Hold Adani Wilmar, target price Rs 550: ICICI Securities

ICICI Securities has hold call on Adani Wilmar with a target price of Rs 550. The current market price of Adani Wilmar is Rs 636.55.

Adani Wilmar, incorporated in the year 1999, is a Small Cap company (having a market cap of Rs 78793.02 crore) operating in General sector.

Adani Wilmar key Products/Revenue Segments include Personal Care and Other Operating Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 15022.94 crore, up 4.28 % from last quarter Total Income of Rs 14405.82 crore and unchanged from last year same quarter Total Income of Rs crore. Company has reported net profit after tax of Rs 219.23 crore in latest quarter.

Investment Rationale
Adani Wilmar (AWL) is a strong market leader (50:50 JV between Adani Group and Wilmar) in branded edible oil and industry essentials with aspirations to further scale-up packaged foods. Strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar)) in edible oil provide AWL with an edge over competition. Further, AWL enjoys multiple synergies across all three business segments which augur well for scale up of packaged foods business – a) scale in procurement & logistics, b) brand recall of ‘Fortune’ and c) readily available distribution and mix-load supply chain benefit from edible oil.

The brokerage models revenue/EBITDA/PAT CAGR of 9%/24%/35% over FY22-24E. It initiates coverage on the stock with HOLD rating and SoTP-based TP of Rs 550. Key risks: 1) Higher volatility in raw material prices, 2) failure in scaling up packaged foods.

Promoter/FII Holdings
Promoters held 87.94 per cent stake in the company as of 31-Mar-2022, while FIIs owned 2.01 per cent, DIIs 0.41 per cent.