Shares of Adani Wilmar have attracted huge investor interest since their market debut in February this year. The stock of the edible oil manufacturer closed at Rs 840.50 on April 27 against the listing price of Rs 221 on February 8, delivering 280.31 per cent returns to investors. The firm achieved another feat in the stock market on April 26 this year when its market capitalisation crossed Rs 1 lakh crore for the first time ever. It became the seventh listed firm of the Adani Group to achieve the milestone in the equity market.
Currently, the firm's market cap stands at Rs 1.09 lakh crore on BSE. The stock closed 4.70 per cent higher at Rs 840.50 on Wednesday against the previous close of Rs 802.80.
ALSO READ: Stocks in news: RIL, Infosys, Bajaj Auto, Adani Enterprises and more
During the session, the stock hit its all-time high of Rs 842.90. Volume of the stock traded on BSE was high with 26.11 lakh shares changing hands amounting to a turnover of Rs Rs 217.09 crore.
However, the stock closed 5 percent lower at Rs 75.15 on April 28 against the previous close of Rs 840.50 on BSE.
On NSE, 3.78 crore shares changed hands amounting to a turnover of Rs 3147 crore. The stock closed 5 per cent higher at Rs 843.30 against the previous close of Rs 841. Market cap of the firm rose to Rs 1.09 lakh crore on NSE.
On NSE too, the stock ended 5 percent lower at Rs 798.95 on Thursday.
ALSO READ: Adani Enterprises ventures into media with AMG Media Network
Analysts are bullish on the Adani Wilmar counter after the meteoric rise in nearly three months. Despite the 280 per cent rally, some of them still see the stock hitting Rs 1,000 in the near term.
Here's a look at three factors which have driven the stock higher since its muted market debut on February 8.
Export ban on palm oil
With Indonesia announcing a ban on export of palm oil to control local prices, edible oil players in India are enjoying high pricing power amid the shortage of the commodity. Adani Wilmar, which is one of the largest edible oil players, is one of the beneficiary of the shortage of palm oil. India sources nearly half of its annual palm oil needs from Indonesia.
Also read: Edible oil stocks rise up to 10% after Indonesia bans export of palm oil
Russia-Ukraine war
The geo-political tensions arising from the ongoing Russia-Ukraine war have pushed prices of commodities higher, especially prices of edible oils. The war has disrupted the entire supply chain from Ukraine, which is one of the biggest exporters of soybean seed and oil. This supply-side disruption will benefit Adani Wilmar whose unsold inventory is likely to command higher prices in the market. The sale of edible oil will in turn boost margins and make the stock look more attractive to investors.
Also read: Adani Power stock zooms 90% in a month; what's fuelling the rally?
Strong business strategy
The key strengths of the Adani Group company include a strong distribution network which will benefit the firm in selling its inventory in a market hit by supply shortage. The company is also planning to improve its overall distribution over the next 3-4 years.
It also has a strong brand and market leadership, integrated manufacturing facility that helps drive cost efficiencies across its different business lines. "The above factors will enable Adani Wilmar report volume and earnings compounded annual growth rate (CAGR) of 9.3 per cent and 19.9 per cent, respectively, over FY21-24E," said Edelweiss in a report.