Shares of Adani Wilmar have slipped over 22 per cent from their record high in the last four sessions, signaling an end to the rally which some analysts predicted could push the stock to Rs 1,000 level. The large cap stock, which hit a high of Rs 878.35 on April 28, has fallen to Rs 680.20 today, declining 22.5 per cent during the period.
Analysts have attributed the crash in stock to profit-booking ahead of and post the Q4 earnings. On May 2, the Adani Group stock slipped 4 per cent intra-day to Rs 749 ahead of Q4 earnings.
Post the pre-earnings correction, AR Ramachandran, co-founder & trainer, Tips2Trades said that a decent price correction was expected after a stellar rally of three months.
Brokerages had also forecasted a correction in the stock post a stellar market listing rally. In late April, domestic brokerage Edelweiss Research said that the stock's bull-run may come to an end. It had initiated coverage on the stock with 'hold' and a target price of Rs 559 over the next 12 months.
Edelweiss Research said that while the company has strong growth visibility, the gains in the stock following listing suggest that it is already priced in.
In March, global brokerage JP Morgan said that the stock was perfectly priced now. The brokerage has a 'neutral' rating with a base case March 2023 target price of Rs 367 on the stock.
Adani Wilmar reported a 25.6 per cent year-on-year decline in its consolidated net profit for the quarter ended March 2022 on May 2. The Russia-Ukraine war has hit sunflower oil consumption which has fallen 50 per cent as Ukraine is the largest supplier of sunflower to the world, said Adani Wilmar in its earnings update.
The stock of the edible oil firm slipped 5 per cent to Rs 716 on May 4 against the previous close of Rs 753.65 on BSE. In the current trading session, the stock hit lower circuit of 5 percent and fell to Rs 680.20 on BSE. It opened with a loss of 4.67 per cent at Rs 682.55 today. However, it is still up 207.78 per cent from its listing price of Rs 221.
Market cap of the firm fell to Rs 88,404 crore. Total 2.87 lakh shares of the firm changed hands amounting to a turnover of Rs 19.52 crore in the afternoon session.
In a month, the stock has gained 17.24 per cent. The share trades higher than 20-day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
The stock had zoomed 297.44 per cent to Rs 878.35 on April 28 over its listing price of Rs 221 on February 8 this year.
Shares of Adani Wilmar made their market debut at Rs 221, a 3.91 per cent discount to their IPO issue price on BSE. The issue price of the IPO stood at Rs 230. The firm offered its shares in a price band of Rs 218-Rs 230.
Adani Wilmar is a joint venture between Adani Group and Wilmar Group of Singapore. It is engaged in the manufacturing of edible oil, wheat flour, rice, pulses and sugar. The company also owns the popular brand Fortune, which is the largest selling edible oil brand in India.
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