Adani Wilmar stock was trading in the green in a highly volatile market today. The stock saw strong buying sentiment amid a report on Association of Mutual Funds in India (AMFI) market cap categorisation of stocks by Edelweiss.
The report says the brokerage has listed LIC along with Adani Wilmar as the potential stocks to be assigned a large-cap tag. AMFI is likely to disclose the new categorisation in the first week of July.
Shares of Adani Wilmar rose 5 per cent to Rs 677.15 against the previous close of Rs 644.95 on BSE. The Adani Group stock has gained after three days of consecutive fall. It also touched an intraday low of Rs 632, falling 2.01 percent on BSE.
In a month, the stock has fallen 10.57 per cent. At 2:21 pm, the share was trading 1.77 per cent lower at Rs 684 on BSE. Market cap of the firm rose to Rs 88,007 crore.
A total of 1.03 lakh shares of the firm changed hands amounting to a turnover of Rs 6.90 crore on BSE. Adani Wilmar stock is trading higher than 20-day, 50-day, 100-day and 200-day moving averages but lower than 5-day moving averages.
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Another factor, which pushed the stock higher in a weak market today, was an analysis by Edelweiss which said Adani Wilmar may enter the Nifty Next 50 index. In the upcoming Nifty September Review, Edelweiss' Alternative & Quantitative Research preliminary analysis for Nifty indices said the newly listed LIC may also enter the Nifty Next 50 index.
The company made a muted market debut on February 8. Shares of Adani Wilmar listed at Rs 221, a 3.91 per cent discount to their 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.
In mid-May, ICICI Securities initiated coverage on the Adani Wilmar stock with a 'Hold' rating and a SoTP-based target price of Rs 550. The brokerage expects the edible oil business to witness a 10 per cent volume growth CAGR over FY22-24E (including the impact of the Bangladesh acquisition).
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"In FY23E, we expect volume growth of 11 per cent 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 9.0 per cent in the edible oil business," it said.
ICICI Securities said strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar)) in edible oil will provide Adani Wilmer with an edge over the competition.
On May 2, Adani Wilmar reported a 26 per cent fall in net profit at Rs 234.3 crore for the quarter ended March 31, 2022 against a net profit of Rs 315 crore in the year-ago period. However, revenue from operations climbed 40 per cent YoY to Rs 14,960.4 crore in Q4 against Rs 10,672 crore in the corresponding quarter of last fiscal.
Adani Wilmar Ltd is a joint venture between Adani Group and Wilmar Group of Singapore. It is engaged in the manufacturing of edible oil, wheat flour, rice, pulses, and sugar. The company also owns the popular brand Fortune, which is the largest selling edible oil brand in India.
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