📈 How is Adani Group Beating the Markets?
The Ambani-Adani rivalry is heating up once again as the Adani Group grows stronger. But can it overtake Reliance?
The Ambani-Adani rivalry is now getting even more interesting (You can read about the rivalry in detail here).
The Adani Group reached a market cap of $200.18 billion (on 7 April).
It is the third Indian company to join the exclusive $200 billion market cap club which so far only had Tata Group ($320 billion) and Reliance ($237 billion) as members.
This new development comes as the stocks of all of Adani Group's firms are sky-high.
The stocks of 5 out of its 7 firms were even trading at their 52-week highs before they fell by around 2-6%.
But why had Adani Group shares been soaring?
Fortune Favouring Adani?
Let's begin our discussion with the stock that has gained the most in recent days: Adani Wilmar.
The stock has hit the upper circuit1 for five straight days this week.
But what has brought on this sudden rise in the stock which just debuted on the market this February?
The war.
Yes, the Russia-Ukraine war is one of the major reasons behind Adani Wilmar's rise.
You see, Russia and Ukraine are two of the major suppliers of sunflower oil. Together, they exported 73% of the world's sunflower oil.
But because of the war, these supplies have been interrupted, causing edible oil prices to rise.
Adding fuel to this fire, Indonesia, the world's largest producer and exporter of palm oil, had to curb its exports to maintain its domestic supply.
If that wasn't enough, our mustard crop has also been impacted by hail storms.
But, thankfully, Adani Wilmar already has a two-month stock of these oils.
With prices rising, the company will get a good margin. So, profits are expected to go up.
And as oil prices are set to remain high for the time being, many investors believe that this will be a great year for Adani Wilmar.
But won't Adani Wilmar face shortages? Well, its position as one of the top importers of edible oil ensures that it will continue to receive oil supplies even when other Indian suppliers may not get them. After all, exporters don't want to anger their biggest customer.
Secondly, Adani Wilmar's co-owner, the Wilmar Group, is one of the biggest traders of palm oil.
What's more, the company has also been acquiring local wheat flour and rice brands.
This move could not only increase Adani Wilmar's presence on Indian kitchen shelves but also take it international.
Wheat supplies from Russia and Ukraine, which are the two of the biggest exporters of wheat, have been impacting several countries.
Here's where Adani Wilmar could step in and increase exports.Â
So, the company's future seems extremely bright.
In fact, even before the war hit, Adani Wilmar's quarterly revenue for December 2021 (Rs. 14,379 crores) was already higher than that of HUL (Rs. 13,439 crores).
It could soon dethrone HUL as India's topmost FMCG brand.
But what about the other Adani companies? Let’s take a closer lookÂ
Adani Port: Adani Port has recently achieved a historic milestone of over 300 million tonnes of cargo, outperforming all Indian cargo volume growth. And if Adani Wilmar does start exporting wheat and rice any time soon, its trading volume will increase further.
Adani Power: With temperatures soaring in India in just March itself, people are expecting that our power consumption will go up massively. In March itself, our power consumption rose by 4.6% year-on-year. So, investors are betting big on Adani Power. Plus, the company recently received unpaid dues worth Rs. 3,038 crores from Rajasthan's power distribution companies. So, it is also on a roll.
Adani Enterprises: Last month, the company announced that it would be spending Rs. 55,000 crores on building roads, and airports and developing green hydrogen. And since the government is also promoting growth in these sectors, investors are banking on Adani Enterprises to grow further.
Adani Total Gas: The company recently opened its first EV charging station in Ahmedabad, marking an entry into one of the most sought-after sectors in the world right now. It plans to open many more charging stations across India soon.
The Adani Group as a whole is making huge moves. Which is why Gautam Adani's wealth grew the most last year, beating even Elon Musk and Jeff Bezos' wealth gains.
Though Adani Group stocks did decline on April 7 around 1:20 pm, this could either be because people were selling stocks at highs to make profits or because of a general downtrend in the market that saw several stocks falling.
Now, the question is will Adani Group be able to take on Reliance Industries? Or will Reliance with its multiple acquisitions leave Adani behind?
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Stock prices are carefully monitored by the stock exchange and cannot rise or fall beyond a certain level. Upper circuit is the highest price a stock can reach on a particular day