Adani Wilmar Share Price: A Review of the Company’s Performance and Outlook
Adani Wilmar Ltd. is one of the leading edible oil and food products companies in India, with a market capitalization of over Rs. 51,000 crores. The company is a joint venture between Adani Group and Wilmar International and has a diversified portfolio of brands such as Fortune, Aadhar, Kings, Fryola, Raag, and Jubilee. The company also has interests in other segments such as rice, pulses, sugar, soya chunks, besan, and wheat flour.
Financial Results
The company recently announced its financial results for the quarter ended June 30, 2023. The company reported a revenue of Rs. 12,928 crore, down by 12.24% year-on-year (YoY), due to lower volumes and prices of edible oil in the domestic market. The company also posted a net loss of Rs. 78.92 crore, compared to a net profit of Rs. 127.81 crore in the same quarter last year. The company attributed the loss to higher raw material costs, lower margins and higher interest expenses.
The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) was Rs. 112 crore, down by 74.18% YoY. The EBITDA margin was 0.87%, compared to 3.05% in the same quarter last year. The company’s effective tax rate was 9.17%, compared to 25.64% in the same quarter last year.
The company’s earnings per share (EPS) was negative Rs. 0.61, compared to positive Rs. 0.99 in the same quarter last year. The company’s return on assets (ROA) was negative 0.38%, compared to positive 0.62% in the same quarter last year. The company’s return on capital (ROC) was 0.87%, compared to 2.97% in the same quarter last year.
Stock Performance
The company’s share price has been volatile in the past year, reaching a high of Rs. 841.70 on January 11, 2023 and a low of Rs. 327.25 on July 19, 2023. The share price closed at Rs. 398.10 on August 4, 2023, down by 0.82% from the previous close of Rs. 400.50. The share price has underperformed the Nifty Consumer Food index, which has gained 9.63% in the past year.
The company’s trailing twelve months (TTM) PE ratio was 129.38, which is higher than the sector PE ratio of 53.40. The company’s price to book (P/B) ratio was 6.46, which is lower than the sector P/B ratio of 8.01. The company’s dividend yield was zero, which is lower than the sector dividend yield of 0.77%4.
The company’s technical indicators show mixed signals for the stock’s trend and momentum. The moving averages indicate a bearish trend, as the stock is trading below its 20-day, 50-day and 200-day simple moving averages (SMAs). The technical indicators indicate a neutral momentum, as the stock is trading near its relative strength index (RSI), moving average convergence divergence (MACD) and stochastic oscillator levels.
Outlook
The company faces several challenges and opportunities in the near future. The challenges include rising raw material costs, lower domestic demand for edible oil due to Covid-19 pandemic and lockdowns, increased competition from other players in the market and regulatory uncertainties regarding import duties and minimum support prices for oilseeds . The opportunities include increasing market share in the branded segment, expanding product portfolio and distribution network, leveraging digital platforms and e-commerce channels for sales and marketing and exploring new avenues for growth such as biofuels and specialty chemicals.
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The company has taken several initiatives to overcome the challenges and capitalize on the opportunities. The company has increased its procurement of domestic oilseeds to reduce its dependence on imports and hedge against price fluctuations. The company has also launched new products such as Fortune VIVO diabetes care oil, Fortune Soya Health refined soyabean oil and Fortune Rice Bran Health refined rice bran oil to cater to the health-conscious consumers. The company has also invested in enhancing its production capacity, logistics infrastructure and quality standards to improve its operational efficiency and customer satisfaction.
The company’s management has expressed confidence in the company’s long-term prospects and growth potential. The company’s chairman, Gautam Adani, said that the company is well-positioned to benefit from the rising consumption of edible oil and food products in India, which is expected to grow at a compound annual growth rate (CAGR) of 9.5% and 10.1%, respectively, by 2025. The company’s CEO, Angshu Mallick, said that the company aims to achieve a revenue of Rs. 1 lakh crore by 2025, with a focus on increasing its market share in the branded segment from 20% to 30%.
Conclusion
Adani Wilmar Ltd. is one of the leading edible oil and food products companies in India, with a diversified portfolio of brands and products. The company has reported a decline in revenue and net loss for the quarter ended June 30, 2023, due to lower volumes and prices of edible oil in the domestic market and higher raw material costs. The company’s share price has been volatile in the past year, underperforming the sector index. The company faces several challenges and opportunities in the near future, such as rising raw material costs, lower domestic demand, increased competition, regulatory uncertainties, increasing market share, expanding product portfolio, leveraging digital platforms and exploring new avenues for growth. The company has taken several initiatives to overcome the challenges and capitalize on the opportunities, such as increasing procurement of domestic oilseeds, launching new products, investing in production capacity, logistics infrastructure and quality standards. The company’s management has expressed confidence in the company’s long-term prospects and growth potential, aiming to achieve a revenue of Rs. 1 lakh crore by 2025.
