Adani Wilmar reported good quarter results in December. Nuvama Institutional Equities said Food and FMCG business is now contributing 15 per cent of volumes and 7 percent of value, a positive sign as the Adani group strategy is to position itself as a foods business. The brokerage did not like the 8 per cent YoY drop in realisation per tonne. The domestic brokerage has lowered its target on the stock to Rs 680 from Rs 708 earlier in the day, which suggests a potential 62 per cent increase over Wednesday's closing price.
The scrip went up 5 per cent to hit a new high of Rs 440.30 on Thursday.
It said that distribution channels other than GT had a strong YoY growth of 32 per cent YoY.
The management argued that gross profit tonne went up 5 per cent YoY and PBT tonne up 2 per cent YoY.
There was an increase in the benchmark rates that increased the interest cost for the quarter and is expected to be more or less similar. In Q 3 Bangladesh operations reported loss due to unfavourably forex impact and price caps on edible oil by government. A 20 per cent duty on rice resulted in a slowdown in rice exports, Nuvama said.
Nuvama said that Adani Wilmar has delivered strong volume growth across segments, because of the competitive business of edible oil and foods FMCG. The brokerage has trimmed its FY 23 E-FY 25 by 4.4 -- 8.2 per cent with a roll over to FY 25 E, yielding a target of Rs 680.
Adani Wilmar had a 16 per cent rise in the consolidated net profit at Rs 246 crore for the December quarter compared to Rs 211 crore in the corresponding quarter last year. Revenue for the quarter went up 7 per cent YoY to 15,438 crore compared to Rs 14,371 crore in the same quarter last year. The Adani group said volume for the quarter increased by 16 per cent YoY, thanks to the large opportunity available in the packaged food industry.