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Adani Wilmar Share Gives 180% Returns Since Listing; Should you Book Profit Now or Hold?

Adani Wilmar Shares: The shares of Adani Wilmar hit an upper circuit of 5 per cent today. This stock reached Rs 637 today, which was at Rs 606 on May 17. Although it is still trading at a discount of 28 per cent from the record high price of Rs 878. After retracing from lifetime high of Rs 878 apiece on NSE, these successive upper circuits are expected to provide relief to Adani Wilmar shareholders. Adani Wilmar shares are one of the multi-bagger stocks in 2022 as it has delivered nearly 180 per cent return in YTD time.

Adani Wilmar’s shares were listed on the stock market on February 8 this year. The company had fixed the stock price for the IPO at Rs 230, while it is listed on the BSE at Rs 221 and on NSE it got listed at Rs 227. But later it accelerated. On April 28, 2022, this share reached a price of Rs 878, which is a record high for the stock. Talking about the record high, investors have achieved returns up to 282 per cent in this.

According to ICICI Securities, Adani Wilmar shareholders are advised to hold the stock further as the company is a strong market leader in branded edible oil and industry essentials.

Highlighting the reason for giving ‘hold’ rating to Adani Wilmar shares, ICICI Securities says, “Adani Wilmar (AWL) is a strong market leader (50:50 JV between Adani Group and Wilmar) in branded edible oil and industry essentials with aspirations to further scale-up packaged foods. Strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar)) in edible oil provide AWL with an edge over competition.”

ICICI Securities further added that AWL enjoys multiple synergies across all three business segments which augur well for scale-up of packaged foods business – a) scale in procurement & logistics, b) brand recall of ‘Fortune’, and c) readily available distribution and mix-load supply chain benefit from edible oil.

On its suggestion regarding Adani Wilmar’s share price outlook, ICICI Securities said, “We model revenue / EBITDA / PAT CAGR of 9 per cent/24 per cent/35 per cent over FY22-24E. We initiate coverage on the stock with a HOLD rating.” The ICICI Securities report said that one should continue to hold the stock till it is above Rs 550 levels.

The major reason behind the rally in stock has been the ongoing war between Russia and Ukraine. This pushed up commodity prices across the world. Ukraine is the largest exporter of oilseeds such as sunflower. At the same time, soybean is also cultivated well in that region. On the other hand, the Indonesian palm oil export ban and the tax on Malaysian exports added to the challenges of oil supply. Due to this, the prices of edible oil in India skyrocketed. Adani Wilmar has benefited from this.

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