Adani Wilmar reaches a new level of life; Enlarge stock 30% in one week

Shares of Adani Wilmar (AWL) hit a new lifetime high at Rs 543.35 as they closed at 5 per cent in the upper circle for the second day in a row in BSE on Friday. As of 10:08 AM, 13.32 million shares of the consolidated stock were traded and there are pending buy orders for about 7,000 shares on the New York Stock Exchange and the Bahrain Stock Exchange.

Last week, edible oil company Adani Group’s stock was up 30 percent, compared to a 2.3 percent rise in S&P BSE Sensex. It has increased by 136 per cent over the issue price of Rs 230 per share. AWL raised Rs 3,600 crore through initial public offering (IPO) and debuted on stock exchanges on February 8, 2022.

AWL has a leading position in the market across kitchen essentials: branded edible oil, wheat flour, rice, etc., with a large household reach. Its growth strategy is to increase market share in existing categories, diversify into more FMCG segments, pursue strategic acquisitions (product expansion/geographic reach) and improve profit margin/return in the medium term.

In its quarterly results after being listed on the stock exchanges, AWL recorded a 66 per cent q-o-q growth in its consolidated net profit of Rs 211 crore for the third quarter ended December 31, 2021 (Q3 FY22). The company’s consolidated revenue grew by 41% on a quarterly basis to Rs.14,379 crore.

During the quarter, AWL generated total sales volumes of 1.26 million metric tons, of which foodstuffs as well as Fast Moving Consumer Goods (FMCG) generated volumes of 0.17 million metric tons, even as the company added five new Fortune Mart stores. As part of its growing foothold across Southeast Asia, AWL has acquired Bangladesh Edible Oil Limited (BEOL), by acquiring a 100 per cent stake in Adani Wilmar Pte Ltd (AWPTE), a BEOL holding company.

“As the largest edible oil manufacturer (about 19 percent) with access to Wilmar’s global linkages (holding a 44 percent stake), AWL has significant sourcing (strong relationships with major suppliers and units closer to ports), supply chain and expanding benefits. compared to its domestic peers to ensure an efficient cost structure is important for low-margin business,” said analysts at JPMorgan.

AWL is also leveraging existing manufacturing, supply chain, logistics and distribution infrastructure to scale new food journeys faster. The brokerage firm said in a recent report rated the stock “neutral”.

Meanwhile, Russia and Ukraine together provide about 90 percent of the world’s sunflower oil which makes up about 10-12 percent of India’s edible oil consumption basket.

“With this supply off, consumers are expected to shift their consumption to alternatives such as soybean, peanut and mustard oil, albeit at higher prices given the 15-30 percent inflation seen in alternative oil prices after the war began,” said YES Securities in Company update.

brokergae said AWL should not be affected by the shortage given its product diversity and premium brand positioning. The company has already bought enough inventory to mitigate supply chain disruptions in the near term and is expecting share gains as small businesses may struggle due to supply chain and liquidity challenges.

“Management emphasized that as its portfolio spans across oil categories and has managed to outpace inflation, it should be able to post 6-8 percent volume growth versus the industry average of 2 percent in edible oils, with 30 percent growth expected. in food trade and 8-10 percent growth in the industry fundamentals business with stable profitability across all business segments,” the brokerage added.

Technical Show

Adani Willmar

prospects: cautiously optimistic

Adani Wilmar’s inventory is exploring uncharted territory. With the new age rising today, the stock has broken above the upper end of the Bollinger Band on the daily charts, rising above the resistance level at Rs 531. Immediate support remains at Rs 451.

Besides, although the recent sharp rally pushed the stock into the overbought territory on the daily charts on March 23rd, it has maintained its uptrend and is up 30 percent since then. This indicates that the bulls have good control over the stock.

Other momentum indicators such as the trend indicator and MACD are also showing a positive trend in the stock. However, the slow stochastic is pointing to a break in the upside in the near term.

(with input from Nikita Fashcht)

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