Shares of Adani Wilmar, the star performer of 2022, have turned weak this year. The stock which closed at Rs 617.6 on December 30, 2022 fell to Rs 546.20 on January 23 2023, losing 11.56% during the period. However, Adani Wilmar stock became a multibagger last year after a muted market debut. The Adani Group stock made its market debut on February 8, 2022 at Rs 221 on BSE. By the end of last year, the stock had delivered 179.40% returns to investors.
Meanwhile, the stock is also trading 38% lower to its record high of Rs 878.35 on April 28, 2022 on BSE.
In the current trading session, Adani Wilmar stock rose 2.53% to Rs 560 on BSE. Total 1.76 lakh shares of the firm changed hands amounting to a turnover of Rs 9.88 crore on BSE. Market cap of the firm rose to Rs 72,788 crore.
In the previous session, Adani Wilmar stock ended 1.51% lower at Rs 546.20 on BSE. Total 1.29 lakh shares changed hands amounting to a turnover of Rs 7.13 crore on BSE. Market cap of the firm fell to Rs 70,998 crore.
In terms of technicals, the relative strength index (RSI) of Adani Wilmar stock stands at 36.8, signaling neither the stock is overbought nor oversold. The PE ratio of Adani Wilmar stands at 87.86 signaling the stock is overvalued compared to the industry. The PE of the industry stands at 66.65. Adani Wilmar shares are trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages
The Adani Group firm reported a 73 per cent fall in net profit for the quarter ended September 2022. Net profit slipped to Rs 49 crore against Rs 182 crore profit in the second quarter of the previous fiscal. However, revenue rose 5% to Rs 14,209 crore in Q2 against Rs 13,584 crore in the September quarter of the previous fiscal.
Here’s a look at what analysts and brokerages said on the prospects of the stock amid the ongoing correction and post December quarter earnings.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, “Recently, the stock has slipped below the crucial support zone of Rs 560 levels weakening the bias and is anticipated to witness some more slide with next major support near Rs 490-495 zone. For the bias to improve from current levels, it has to move past the Rs 590-595 zone decisively to establish some conviction for further continuation of the uptrend.
Currently, the overall bias is weak with further slide expected and next major support zone near Rs 490-495 levels. Of late the stock has witnessed diminished volume participation with gradual slide happening and for the bias to improve, one should wait for some positive movement with decent volume participation to be witnessed where one can establish some view to buy the stock.
The stock has slipped heavily and moved past below the significant 200DMA level of Rs 635 last month weakening the bias and trend. As per the daily chart, further slide is anticipated keeping the previous low of Rs 495 zone as the major support zone.”
Ganesh Dongre, Sr. Manager - Technical Research Analyst, Anand Rathi Shares and stock Brokers said, "On the daily chart, the stock is still under selling pressure. On the indicator front, the stock is also trading below 200DMA, which is a sign of weakness. So until we don't cross 200DMA which stands at Rs 640, we will avoid this stock as a fresh buy. Also on the weekly chart, the stock is still making lower highs and lower low formations indicating nervousness among the participants. So, we will avoid buying this stock at the current level."
Rajesh Palviya, VP - Technical and Derivative Research, Axis Securities said, “The stock has been consolidating on a monthly chart in the range of Rs 850-860 on the upside and Rs 530-550 on the downside. Any sustained move below the Rs 530 level will lead to a decisive fall, while on the other hand, it needs to cross Rs 650-670 levels for a significant upward move.
Currently, the stock is trading well below its 50, 100 & 200-day moving averages indicating overall limited upside. However, a sustained move below the Rs 530-525 mark on a closing basis will turn out to be daunting, testing lower levels.
As per the current trend, conservative-long term investors can opt for the wait-and-watch strategy and, after the breakout on the upside, may initiate a buy. Traders, who are not risk averse, can initiate a buy at the current market price with a stop loss of Rs 520 for a target of Rs 600-620.
On the daily chart, we noticed Adani Wilmar had formed a Bearish Engulfing Pattern indicating a downtrend for a short-to-immediate term. However, the impact of the same is more significant if it occurs after a significant up move in price accompanied by large candles, which are not cent percent accurate in the current case. So to make an inference from the pattern, we can say that a YES bearish pattern has formed but of a lesser magnitude. It will ultimately be the price action that is likely to dominate the trend.”
Ashish Manoj Katwa, Technical Research Analyst, Bonanza Portfolio said, “On the weekly scale, AWL has been trading continuously in the bearish channel since the April 25, 2022. In addition, the price has settled below the 20, 50 & 100 Exponential Moving averages which would be short-term concerning. However, the stock is taking support near the 50% retracement level, if it breaks this level, the stock may move toward the 490 to 485 zone.
AWL has given handsome return to the investor after the listing of the IPO. Now, the stock is trading in a broad consolidation range with pessimistic buyers, indicating a short-term correction in the stock. Investors opt to buy in decline cautiously as stock may slowly rebound from the current level, in the coming days. It would be a better opportunity for long-term investors to accumulate the stocks in the Rs 490 to 485 zone. An Important level to watch on the upside is Rs 670.
On the weekly chart, the price has been falling continuously in a bearish channel with Lower Highs & Lower Lows formation from the last couple of weeks. The price has respected the channel's upper and lower trend line every time it has touched. At the same time, on a daily chart, the stock has given a breakdown of the consolidation pattern indicating a bearish trend may continue in the near term. The technical indicator Ichimoku cloud suggests that the price is trading below the cloud which now acts as an immediate Resistance for the stocks. RSI on the weekly and daily timeframe is below 50 marks reflecting the bearish pressure in the price.”
Abhijeet from Tips2trade said, "Slowing urban consumption resulting in expected drop in margins is leading to a fall in consumer stocks including Adani Wilmar. Currently 566 becomes a strong gap down resistance and a fall till support of 550.8-524 looks a possibility. Investors should buy only if Daily close is above 566 for targets of 623-637 in the near term."
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