Adani Wilmar share price hits upper circuit. ICICI Securities gives hold rating
Premium- Adani Wilmar share price hit 5 per cent upper circuit on second successive session on Wednesday
Multibagger stock: Participating in pull-back rally on Dalal Street, Adani Wilmar share price hit upper circuit for second straight session on Wednesday. Adani Wilmar share price today opened upside and hit 5 per cent upper circuit at ₹636.55 levels. After retracing from life-time high of ₹878 apiece on NSE, these successive upper circuits are expected to provide relief to Adani Wilmar shareholders. Adani Wilmar shares are one of the multibagger stocks in 2022 as it has delivered more than 135 per cent return in YTD time.
According to ICICI Securities, Adani Wilmar shareholders are advised to hold the stock further as the company is a strong market leader in branded edible oil and industry essentials.
Highlighting the reason for giving 'hold' rating to Adani Wilmar shares, ICICI Securities says, "Adani Wilmar (AWL) is a strong market leader (50:50 JV between Adani Group and Wilmar) in branded edible oil and industry essentials with aspirations to further scale-up packaged foods. Strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar)) in edible oil provide AWL with an edge over competition."
ICICI Securities further added that AWL enjoys multiple synergies across all three business segments which augur well for scale up of packaged foods business – a) scale in procurement & logistics, b) brand recall of ‘Fortune’ and c) readily available distribution and mix-load supply chain benefit from edible oil.
Expecting 'Fortune' brand to drive Adani Wilmar's expansion in packaged food business, ICICI Securities says, "AWL has plans to drive expansion in packaged foods business. We believe there is a possibility of a pleasant surprise in the segment (execution is the key). AWL also plans to invest incremental capex to support the high growth in packaged foods business (lower utilisation levels in edible plants which implies lower capex requirement). Besides, its recent acquisition (announced) of Kohinoor Brand (domestic) rights strengthens its position in the branded rice category."
On its suggestion in regard to Adani Wilmar share price outlook, ICICI Securities said, "We model revenue / EBITDA / PAT CAGR of 9%/24%/35% over FY22-24E. We initiate coverage on the stock with HOLD rating." The ICICI Securities report said that one should continue to hold the stock till it is above ₹550 levels.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.