Adani Wilmar Share Shoots Up 11% In 2 Trading Sessions, Reverses From 1-Year Lows; Bulls Bandwagon Begins?

Adani Wilmar, the FMCG giant of Adani Group, has turned a new leaf on stock exchanges. From toppling to a near 1-year low to making a reversal and rising by a little over 11% in two consecutive trading sessions on Tuesday. Since the start of this week, Adani Wilmar has made remarkable gains. The stock has crossed the Rs 320 mark and Anand Rathi analyst believes the bulls might take control from here.

On BSE, so far on Tuesday's trade, Adani Wilmar shares have hit an intraday high of Rs 327.50 apiece, jumping by 5.7%. So far, its market cap has gained by nearly Rs 2,296 crore, totalling Rs 42,573 crore.

That being said, Adani Wilmar is up by 11% since Monday.

Talking about the latest upside in the two trading sessions, Jigar S. Patel, Sr. Manager - Equity Research at Anand Rathi Investment Services said, "AWL was constantly making lower-top lower lows, which is a sign of a well-established bear trend. Recently, since the last 2 sessions, it has bounced back from historical support of 285 approx., though it has tested the bear trendline but has not closed above it."

He added, "Once we get close above 320 levels on a daily basis, the bulls might take control from there. Having said that, the last two days of bounce looks genuine since they are accompanied by massive volume. One can add longs in the zone of 300-320 with a stop-loss of 284 on a daily close basis with an upside target of 360."

On the previous session, Adani Wilmar shares ended at Rs 309.90 apiece, up by 5.05% on BSE with m-cap of Rs 40277.04 crore. On Monday, the shares had slipped to a one-year low price of Rs 285.85 per share. However, it picked up momentum after Adani Wilmar clarified exchanges about its price performance.

In its regulatory filing, Adani Wilmar said, "We would like to clarify that the movement in the share price of the company is purely due to market conditions and absolutely market driven and the management of the company neither has any control nor has any knowledge of reasons for movement in price of shares."

Last week, Adani Wilmar shares were at Rs 295 apiece, down by 0.71% on Friday. It ended this trading week on a flat note.

Adani Wilmar has recorded significant losses in Q2FY24. During the quarter, the company's net loss doubled to Rs 130.23 crore compared to a loss of Rs 59.71 crore in Q1FY24. This FMCG company has been recording losses since June 2023, but the bottom line came under pressure since the March 2023 quarter, when it recorded a steep fall of 62% in PAT to Rs 94 crore from Rs 246 crore of the December 2022 quarter. Consolidated revenue from operations has also taken a hit in Adani Wilmar to Rs 12,267.15 crore in Q2FY24, down from Rs 14,150.03 crore in Q2FY23 and Rs 12,928.08 crore.

Looking ahead, Parth Shah, Research Analyst, StoxBox said, "Though Adani Wilmar shares have shown traction in the last two days, our sense is that the company's financial performance does not commensurate with the valuation it commands in the market."

Moreover, Shah added, "The commoditized nature of the business would result in volatility in earnings due to fluctuation in raw material business. Also, the growing competition in the packaged food business limits the visibility for growth in the food segment. As a result, we remain cautious on the outlook of the business in the near to medium term."

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