Adani Wilmar share price has been marching higher since the middle of last month, as investors look to benefit from geo-political tensions giving a push to commodity prices. Since March 15, Adani Wilmar share price has galloped 79%, extending its total returns since listing in February to a stellar 164%. As edible oil prices soar, analysts believe that Adani Wilmar could be in for further gains, taking advantage of its unsold inventory of goods. Today, Adani Wilmar shares ended at Rs 609 per share, after hitting the 5% upper circuit during the day’s trade.
Unsold inventory to benefit Adani Wilmar
“The Ukraine Russia war has propelled commodity prices worldwide, especially the edible oil prices,” Ravi Singh, Vice President and head of Research, ShareIndia, told FinancialExpress.com. “Ukraine is one of the biggest exporters of soybean seed and oil and the war has vanished the entire supply. Adani Wilmar unsold inventory is going to be beneficial due to this crunch and the balance sheet of the company will strengthen further,” he added.
A recent report by Edelweiss on Adani Wilmar said that the company is the leading player by market share in Soybean Oil, Mustard Oil, Stearic Acid, and Glycerin. Adani Wilmar owns the Fortune brand.
Unlikely to face shortage
While equity markets were shaken by the Russia-Ukraine war when it started in February, commodity markets went soaring higher. Analysts believe Adani Wimar can benefit from this rise in commodity prices. “In such a scenario, to fulfill the lack of supply, Adani Wilmar has emerged as India’s No 1 kitchen essential company banking on its home-grown brand Fortune Oil,” said Sonam Srivastava, Founder at Wright Research — a SEBI-registered investment advisor. She added that Adani Wilmar is unlikely to get impacted by the global shortage as it has a diversified product portfolio and a premium brand positioning.
Adani Wilmar is a joint venture between the Adani Group and Wilmar International. The latter is the world’s largest palm oil supplier, giving the company the advantage of not relying too heavily on suppliers.
Should you Buy, Sell, or Hold Adani Wilmar stock?
Although Adani Wilmar stock has already run up sharply, there could still be more gains. “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.
On the charts too the trend is seen to be bullish for Adani Wilmar. Ravi Singh of ShareIndia said the counter is strongly bullish on major momentum indicators like RSI, MACD, Williams and 200 DMA. “Investors may hold their positions for a target of 650 levels in the near term,” he added.
For investors who own the stock currently, Sonam Srivastava advises 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.
(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)
