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Business News/ Markets / Stock Markets/  Adani Wilmar shares surge. What should investors do post Q3 results?
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Adani Wilmar shares surge. What should investors do post Q3 results?

Adani Wilmar shares surged more than 5% to ₹440 apiece on the BSE in Thursday's early deals

Adani Wilmar shares were trading higher in early dealsPremium
Adani Wilmar shares were trading higher in early deals

Shares of Adani Wilmar Ltd (AWL) surged more than 5% to 440 apiece on the BSE in Thursday's early deals after the edible oil major reported a 16% increase in its consolidated profit to 246 crore for the third quarter ended December 2022 as compared to 211 crore in the year ago period. Adani Wilmar, which sells its cooking oils and some other food products under the Fortune brand, is a 50:50 joint venture (JV) between business conglomerate Adani Group and Singapore-based food processing company Wilmar International.

Adani Wilmar (AWL) posted a good set of numbers with EBITDA/PAT up 20%/16.4% YoY – well ahead of our estimates; revenue was up 7.4% YoY and in line with our estimates. Overall volumes grew by 16% YoY driven by Food and FMCG/industry essentials, thereby continuing to diversify its revenue base. Gross/EBITDA margins expanded by 140 bp/42 bp YoY and 160 bp/213 bp QoQ. Strong demand on the back of festivities and weddings, gradual recovery in rural markets and a bumper kharif crop acted as tailwinds in Q3FY23," said domestic brokerage and research firm Edelweiss.

Although, Adani Wilmar competes in an extremely competitive business (edible oil and foods/FMCG), it has consistently delivered strong volume growth across segments, the note stated. “We are cutting our FY23E/FY24E/FY25E by 8.2%/5%/4.4% with a roll over to FY25E yielding a revised SoTP-based target price of 680 (earlier 708); retain ‘BUY/SN’ on Adani Wilmar shares," the brokerage added.

Food and FMCG business is now contributing 15%/7% volumes/value to the business and has clocked in 26% YoY volume growth in Q3FY23, which as per Edelweiss is a positive sign as Adani Wilmar's strategy is to focus on positioning itself as a foods business.

Adani Wilmar MD and CEO Angshu Mallick said that the firm recorded an annual growth of 16% in volume terms during the third quarter and witnessed a strong demand on the back of festivities and weddings, gradual recovery in rural markets and a bumper kharif crop.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Published: 09 Feb 2023, 11:30 AM IST
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