Adani Wilmar is a joint venture between Adani and Singapore’s Wilmar Group. Adani Wilmar is a major player in the FMCG (Fast-Moving Consumer Goods) industry known for their expertise in edible oils.
Their edible oil brand “Fortune” is a household name. Their product spectrum price category-wise is as below –
Let’s discuss Adani Wilmar’s share price target by 2025 in detail.
Adani Wilmar Share Price Target 2024 & 2025
As of today, Adani Wilmar’s share price stands at Rs 352, which is almost a 50% decrease from the last year. Adani Wilmar shares have lost almost one-third of their value since January 24.
This stock price crash happened after Hindenburg (a US-based short seller) shared a research report that criticized the financial manipulations within the Adani Group of companies.
However, the stock market experts, including the Nuvama, are feeling bullish about Adani Wilmar’s comeback and have their sights set on a target price for 2025, which could be around Rs 600.
Now, that’s a substantial leap, but let’s dig deeper into two major reasons the experts are so optimistic.
- Value-Added Blended Oils: Adani Wilmar is making strategic investments in value-added blended oils. This is a smart move because it diversifies their product offerings and taps into the growing health-conscious consumer market.
- Strong Growth Trajectory: The FMCG industry has been on a strong growth trajectory and Adani is expected to get the benefit of this growth. This signals a positive trend and captures the interest of market experts who believe in the company’s potential.
Also, read the share price target of Adani Power by 2025 subsidiary company of Adani group.
Fundamental Analysis of Adani Wilmar
I. Revenue growth
The company has shown a good revenue growth of 23.06% for the past 3 years.
|Revenue (in Rs crores)
II. Profit growth
After showing an exponential profit growth started in 2019 till March 2022. Now Adani Wilmar had a tough time in the recent quarter. Their profits dropped by 60%, going from Rs 234.29 crore last year to Rs 93.6 crore this year.
For the whole year that ended on March 31, 2023, the company’s profits fell by 28%, going from Rs 804 crore last year to Rs 582 crore this year.
|Profit (in Rs crores)
You can see a decline in profits in the March 2023 quarter, mainly due to a drop in edible oil prices compared to high-price inventory that affected the profitability of the company.
III. Cash Conversion Cycle and CFO/PAT Ratio
Here’s something that might catch your attention Adani Wilmar boasts an efficient Cash Conversion Cycle of 48.21 days. This indicates that they manage their cash flow effectively.
Additionally, the company’s CFO/PAT ratio stands at 1.74, which further highlights its ability to convert profits into cash.
Technical Analysis of Adani Wilmar
Adani Wilmar is currently trading below its Moving Average-50 (standing at 390) and Moving Average-200 (which is at 448) showing a bearish sign.
If you check out the oscillators, four oscillators are showing a neutral sign, including the Relative Strength Index (RSI) at 48.17.
The only indicator giving a buy signal is the momentum oscillator.
Risk Factors of Investing in Adani Wilmar
- Low-Interest Coverage Ratio – The company has a low-interest coverage ratio, which means it might face challenges in covering its interest expenses.
- Low Return on Equity – Over the last three years, Adani Wilmar has reported a return on equity (ROE) of 13.0%, which is relatively low. This indicates that they might not be utilizing shareholders’ equity as efficiently as some other companies.
- High Cost of Borrowing – The cost of borrowing for Adani Wilmar appears to be high, which could impact their profitability.
- Low EBITDA Margin – The company’s EBITDA margin, standing at 3.60% over the past five years, suggests that they have relatively thin profit margins.
- High PE Ratio – Adani Wilmar is currently trading at a high Price-to-Earnings (PE) ratio of 114.77. This means investors are paying a premium for the stock.
- High Promoter Holding – While high promoter holding can sometimes be seen as a vote of confidence, it can also limit the stock’s liquidity.
- Dividend Policy – It’s worth noting that despite reporting profits, Adani Wilmar has not been paying out dividends. This might affect your investment strategy if you’re looking for income from your investments.
As per the market expert opinions, Adani Wilmar could see its share price reach around Rs 600 by 2025. However, remember that investing in stocks always carries risks, and it’s crucial to consider your own financial goals and risk tolerance before making any decisions.
In the world of investing, knowledge is your best friend. Keep yourself informed, stay updated with the latest news about Adani Wilmar, and consider consulting with a financial advisor before making any investment decisions.
You can also check out other share price-related articles –
- Lloyd Steel Share Price Target
- Vedanta Share Price Target
- GTL Infra Share Price Target
- Rattan Power Share Price Target
It’s essential to conduct thorough research and consider your investment goals before making any decisions. Consulting with a financial advisor is also a wise step.
The company’s dividend policy is determined by its management and board of directors. They may choose to reinvest profits back into the business or have other priorities.
If you’re already invested, it’s a good idea to regularly review your portfolio and stay updated with the company’s performance. Consider your investment horizon and goals before making any changes.