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On Tuesday, ICICI Securities analyst Manoj Menon upgraded Adani Wilmar (NSE:ADAW) Ltd (AWLTD:IN) from a Hold to a Buy rating, maintaining a price target of INR 360.00. The upgrade was prompted by the company's impressive third-quarter financial year 2025 results, which showcased a 31% year-over-year revenue growth. This increase was largely attributed to a 26% rise in realisation growth, bolstered by one-time gains from the hike in edible oil import duty.
Adani Wilmar reported a 5% growth in overall volumes, with edible oil and food segments growing by 4% and 22% year-over-year, respectively. However, there was a sequential slowdown due to consumer downtrading. Despite this, the company's profitability saw a significant boost, with the quarter witnessing the highest EBITDA margins to date at 4.7%. This improvement in margins was partly due to the utilization of lower-priced inventory.
The company's strategic focus on expanding its numeric distribution is anticipated to further propel its growth trajectory. ICICI Securities highlighted the continued strong performance of Adani Wilmar's domestic foods segment, which is a critical factor in mitigating the volatility of the edible oil business. The management's plan to increase the volume salience of foods from approximately 17% to around 30% is also seen as a positive move.
The analyst noted that while the edible oil business seems to have reached peak margins, the overall positive outlook and robust performance in the foods segment justify the upgrade in stock rating. ICICI Securities maintains a price target of INR 360, indicating confidence in Adani Wilmar's continued growth and profitability.
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