Shares of Adani Wilmar slumped on Friday, extending their fall for the eighth straight session. The stock dived 9.95 per cent to hit an intraday low of Rs 497.55 over its previous close of Rs 552.50, mirroring steep losses in the domestic equity benchmarks today. It eventually settled 9.56 per cent lower at Rs 499.70. Support for the stock is seen at Rs 482.
At today’s closing level of Rs 499.70, the scrip tanked 23.38 per cent against a close of Rs 652.20 on December 13. Adani Wilmar has lost 43.11 per cent compared to its April high of Rs 878.35. That said, the stock has ascended by 126.11 per cent from its one-year low level of Rs 221, hit in February this year.
Analysts largely viewed the counter as ‘oversold’. One analyst felt the stock looked ‘weak’ while another suggested a target till Rs 1,000 levels in the long-term.
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The stock traded close to oversold zone, with a 14-day relative strength index (RSI) value of 32.10. A level below 30 is defined as oversold while a value above 70 is considered overbought. The firm’s stock has a price-to-equity (P/E) ratio of 103.14. This signals that the stock is overvalued.
A R Ramachandran from Tips2trades, said, “Adani Wilmar stock price is extremely oversold on the daily charts with next support at Rs 482. Long-term investors should wait for a green candle on daily charts to buy for targets of Rs 585-616 in the near term. Rs 950-1,000 could be a long-term target on a close above Rs 779.”
Manoj Dalmia, Founder & Director, Proficient Equities, said, “The company’s margins were hurt by a number of challenges, such as the significant volatility of edible oil prices, the allocation of a reduced TRQ (Tariff Rate Quota), and inflation. The stock looks weak currently but investors can accumulate at Rs 550 and expect some consolidation at that level.”
Vinit Bolinjkar, Head of Research at Ventura Securities, remained positive on the counter, “given the fact that the food category is a large space that is significantly underpenetrated.” Adani Wilmar is scouting for acquisitions that will help it to grow faster than the industry pace, he added.
“Whenever the market would correct, Adani shares are among the best ones to reciprocate, given the high-beta nature of the group’s stocks,” an industry source said, requesting anonymity.
A total of 5.55 lakh shares changed hands today. The turnover on the counter stood at Rs 28.82 crore on BSE. The company commanded a market capitalisation of Rs 64,944.94 crore.
On BSE, there were 22,965 sell orders against 2,146 buy orders. On NSE, 75.27 lakh shares changed hands with a turnover of Rs 389.45 crore.
All seven listed Adani Group entities settled lower today. In addition to Adani Wilmar’s decline, shares of Adani Transmission, Adani Power, Adani Ports, Adani Total Gas, Adani Green and Adani Enterprises also dropped as much as 9.71 per cent.
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Meanwhile, Indian equity benchmarks fell for the fourth straight session, dragged by state-owned lenders, metals and energy stocks.