Adani Wilmar stock down 25% from record high, will it slip below Rs 600?

Shares of Adani Wilmar were trading 25 per cent lower compared to the record high in the afternoon session today. The share hit a high of Rs 878.35 on April 28, 2022. Considering the current market price, the stock has lost over 25 per cent till date. Adani Wilmar stock fell 1.12 per cent to Rs 655 on BSE today. The stock of the Adani Group firm has been losing for the last two sessions.

In a month, the stock has gained 1.05 per cent. At 12:53 pm, the share was trading 1.12 per cent lower at Rs 655 on BSE. Market cap of the firm fell to Rs 88,031 crore.

A total of 0.59 lakh shares of the firm changed hands amounting to a turnover of Rs 3.88 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.

However, the stock is still trading 196 per cent higher than the IPO listing price, delivering handsome gains for investors, who have been holding it since allotment.

Here's a look at what analysts said on the direction Adani Wilmar stock is likely to take in the near term.

Manoj Dalmia, founder and director, Proficient Equities Private limited said, "Adani Wilmar has moved nearly 200 per cent from its opening price of Rs 227, currently at Rs 656. Moving forward, we might expect some rate hikes by RBI due to inflation remaining above the band of 6 per cent, the recent increase in the price of commodities, supply chain issues and the lingering Russia-Ukraine war might have some negative sentiments on markets as a whole. Recently, there has been a lot of profit booking due to increased valuation in a lot of sectors , plus the inflation might add to cost pressures reducing margins for the firm, which might pull down the stock. We expect the stock to reach Rs 552 which is a support if closing takes place below Rs 629 as per the chart setup. Investors can avoid buying heavily currently and instead accumulate on dips."

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Pavitraa Shetty, co-founder and Trainer, Tips2Trades said, "Adani Wilmar is one of the few stocks which is holding fort despite a strong rally in crude oil prices due to strong pricing power of the company. Technically,  Rs 630 remains strong support for the stock for long-term investors. Strong rally till Rs 980 can be expected only if daily close is above Rs 770."

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).

"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.

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ICICI Securities said strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar)) in edible oil will provide Adani Wilmar an edge over the competition.