Shares of Adani Wilmar Limited have galloped to hit the upper circuit on the sixth straight day and have given multibagger returns of 181.63% to its shareholders in year-to-date (YTD) time. The company’s recent bet on staples and the search for the acquisition of regional rice brands in several states of India, has added fuel to the rise.
Adani Wilmar’s share price opened at ₹639.30 apiece and got locked at the 5% upper circuit today.
Stock market experts say that its share price is in an uptrend and is backed by strong fundamentals and technical support at current levels. They say that rising commodity prices, especially palm oil price, geopolitical tension in Ukraine and the crisis in Sri Lanka has made D-Street observers highly bullish on the stock for the short term as it may create a new business opportunity.
They said that the RM seed output is also expected to come lower, and lead to an increase in its price, which will help the company to cash-in margin benefit from its currently available buffer stock.
“Due to Russian invasion of Ukraine, edible oil supply system has been hit badly and the market is expecting Adani Wilmar Ltd to fill that gap as edible oil prices have gone very high in European countries these days. Now, there is Sri Lanka crisis as well and Indian government has already started sending edibles to the island nation. In such condition, these developments outside Indian border is expected to give huge business opportunity to this Adani group company. Apart from this, palm oil and other commodity prices have been soaring and the company has good buffer stock to counter the rising raw material prices. It may help improve company’s EBITDA in upcoming quarterly results,” said Ravi Singhal, Vice Chairman at GCL Securities.
Sonam Srivastava, Founder at Wright Research — a SEBI-registered investment advisor said that Adani Wilmar is unlikely to get impacted by the global shortage as it has a diversified product portfolio and a premium branding position. Commodity markets went soaring amid the Russia Ukraine crisis. However, Adani Wilmar has emerged as India’s No 1 kitchen essential company banking on its home-grown brand Fortune Oil, to fulfil the lack of supply. She added that the company is unlikely to get impacted by the global shortage as it has a diversified product portfolio and a premium brand positioning.
Should you buy, sell or hold?
“It is now overpriced at this level, but who has it can hold for a target of Rs 688 because of the supply agreement of edible oil and other Agri products, inventory profits can be expected, as well as increased demand from many other countries such as Sri Lanka and Brazil, as well as many European countries,” said Ravi Singhal, Vice Chairman, GCL Securities.
Ravi Singh of Share India said that the counter is strongly bullish and that investors may hold their positions for a target of 650 levels in the near term.
For investors who own the stock currently, Sonam Srivastava advised holding on to the shares for a short period and then start liquidating positions as the market starts to book profits. She added that new investors can benefit by purchasing shares in small quantities.
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