Adani Wilmar’s stock price has been rallying since the middle of last month, as investors expect to benefit from geopolitical tensions propelling commodity prices. Since March 15, Adani Wilmar’s share price has risen 79%, boosting its total return to 164% since listing in February. As edible oil prices move up, analysts believe that Adani Wilmar may gain more by leveraging its unsold inventory of goods. Adani Wilmar’s stock closed at Rs 609 per share after hitting 5 per cent upper circuit in day’s trading today.
Unsold inventory to benefit Adani Wilmar
Ravi Singh, Vice President and Head of Research, ShareIndia, told FinancialExpress.com, “The Ukraine-Russia war has boosted commodity prices across the world, especially edible oil prices.” “Ukraine is one of the largest exporters of soybean seeds and oil and the war has caused the entire supply to disappear. Adani Wilmar’s unsold inventory is going to be profitable due to this crisis and the balance sheet of the company will be further strengthened,” he said .
A recent report by Edelweiss on Adani Wilmar states that the company is a leading player in terms of market share in soybean oil, mustard oil, stearic acid and glycerin. Adani Wilmer is the owner of the Fortune brand.
unlikely to face shortage
While equity markets were shaken by the Russia-Ukraine war that began in February, commodity markets rose. Analysts believe that this rally in commodity prices could benefit Adani Vimar. Sonam Srivastava, Founder, SEBI-registered investment advisor Wright Research, said, “In such a scenario, to meet the supply constraints, Adani Wilmar has emerged as India’s No. 1 kitchen essential company banking on its homegrown brand Fortune Oil. ” , He added that Adani Wilmar is unlikely to be affected by the global shortage as it has a diversified product portfolio and a premium brand position.
Adani Wilmar is a joint venture between Adani Group and Wilmar International. The latter is the world’s largest palm oil supplier, giving the company the advantage of not relying heavily on suppliers.
Should you buy, sell or hold Adani Wilmar stock?
Although the stock of Adani Wilmar has already gained momentum, but there may be further gains. “At this stage it is now overbought, but who can have it for the target of Rs 688 due to the supply agreement of edible oil and other agricultural products, can expect inventory profits, as well as many other countries. There is growing demand from countries such as Sri Lanka and Brazil as well as several European countries,” said Ravi Singhal, Vice President, GCL Securities.
The trend is also looking bullish for Adani Wilmar on the charts. ShareIndia’s Ravi Singh says the counter is strongly bullish on key momentum indicators like RSI, MACD, Williams and 200 DMA. “Investors can maintain their position towards the target of 650 in the short term,” he added.
For investors currently holding the stock, Sonam Srivastava recommends holding the shares for a short period and then start liquidating the position when the market starts profit-booking. He added that new investors can take advantage by buying shares in small quantities.
(The stock recommendations in this story are by related research and brokerage firms. Financial Express Online assumes no responsibility for their investment advice. Please consult your investment advisor before investing.)