Adani Wilmar shares: 64% upside likely, says Nuvama

Following more-than-doubling of Adani Wilmar's Q3 profit, Nuvama Institutional Equities retained its 'Buy' on the stock with a target price that suggested 64 per cent potential upside ahead. The domestic brokerage said Adani Wilmar Ltd reported its best-ever quarter in terms of revenue, Ebitda and PAT, which surged 31 per cent, 57 per cent and 105 per cent YoY, respectively. Strong performance was observed in Edible Oils and Foods & FMCG segments.

The edible oils segment's revenue and volumes increased 38 per cent and 4 per cent YoY, respectively. The segment recorded the highest quarterly profits.

"Foods and FMCG business revenue/volumes surged 22 per cent/23 per cent. The wheat flour business outpaced industry growth and gained market share. Revenue from alternate channels increased in double digits YoY with revenue over the past 12 months at Rs 3,300 crore. E-commerce (including quick commerce) sales volume continued to grow rapidly at 41 per cent YoY," it said.

In its conference call, the maker of Fortune oil said the foods business may remain in the growth stage until FY28 with expectations of 20–25 per cent gross margin after FY28. The company expects 8–9 per cent volume growth from the Edible Oil segment to consolidate its market share. It plans to expand its direct reach to 1mn outlets within two–three years.

Nuvama said Adani Wilmar plans to expand its direct reach to 10 lakh outlets within two–three years.

"The Gohana plant shall become operational from Q1FY26 funded via IPO. With Gohana operating, it shall have capacity of 6,25,000 tons per annum in which oil production shall be ~2,00,000 tons, leading to cost savings. The company continues to consolidate market share across most food categories," it said.

Adani Wilmar has the largest soya manufacturing capacity at 6,000 tons per month. Employee costs have sharply gone up mainly due to a one-time incentive programme, it said.

"Factoring in a strong Q3FY25 performance, we maintain ‘BUY’ with an SoTP-based target price of Rs 424 (earlier Rs 455)," it said.

The stock climbed 2.84 per cent to settle at Rs 259. Still, the scrip is down 21.20 per cent in 2025 so far. Adani Group recently raised Rs 4,850 crore from the sale of 13.5 per cent of its stake in Adani Wilmar as part of a strategy to exit non-core activities to focus on main infrastructure business.