Adani Wilmar stock hits lower circuit for fifth day: Is it a good time to buy?

Shares of Adani Wilmar hit a lower circuit of 5 per cent for the fifth straight session today as investors continued to book profit from a record high in late April. The stock hit a lower circuit of 5 per cent in early trade today. It opened 5 per cent lower at Rs 583.25 on BSE. The market cap of the firm fell to Rs 75,803 crore. Total 0.17 lakh shares of the firm changed hands amounting to a turnover of Rs 3.05 crore on BSE. The stock has gained 6.07 per cent in a month but lost 22.61 per cent in a week.

The large-cap stock trades higher than 50-day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages. Adani Wilmar stock has lost 30.61 per cent in the last eight sessions. It is down Rs 295 or 33.59 per cent from its all-time high hit on April 28, 2022.

As profit booking has dragged the stock from record high, here's a look at what analysts and brokerages expect from the share in the near term.

Brokerage KRChoksey has initiated coverage on Adani Wilmar and sees over 20 per cent upside from the current level. The brokerage firm said that the company's raw material sourcing capabilities are supported by extensive business networks.

It imports 70 per cent of its raw materials, and its market leadership has facilitated to source raw materials from top global suppliers from the international markets.

Also read: Adani Wilmar stock in a free fall, slips 30% from record high

Also, Wilmar International is the largest palm oil supplier in the world and provides it with an additional competitive edge as it need not depend on third-party suppliers for sourcing palm oil.

"We believe AWL's focus on the growth of FMCG and Packaged food business and shift to value-added products will result in increased market share and expansion of margins," KRChoksey said.

ALSO READ: Adani Wilmar acquires Basmati rice brand Kohinoor

"Currently, revenue contribution from value-added products is negligible but the management expects it to be meaningful in the medium term, it added.

"Further, the company paid off its long-term debt from IPO proceeds. AWL has been able to generate strong cash flow which along with a reduction in debt will further, strengthen its balance sheet," the brokerage firm added.

On April 26, Prashanth Tapse, Research Analyst and VP Research at Mehta Equities advised investors to book 30% to 40% of the holding around Rs 840-850 levels. "If anyone wishes to buy fresh at current levels, better to wait for buy on dip opportunity to accumulate in the long term."

The stock was trading near Rs 765 level at that time.

Adani Wilmar Q4 results: Net profit falls 26% YoY to Rs 234 cr, revenue jumps 40%

AR Ramachandran, Co-founder & Trainer, Tips2Trades had said that the stock was overbought at that time and advised investors to keep booking profit till Rs 812. "Fresh buying can be initiated only near Rs 520-Rs 545 levels," said AR Ramachandran.

On May 2, Adani Wilmar clocked 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.

ALSO READ: Adani Wilmar beats HUL to become the largest FMCG company in India

However, the company reported a 40 per cent YoY rise in its consolidated revenue from operations to Rs 14,960.4 crore in Q4 against Rs 10,672 crore in the corresponding quarter of last fiscal.In its earnings update, Adani Wilmar said, "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."

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.