Adani Wilmar stock triples in two months; what should you do?

Adani Wilmar stock seems to have rallied too far in just over two months. The stock of the Adani Group delivered a return of 205 per cent since its muted debut on February 8 this year. The stock ended at Rs 676 on Tuesday against the listing price of Rs 221 on BSE. However, the stock hit upper circuit of five per cent and hit a record high of Rs 701.65 in the same session.

Market cap of the firm stood at Rs 90,977 crore on BSE. The company logged a muted market debut on February 8.

Shares of the Adani Group firm 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 company offered its shares in a price band of Rs 218-Rs 230.

Also Read: Adani Group shares defy market fall: Four hit record highs

The stupendous rally has left investors puzzled whether it is the right time to enter, hold or sell the stock.

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."

Domestic brokerage Edelweiss Research is of the view that the stock's bull run may come to an end. It has 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.

In March, global brokerage JP Morgan said that the stock was perfectly priced now. The brokerage has a 'neutral' rating with a base case March 2023 target price of Rs 367 on the stock.

Adani Wilmar reported a 66 per cent year-on-year rise in its consolidated net profit at Rs 211 crore for the quarter ending December 31, 2021 against net profit of Rs 127 crore in the year-ago period.

Revenue from operations climbed 40.5 per cent to Rs 14,379 crore in the quarter under review compared to Rs 10,229 crore in the same quarter last fiscal. FMCG revenue zoomed 46 per cent to Rs 703 crore.  

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.