Shares of Adani Wilmar were trading on a flat note since the consumer food company posted a healthy quarter in terms of strong volume growth for the period ending December 31, 2022. Adani Wilmar stock was trading at Rs 571.90 today against the previous close of Rs 580.40 on BSE. On a net basis, the stock was trading unchanged compared to the close of Rs 571.85 on January 10, 2022. Adani Wilmar stock climbed 4.22 per cent intraday to Rs 596 on January 11 but ended with partial losses.
The Adani Group firm announced its December quarter business update after market hours on January 10. In the current session, a total of 0.92 lakh shares of the firm changed hands amounting to a turnover of Rs 5.27 crore on BSE. Market cap of the firm rose to Rs 74,393 crore on BSE. The share hit a 52-week high of Rs 878.35 on April 28, 2022.
Considering the current market price, the stock has lost 32.14 per cent from the yearly high. However, Adani Wilmar stock stands 169.68 per cent higher than its market listing price. The stock made a muted market debut on February 8. Adani Wilmar stock listed at Rs 221, a 3.91 per cent discount to its 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.
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As per the regulatory filing, Adani Wilmar posted a high-single-digit growth in edible oil volumes, while the growth was in low-single digit in value terms in Q3FY23. Going ahead, the company plans to develop its operating model in HoReCa (Hotels, Restaurants, Caterers) segment to drive sales.
Abhijeet from Tips2trade said, “Adani Wilmar looks weak on the Daily charts and could test support of Rs 550 in the near term. Till a daily close above Rs 623 is achieved, investors are advised to wait for lower levels.”
Domestic brokerage and research firm Edelweiss has upgraded the Adani Group stock’s rating from ‘HOLD’ to ‘BUY/SN’ with a revised SoTP-based target price of Rs 708 apiece.
“FY23 was an abnormal year for oil players due to high volatility in oil prices, which affected AWL’s margins. That said, following a significant correction in palm oil from its peak, AWL’s margin profile would be better in FY24. Even so, keeping in mind rural slowdown and likely higher competition (entry of Reliance), we are cutting FY23/FY24E EPS by 23.1%/7.3%,” Edelweiss said in a note.
“We forecast Q3FY23 revenue would grow 7% YoY and EBITDA would dip 11% (Q2 revenue rose 4.4% YoY, but EBITDA fell 40% YoY) versus our initial expectation of 10% growth and a 7% dip, respectively. We expect edible oils to grow by 3%, Food/FMCG by 47% and industry essentials by 19% YoY,” the note added.
Nuvama Institutional Equities has given a buy call for the Adani Wilmar stock with a target of Rs 708. Nuvama said while Adani Wilmar competes in an extremely competitive business, it has consistently delivered strong volume growth across segments. Moreover, its commitment to expand the foods basket would help moderate its excessive dependence on the edible oil basket, it said.
Post the Q3 business update, Nuvama expects Q3FY23 revenue to grow 7 per cent YoY and Ebitda to dip 11 per cent (Q2 revenue rose 4.4 per cent YoY, but Ebitda fell 40 per cent YoY) versus its initial expectation of 10 per cent revenue growth and a 7 per cent dip in Ebitda, respectively.
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