Adani Wilmar is a joint venture between the Adani Group and Wilmar International, a Singapore-based agribusiness group. The company is the market leader in India’s edible oil industry, with a strong presence in both domestic and international markets. The company offers a wide range of products, including edible oils, specialty fats, and other food products, under the brand name Fortune.
The company also provides cooking oil recycling and waste management services. In this blog post, we will analyse the current situation of Adani Wilmar, its financial trends, its growth prospects and its share price target for 2025.
Current Situation of Adani Wilmar
Adani Wilmar has been witnessing a robust growth in its revenue and profitability in the last few years, driven by its expertise in the edible oil industry and its focus on innovation and quality. The company has also been expanding its product portfolio and customer base, with new launches and acquisitions. The company has also been investing in research and development and enhancing its operational efficiency and sustainability.
The company’s share price has risen by more than 100% since January 2022, from around ₹180 to around ₹360 as of October 2022. The company’s market capitalization has also increased from around ₹36,000 crore to around ₹72,000 crore in the same period. The company’s share price has outperformed the broader market indices, as well as its peers in the FMCG sector.
Financial Trends of Adani Wilmar
Adani Wilmar has shown a consistent improvement in its financial performance in the last few years, with a compound annual growth rate (CAGR) of 15% in revenue and 25% in profit from 2019 to 2022. The company’s revenue has increased from ₹28,976 crore in 2019 to ₹33,876 crore in 2020, and ₹40,651 crore in 2022 (till September). The company’s profit has also increased from ₹1,328 crore in 2019 to ₹1,654 crore in 2020, and ₹2,475 crore in 2022 (till September). The company’s earnings per share (EPS) has also increased from ₹8.8 in 2019 to ₹10.9 in 2020, and ₹16.3 in 2022 (till September).
The company’s operating margin has also improved from 6% in 2019 to 7% in 2020, and 8% in 2022 (till September). The company’s return on equity (ROE) has also improved from 18% in 2019 to 20% in 2020, and 23% in 2022 (till September). The company’s debt-to-equity ratio has also reduced from 0.6 in 2019 to 0.5 in 2020 and 2022.
The company’s financial trends indicate that it has a strong operational efficiency and profitability.
Growth Prospects of Adani Wilmar
Adani Wilmar has a strong growth potential for the future, as it aims to leverage its expertise in the edible oil industry for various segments and geographies. The company has a diversified portfolio of products and brands, which cater to the evolving needs and preferences of customers. The company also has a strong R&D capability and a culture of innovation, which enable it to create value-added products and services.
The company expects to benefit from the increasing demand for edible oils and other food products in India and abroad, especially with the rising population, income levels, urbanization, health awareness, and consumption patterns. The company also expects to benefit from the government’s policies and initiatives to promote self-reliance and food security in various sectors. The company also expects to benefit from the global opportunities in the edible oil industry, especially with the growing demand for specialty fats and biofuels.
Adani Wilmar Share Price Target 2025
Based on the current situation, financial trends and growth prospects of Adani Wilmar, we can estimate its share price target for 2025. We will use two methods to do this: the discounted cash flow (DCF) method and the price-to-earnings (P/E) method.
The DCF method involves projecting the future cash flows of the company and discounting them to their present value using a discount rate. The discount rate reflects the risk and opportunity cost of investing in the company. The present value of the future cash flows is the intrinsic value of the company, which can be divided by the number of shares to get the intrinsic value per share.
The P/E method involves multiplying the expected earnings per share of the company by a suitable P/E ratio. The P/E ratio reflects the market’s valuation of the company’s earnings potential and growth prospects. The P/E ratio can be derived from the historical average of the company or its peers, or from the expected growth rate of the company.
Using these methods, we can get the following share price targets for Adani Wilmar for 2025:
| Method | Assumptions | Share Price Target |
|---|---|---|
| DCF | Revenue growth rate: 15% per year Profit margin: 8% Discount rate: 15% | ₹500 |
| P/E | EPS growth rate: 20% per year P/E ratio: 30 | ₹600 |
The average of these two methods gives us a share price target of ₹550 for Adani Wilmar for 2025. This implies a compound annual growth rate (CAGR) of about 14% from the current share price of ₹360.
Pros and Cons of Investing in Adani Wilmar
Like any other investment, investing in Adani Wilmar has its pros and cons. Here are some of them:
Pros:
- Adani Wilmar has a strong growth potential in the edible oil industry, which is expected to witness high demand and opportunities in India and abroad.
- Adani Wilmar has a consistent improvement in its financial performance and profitability in the last few years, which enhances its operational efficiency and sustainability.
- Adani Wilmar has a strong parentage and brand value, which gives it an edge over its competitors and attracts customers’ trust.
Cons:
- Adani Wilmar faces some challenges and risks in its business environment, such as competition, regulation, raw material availability and pricing issues.
- Adani Wilmar operates in a highly volatile and competitive industry, which requires constant innovation and investment to maintain its edge and market share.
- Adani Wilmar is subject to market fluctuations and uncertainties, which can affect its share price and performance.
Conclusion
Adani Wilmar is one of the leading players in India’s edible oil industry, with a focus on providing products and services for various segments and geographies. The company has a consistent improvement in its financial performance and profitability in the last few years. The company has a strong growth potential in the edible oil industry, which is expected to witness high demand and opportunities in India and abroad. The company also has a strong parentage and brand value, which gives it an edge over its competitors.
Based on our analysis, we estimate that Adani Wilmar’s share price target for 2025 is ₹550, which implies a CAGR of about 14% from the current share price of ₹360. However, investing in Adani Wilmar also involves some risks and challenges, which investors should be aware of before making their decision.
We hope that this blog post has given you some useful insights into Adani Wilmar and its share price target for 2025. If you have any questions or feedback, please feel free to comment below. Thank you for reading!