Adani Wilmar shares rebound from one-year low, settle 5% higher; company clarifies on stock price movement

Shares of Adani Wilmar saw a sharp recovery after hitting their fresh one-year low price on Monday. The stock fell 3.10 per cent to touch a 52-week low of Rs 285.85 during intraday deals. It later staged a rebound to close 5.05 per cent higher at Rs 309.90. Despite the mentioned rise, the scrip has declined 57.21 per cent from its one-year high of Rs 668, a level seen on December 1 last year.

Stock exchange BSE today sought clarification from the company on the stock price movement. Adani Wilmar, in response, said, "We would like to clarify that the movement in the share price of the company is purely due to market conditions and absolutely market driven and the management of the company neither has any control nor has any knowledge of reasons for movement in price of shares."

We would also like to confirm that the company is not aware of any information which is required to be disclosed and which has not already been disclosed to the stock exchanges, it added.

On BSE, around 8.72 lakh shares changed hands today. The figure was way more than the two-week average volume of 2.51 lakh shares. Turnover on the counter stood at Rs 26.10 crore, commanding a market capitalisation (m-cap) of Rs 40,277.04 crore.

The counter traded higher than the 5-day, 10-, 20-day simple moving averages (SMAs) but lower than the 30-day, 50-, 100-, 150-, 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 45.43. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 161.57 against a price-to-book (P/B) value of 5.12.

The scrip has an analyst target price of Rs 353, Trendlyne data showed, suggesting a potential upside of 14 per cent in a year. It has a one-year beta of 0.6, indicating low volatility on the counter.

Edible oil major Adani Wilmar reported a consolidated net loss of Rs 130.73 crore in the September 2023 quarter (Q2 FY24), as profitability was badly impacted in the cooking oil business. The company, which sells edible oil and other food products under the Fortune brand, had posted a net profit of Rs 48.76 crore in the corresponding period last year.

Its total income also slipped to Rs 12,331.20 crore during the July-September period of 2023-24 from Rs 14,209.20 crore in the year-ago period.

The total expenses of Adani Wilmar came at Rs 12,439.45 crore during the second quarter of this fiscal against Rs 14,149.62 crore in the same period a year ago.

In volume terms, the company's sales grew 11 per cent to 1.46 million tonnes. Adani Wilmar said profitability was adversely impacted due to loss in the edible oil segment, which was partially offset by better margins in the Food & FMCG and industry essential segments.

Edible oil losses are primarily driven by divergent trends in the spot (physical) and future prices, resulting in hedging losses, it added.

During Q2 FY24, the edible oil business contributed 58 per cent to the total volumes. However, the cooking oils accounted for 74 per cent of the total revenue from operations, which stood at Rs 12,267 crore.

Adani Wilmar is an equal joint venture (JV) between the Adani Group and Singapore-based Wilmar.

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