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Adani Wilmar stock falls 26% from record high: Time to buy, sell or hold?

Adani Wilmar stock falls 26% from record high: Time to buy, sell or hold?

Shares of Adani Wilmar gained up to 4.59 per cent to Rs 649.45 in early trade against the previous close of Rs 620.90.

Adani Wilmar stock has lost 26 per cent compared to the record high of Rs 878.35 on April 28, 2022. Adani Wilmar stock has lost 26 per cent compared to the record high of Rs 878.35 on April 28, 2022.

Shares of Adani Wilmar were trading higher for the second consecutive session today amid a weak broader market. The Adani Group stock, which has majorly traded above Rs 600 level since mid-May, gained up to 4.59 per cent to Rs 649.45 in early trade today.

Shares of Adani Wilmar closed 4.93 per cent higher at Rs 620.90 in the previous session on BSE. The stock, which ended at Rs 591.75 on June 13, has climbed 9.75 per cent or Rs 57.7 in the next two sessions. However, the large cap stock has lost 26 per cent compared to the record high of Rs 878.35 on April 28, 2022.

Adani Wilmar trades higher than 100-day and 200-day moving averages but lower than 5-day, 20-day and 50-day moving averages. In a month, the stock has gained 8.71 per cent.

A total of 0.41 lakh shares of the firm changed hands amounting to a turnover of Rs 2.62 crore on BSE. Market cap of the firm rose to Rs 84,366 crore on BSE.

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With two days of gain amid a falling market, here's a look what experts said on the outlook for the stock.

Manoj Dalmia, Founder and Director, Proficient Equities:

"Shares of Adani Wilmar hit the upper circuit of 5 per cent in a volatile trading session on Tuesday, but investors should not get trapped into these small blips as this won't sustain long. Investors can wait for key support areas for buying opportunities and avoid falling in traps. The outlook is bright in the long term due to its robust value chains, the edible oil business is set to grow at a rate of 10 per cent in the next two years. Also, it is entering into multiple verticals like of basmati rice recently under the brand name Fortune. In the short term, the main challenge will be increased cost pressure and inflationary concern. Investors can accumulate this stock on Rs 543 level."

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Ravi Singh, Vice President and Head of Research, Share India:

"Adani Wilmar stock has sustained well above the strong support of Rs 580 levels and bounced back strongly. The global equity market may be facing heat of Ukraine-Russia war but the rising commodity prices especially palm oil price is giving margin benefit to AWL unsold inventory and will further strengthen the company's balance sheet. The stock will resist the overall weakness in the market and move towards the target of Rs 700-Rs 740 levels in near term."

Currently, Adani Wilmar stock is trading 193.86 per cent higher to its IPO listing price this year.

The company made a muted market debut on February 8. Shares of Adani Wilmar listed 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.

In mid-May, ICICI Securities initiated coverage on the Adani Wilmar stock with a 'Hold' rating and a SoTP-based target price of Rs 550. The brokerage expects the edible oil business to witness a 10 per cent volume growth CAGR over FY22-24E (including the impact of the Bangladesh acquisition).

"In FY23E, we expect volume growth of 11 per cent with some benefit of full-year consolidation of Bangladesh - we note Bangladesh operations are mainly in the edible oil segment. For FY24E, we expect volume growth of 9.0 per cent in the edible oil business," it said.

ICICI Securities said strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar) in edible oil will provide Adani Wilmar an edge over the competition.

On May 2, Adani Wilmar reported a 26 per cent fall in net profit at Rs 234.3 crore for the quarter ended March 31, 2022 against a net profit of Rs 315 crore in the year-ago period. However, revenue from operations climbed 40 per cent YoY to Rs 14,960.4 crore in Q4 against Rs 10,672 crore in the corresponding quarter of last fiscal.

Adani Wilmar Ltd 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.

Also read: Adani Wilmar stock down 25% from record high, will it slip below Rs 600?