After Adani Power hit the Rs. 1 trillion m-cap yesterday, shares of Adani Wilmar-the latest Adani Group stock market debutant too made a similar mark. Since early trade today, the shares of Adani Wilmar are locked in 5% upper circuit at Rs. 803.15 per share on the NSE. On gains, the shares of the edible oil industry firm hit the milestone of reaching a market capitalization of Rs. 1 lakh crore.
As per experts, the constant demand supply constraints with respect to the raw material needed for edible oil as well as the latest Indonesian ban on palm oil exports is adding to the woes. So, as a result of supply side issues, there is likely to be a futher increase in edible oil prices. The same shall be good for companies like Adani Wilmar.
Further if going by experts, in case of price hikes, big companies in the space including Adani Wilmar shall benefit given the fact that they maintain inventory or buffer stock of raw materials for sustained business activity.
On the other hand, there is also a cautious view, Santosh Meena, Head of Research, Swastika Investmart Ltd said, "The Ukraine war has shot commodity prices higher worldwide, Ukraine being the largest exporter of oil seeds like sunflower, and soybean seeds have pushed the edible oil prices. The Indonesian palm oil export ban and Malaysian export tax will further squeeze the oil supply. This whole problem has skyrocketed edible oil prices in India, benefiting edible oil companies like Adani Wilmar. The company will have windfall gains via. unsold inventory revaluation. Further, this situation will improve the overall margins for the company. Due to these factors the company has finally crossed the Rs. 1 lakh market cap level. However, we advise investors to stay cautious as the stock has moved far ahead from its fundamentals."
The company's issue hit this year itself and produced multibagger returns. In comparison to the issue price of Rs. 230 per share, the stock has gained 249%, while over its listed price of Rs. 221, the stock has soared a mind-boggling 263%. This is a gain in merely 2 months and 18 days. The stock hit the bourses on February 8, 2022.