Shares of edible oil manufacturer Adani Wilmar have rallied a whopping 42 per cent to hit record high of Rs 504.75 on the BSE ever since Russian invasion of Ukraine began last month. The stock climbed for ninth session in a row on Tuesday. Strong buying interest in Adani Wilmar came on the back of supply disruption of sunflower oil which is largely produced by Ukraine and Russia in the world.
As per reports Ukraine accounts for 70 per cent of sunflower production and Russia 20 per cent. Ukraine had the highest production volume of sunflower seeds of any country in the world in the 2021/2022 crop year. During that time period, Ukraine produced around 17.5 million metric tons of sunflower seeds. Russia is also a major producer of sunflower seeds worldwide, with a production volume of 15.5 million metric tons in 2021/2022, according to market and consumer data firm Statista.
Meanwhile, India has contracted 45,000 tonnes of Russian sunflower oil at a record high price for shipments in April as edible oil prices in the local market surged after supplies from rival Ukraine stopped because of the war, news agency Reuters reported citing sources.
"Adani Wilmar shares have been rising since the Ukraine-Russia war, as it may hit India's sunflower imports,” said Manoj Dalmia, founder and director of Proficient Equities.
Should You Buy Adani Wilmar After A Strong Rally?
Adani Wilmar can go up to Rs 550 mark in the near term, Ravi Singh, head of research and vice president at Share India said.
“Adani Wilmar backed by strong fundamentals and technical support, aims to touch the level of 550 in near term from current levels. All the momentum indicators like relative strength index (RSI), moving averages convergence divergence (MACD) oscillators and MAS are supporting the bull run on a daily basis. The company’s recent bet on staples and scouting for acquisition of regional rice brands and processing units in several states of the country, has added more fuel to the rise,” Singh added.
However, Dalmia advises buying the stock on a dip as current levels are not prudent for buying the stock.
“The share was locked yesterday at 10 per cent upper circuit. Current levels are not advisable for buying, it is better that one waits for a retracement at Rs 405 if defensive or Rs 456 levels for aggressive investor," Dalmia said.