
Shirish Pardeshi
Yeah. Thanks for the opportunity and good afternoon. I have three questions, Mr. Malik. Starting with Gohana plant which is operational and you say that about 95% it is operational. I was more curious in FY26 what kind of internal sourcing for rice and wheat milling will happen from this plant to our overall sales contribution.
Angshu Mallick
This plant can process roughly around 1 lakh 50,000 tons of paddy annually. And roughly around over 150,000 200,000 tons of rice. So that part is ready for use and going on mustard oil crushing is 600 tons per day. So that has also started. Only solvent extraction we are putting up this month. Possibly so solvent extraction will start and then there is a refinery attached to it and packing. All these things will get ready by maybe May end June early. Only project that will come by August is the wheat flour project which is a good big project and that we will get only six months.
That is around 15,000 tons per month capacity. So that we’ll get for six months. So 100,000 maybe maximum 100,000 tons we can process wheat all put together. This should be the Gohana’s contribution to this year.
Shirish Pardeshi
So how Gohana to the overall our sourcing capacity will add.
Angshu Mallick
That is what I said. Around 1 50,000 tons of paddy we can source and process 100,000 or little more. Rice we can process from the market. We can buy and process in the plant which is rice to rice units that we have. And wheat we have already started buying for Gohana. But we can use only from August onwards.
Shirish Pardeshi
Yeah. So can you spell out what is the wheat capacity? We are looking wheat milling.
Angshu Mallick
It is 15,000 tons per month. One like 80,000 tons on the lower side.
Shirish Pardeshi
Okay, got it. My second and last question on the GD Foods is this integration will take some time or you’re already done? Just tell us next 12 months plan because you have focused more on the integration and in terms of distribution and getting the leverage. But I’m more curious because this company also has some biscuits part and at this point of time biscuits also looks very very competitive. Though they have very good full scale of pantry items and other things. But then just I am more curious how next six months we should be monitoring the progress of GD Food acquisition.
Shrikant Kanhere
You rightly said, I think GD Foods, we have already started interventions in. In distribution and on the sourcing side. But as far as our understanding is concerned, this company is not into the biscuits. They do have a long tail of products in terms of cake mix, in terms of ready to cook, kind of ready to eat kind of products, but not exactly into the biscuit. And we, to be very frank with you, we have no intention to get into this field also. But on intervention side, yes, we are very aggressive. We have already started intervention.
In fact, it’s only only 20, 25 days since we actually achieved the closing. But our team is already there sitting in the GD Foods trying to work out different models on distribution, how we can leverage our C and F, how we can leverage our distributors. Because more or less the general trade segment is more or less similar to what we are today addressing. One is that. And second, of course sourcing. We have already started intervention because lot of their raw material which is there already there in our scheme of the things, whether sugar or oil or meta or anything or a besan.
So that has already started. We would be doing lot of other interventions also in terms of putting more money for the working capital, putting more money for the expansion wherever is required. So that will continue to do. And I think in every quarterly call we do certainly give update to investors that what we have done in this company and where we are today.
Shirish Pardeshi
Okay. All right. Thank you and all the best.
operator
Thank you. As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Thank you. And over to you, sir.
Shrikant Kanhere
Thank you everyone for attending our call to track our company and do attend our future calls also to understand the business. Thank you again and good luck. Thanks.
Angshu Mallick
Thank you so much to everyone.
operator
Thank you, members of the management, on behalf of ICICI Securities. That concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.