Adani Wilmar stock in a free fall, slips 30% from record high

Shares of Adani Wilmar have lost 30 percent from their record highs, delivering losses to investors entering the stock in the last seven sessions. The stock hit a lower circuit of 5 per cent in afternoon trade today. It opened 5 per cent lower at Rs 613.90 on BSE.  Market cap of the firm fell to Rs 79,787 crore. Total of 1.09 lakh shares of the firm changed hands amounting to a turnover of Rs 6.69 crore in the afternoon session.

The stock has gained 11.65 per cent in a month but lost 18.54 percent in a week. The large-cap stock trades higher than 50-day, 100-day, and 200-day moving averages but lower than 5-day and 20-day moving averages

The multi-bagger stock, which has been witnessing profit-booking since April end, is moving toward the Rs 600 level, which analysts had predicted after the Adani Group firm reported its Q4 and fiscal earnings.

AR Ramachandran, Co-founder & Trainer, Tips2Trades on May 4 said, "The stock looks weak and should test Rs 610-Rs 625 in the coming days with a strong resistance at Rs 750."

On May 2, Adani Wilmar clocked 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.

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However, the company reported a 40 per cent 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.

In its earnings update, Adani Wilmar said, "The Russia-Ukraine war has hit sunflower oil consumption which has fallen 50 per cent as Ukraine is the largest supplier of sunflower to the world."

Before the earnings, analysts were upbeat over the prospects of the stock with some even expecting it to hit the Rs 1,000 mark.

But others including some brokerages were not that optimistic. In the middle of April, domestic brokerage Edelweiss Research said that the stock's bull-run may come to an end. It had initiated coverage on the stock with 'hold' and 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.

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On April 20, Pavitraa Shetty, Co-founder & Trainer, Tips2Trades said, "Steadily higher oil prices and pricing advantages being one of the leaders in the edible oil industry have fuelled a strong rally in Adani Wilmar thus far. Technically, the stock looks overbought and investors are advised to book partial profits at current levels. A dip near Rs 460-475 should be used to re-enter the stock for better returns."

Adani Wilmar Q4 results: Net profit falls 26% YoY to Rs 234 cr, revenue jumps 40%

The stock ran up a massive 297.44 per cent to Rs 878.35 till April 28 compared to its listing price of Rs 221 on February 8. 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.