Adani Wilmar Stock Tripled Since Listing: Should You Buy, Sell or Hold?

Adani Wilmar Share Price Nearly Triples Since Listing: Should You Buy, Sell or Hold?

Tue Jun 07 2022

Last updated:Wed Jun 22 2022

Adani Wilmar shares have tripled since its IPO in February, as edible oil prices jumped on the back of supply disruptions due to the Russia-Ukraine war, palm oil export ban by Indonesia and favorable sentiments for Adani Group shares.
The shares closed at Rs 680 on 6th June, up nearly 3x from IPO price of Rs 230 per share.
The rally in the share prices has made Adani Wilmar the best performing IPO for 2022 in all of Asia.

Adani Wilmar: Comparison With Top Performing Chinese IPOs in 2022

Adani Wilmar reported a profit of Rs 234.3 crore for the quarter ended March 2022 against a net profit of Rs 315 crore in the year-ago period, implying a drop of 26%. However, the profit rose 11% on a QoQ basis.
The company clocked a 40% YoY rise in its consolidated revenue from operations to Rs 14,960.4 crore in Q4 against Rs 10,672 crore in the same quarter last fiscal. The revenues were up 4% as compared to the previous quarter.
In its earnings update, Adani Wilmar said, "The Russia-Ukraine war has hit sunflower oil consumption which has fallen 50% as Ukraine is the largest supplier of sunflower to the world."

After a massive rally over the last few months. domestic brokerage Edelweiss Research said that the stock's bull-run may come to an end. It has a 'hold' rating with a target price of Rs 559 over the next 12 months.
Edelweiss Research said that while the company has strong growth visibility, the gains in the stock following listing suggest that it is already priced in.

ICICI Securities recently initiated its coverage on Adani Wilmar with a 'Hold' rating and a target price of Rs 550.
The brokerage firm expects the edible oil business to post a 10% volume growth CAGR over FY22-24E (including the impact of the Bangladesh acquisition). "In FY23E, we expect volume growth of 11% with some benefit of full-year consolidation of Bangladesh – we note Bangladesh operations are mainly in the edible oil segment. For FY24E, we expect volume growth of 9% in the edible oil business," it said.