Adani Wilmar shares: Down 21% from 52-week high, should you buy this Adani group stock?

Adani Wilmar Ltd, whose shares are in the bear grip, reported a 13 per cent YoY growth in volumes in the June quarter. Edible oil segment grew 13 per cent in volumes and 10 per cent YoY in value, the Adani group firm said in a stock exchange filing. Food & FMCG segment grew 46 per cent in value and 45 per cent in value while industry essentials segment de-grew 8 per cent in volumes but saw flattish growth in value terms.

Following the June quarter update, Nuvama Institutional Equities expects Q1 revenue and Ebitda for Adani Wilmar to grow at 12.5 per cent and 196 per cent, respectively, in line with its initial expectations. The stock is down 21.21 pre cent from its 52-week high of Rs 422.55 hit on July 26, 2023. The scrip is down 10 per cent in the past six months.

"Overall gross/Ebitda margin may expand 375 bps/ 165 bps YoY to 12.9 per cent/2.7 per cent. Standalone Q1 volumes are likely to rise 13 per cent YoY. By value, we anticipate edible oils to grow 10 per cent YoY, whereas the Food & FMCG business turned in a strong quarter with 45 per cent value growth. Industry essentials witnessed a muted quarter, posting flat value growth (due to negative pricing)," Nuvama said.

Adani Wilmar said its alternate channels witnessed 19 per cent volume growth in Q1 and is actively pursuing substantial opportunities by executing strong sales and distribution strategies in GT. Nuvama expects brands such as Fortune and Kohinoor should do well, as it retained its ‘BUY’ rating on Adani Wilmar with a target price of Rs 455. 

For the quarter, Sunflower oil continued to gain market share in South India on the back of regional interventions. AWL launched 'Fortune Pehli Dhaar First Pressed Mustard Oil' to expand its range of premium products and also engaged with health-conscious consumers through digital platforms for its Fortune Xpert oil.

In the Foods & FMCG segment, the growth was additionally supported by sales of non-basmati rice to government appointed agencies for exports. In the wheat business, despite a slowdown in the packaged atta industry, Adani Wilmar maintained growth trajectory, aided by expanded presence in retail outlets, along with increased repeat purchases and notable gains in the South market.

Alternate channels such as e-com and quick commerce delivered 19 per cent YoY volume growth while branded exports jumped 36 per cent YoY in the quarter gone by, Adani Wilmar said.