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Should You Buy This Adani Group Stock That Is Increasing Market Share In Flour, Edible Oils & Rice?
Adani Group stocks have been on a roll over the last one couple of years, out performing markets by a distance. Some Adani Group stocks have really seen numbers swell. Here is one Adani Group stock that is likely to continue to grow and the stock could be bought on declines.
Adani Wilmar: Increasing its market share across categories
In the wheat flour business the company has increased its market share from 3.8% in the first quarter of FY 2022 to 4.9% in FY 2022-23. Similarly, basmati rise has seen the market share rise to 8.4% from 5.75% in FY 2022. The group has also seen the edible business oil grow from 19% market share to 19.6%. The company has now surpassed Hindustan Unilever as the largest FMCG company in India in terms of revenues.
Expansion plans to drive business
The Adani Wilmar Group is planning to open more Fortune Mart outlets in the coming years. It plans to open 5 more outlets in the second quarter of FY 2023. Multiple outlets to be opened in major cities to enable fulfilment of online orders (Fortune Online). The company also plans to support to be extended to Fortune Mart stores to grow
Reduced debt
The company has used the IPO proceeds to completely pay back long-term borrowings of Rs 1059 crores This should augur well for the company when interest rates are rising.
Net profits continue to grow
The company reported a 10% growth in net profits for the quarter ending June 30, 2022 at Rs 194 crores, as against Rs 176 crores reported in the corresponding period of last year. The revenue of the company jumped 30% TO Rs 14,734 crores in the first quarter of FY 2022-23.
How the stock price has performed?
On the Bombay Stock Exchange, the stock of Adani Wilmar hit a 52-week high of Rs 878 and a 52-week low of Rs 221. The stock was last seen trading at Rs 666 on the NSE. The shares have jumped up sharply in the last few quarters and investors are advised to buy the stock of Adani Wilmar only on declines.
Should you buy the stock Adani Wilmar?
The answer is no, given that the stock is expensive at the current levels even despite the above. The company reported an EPS of Rs 1.49 for first quarter ending June 30, 2022. Even if very optimistically the company does an EPS of Rs 10, the stock at Rs 666, is trading at 66 times p/e multiple, which is expensive. There are many other stocks that are attractively priced. Investors should also note that the markets have run-up sharply in the last few days and this may not be the best time to invest.
Disclaimer
Please note that investing in shares is risky and Greynium Information Technologies Pvt Ltd and the author cannot be held responsible for losses based on a decision taken after reading this article. Investing in equities is risky and investors should exercise caution before investing in the markets. In the last few weeks, the markets too have run-up sharply.
