Due to strong volumes, shares of agrochemicals and pesticides, which include fertilizers, saw a surge of up to 12% on the BSE during intraday trading on Tuesday. The purchasing at these stocks has been ascribed to a favorable business outlook, as the improvement in monsoon activities has led to a continued optimistic attitude for the home market.
Insecticides (India), Deepak Fertilizers & Petrochemicals Corporation, UPL, and Rallis India, all had increases of four to twelve percent. The Indian Meteorological Department (IMD) has predicted above-average rainfall from June to September. It is anticipated to improve the likelihood of an abundant crop yield.
With a consistent 4% annual growth, the Indian agrochemicals market is predicted to rise from $8.22 billion in 2024 to $13.08 billion by 2029. The sector is driven by a number of important variables, including changing food trends, population expansion that is occurring quickly, changing weather patterns, a rise in the frequency of natural catastrophes, and favorable technical improvements.
Rallis India, one of the individual stocks, gained 12 percent and reached a new high of Rs 373 thanks to a threefold increase in average traded volumes. The stock rose over its previous peak, which was reached on July 16, 2024, at Rs 357.20. As a division of Tata Chemicals, Rallis India is a member of the Tata Group. With over 75 years of expertise providing the most extensive range of products and solutions for Indian farmers, the firm is among the top agriscience companies in India. It caters to rural markets.
Rallis is dedicated to adjusting to changing markets and has a positive view for the Indian agriculture sector. With a broad market reach and a portfolio that includes crop nutrition, crop protection, and better seeds, Rallis seeks to meet the changing demands of the Indian farming community. Because of the strong forecast for the local industry and the cautiously hopeful view for the foreign business, analysts at Elara Capital are still confident about the prospects for the Rallis crop care division.
The brokerage company maintains its 'Accumulate' recommendation and has raised its target price to Rs 380 from Rs 305 based on a revised FY26E target P/E of 28x (from 22x). Analysts believe that the above-average monsoon and the confidence it inspires would lead to solid profits growth in India's agriculture ecosystem. This may push valuation multiples over the historical norm, especially given the strength of the stock markets.
Insecticides (India) shares jumped 10% during intraday trading on the BSE, reaching a 52-week high of Rs 884.70. On August 16, 2022, the stock reached a record high of Rs 1,094.95. In FY24, the business launched eight new items that drove innovation and value while generating revenue of Rs 51 crore and demonstrating broader product acceptability. In FY25, the firm plans to introduce at least 7-8 novel products.
