BackAdani Wilmar stock falls sharply but recovers in last hour of trade; closes 5.3% higher
Adani Wilmar shares had a volatile trading session, opening at ₹295 per share and briefly dipping to ₹290. By 2:30 PM, it slid further to ₹285.80 before closing with a gain of 5.32% at ₹310.70 per share.
PremiumAdani Wilmar shares experienced a roller-coaster ride in today's trading session. The stock opened the day at ₹295 per share, briefly dipping to the ₹290 level. By 2:30 PM, it had faced further correction, sliding to ₹285.80. However, it regained momentum in the last hour of trade and closed the session with a gain of 5.32% at ₹310.70 per share.
From the day's low, the stock recovered ₹24.9 or 8.71%.
Also Read: US invests $553 million in Adani’s Sri Lanka Port to curb China’s Influence
Adani Wilmar is an equal joint venture between business conglomerate Adani Group and Singapore-based Wilmar International, wherein both hold 43.97% stake each. The shares are currently trading at a 21-month low. Taking the stock's record high price of ₹841 apiece into account, it is currently down by 63%.
On November 01, the company reported a net loss of ₹130.73 crore for the second quarter of FY24 as compared to a net profit of ₹48.76 crore in the same quarter last fiscal. The company posted a net loss of ₹78.92 crore in the preceding June quarter.
Also Read: 7 of 10 Adani Group companies reported net profit growth in Q2; check full list
The revenue from operations in Q2FY24 declined 13% to ₹12,267.15 crore from ₹14,150.03 crore, due to a steep correction in the prices of edible oils. It recorded a volume growth of 11% YoY in Q2. H1FY24 volume growth stood at 18% YoY.
On the operational front, earnings before interest, tax, depreciation and amortization (EBITDA) dropped by 43% to ₹144 crore from ₹254 crore, while the EBITDA margin contracted to 1.2% from 1.8% YoY.
Also Read: Adani Group in talks to sell its entire 43.97% stake in Adani Wilmar: Report
Following the company's Q2FY24 performance, domestic brokerage firm ICICI Securities maintained its 'reduce' rating on the stock and lowered its target price to ₹295 apiece from ₹350 apiece.
The brokerage significantly lowered its earnings estimates for FY24E, citing a substantial impact on profitability, and by 16% for FY25E, modelling revenue, EBITDA, and PAT CAGR of 1%, 10%, and 24% over FY23–25E. The brokerage outlined some key risks, including higher volatility in raw material prices and the potential failure in scaling up the food business.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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