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What is the story about?
Shares of Rallis India Ltd. surged as much as 15% on Thursday, January 22, after the stock was upgraded by brokerage firm HSBC following its Q3 earnings performance.
Brokerage firm HSBC upgraded Rallis India to 'Buy' and raised its price target to ₹300 per share, implying an upside potential of about 27% from the previous close.
The brokerage cited an earnings beat in Q3FY26, with adjusted profit after tax coming in ahead of estimates, even as operating conditions remained challenging.
HSBC said the company's ongoing business transformation is beginning to reflect beyond the domestic crop protection segment, with early signs of recovery visible in the seeds and exports businesses.
The upgrade also takes into account a sharp 35% correction in the stock over the past six months, alongside better earnings visibility.
In the December quarter, Rallis India's net profit declined 81.8% year-on-year to ₹2 crore from ₹11 crore a year earlier. Revenue increased 19.3% to ₹623 crore from ₹522 crore.
EBITDA climbed 31.8% to ₹58 crore. Operating margin expanded to 9.3% from 8.4% in the year-ago period.
Looking ahead, the company expects the agrichemicals export business to recover, with growth of around 25% on a weak base.
Losses in the seeds business are also expected to narrow, supported by about 28% growth, even as the industry faces a seed shortage.
The domestic agrichemicals business is seen growing at around 5% due to a subdued start to the Rabi season, while the international business, which contributes about 20% to revenue, is expected to outpace domestic growth.
Brokerage firm HSBC upgraded Rallis India to 'Buy' and raised its price target to ₹300 per share, implying an upside potential of about 27% from the previous close.
The brokerage cited an earnings beat in Q3FY26, with adjusted profit after tax coming in ahead of estimates, even as operating conditions remained challenging.
HSBC said the company's ongoing business transformation is beginning to reflect beyond the domestic crop protection segment, with early signs of recovery visible in the seeds and exports businesses.
The upgrade also takes into account a sharp 35% correction in the stock over the past six months, alongside better earnings visibility.
In the December quarter, Rallis India's net profit declined 81.8% year-on-year to ₹2 crore from ₹11 crore a year earlier. Revenue increased 19.3% to ₹623 crore from ₹522 crore.
EBITDA climbed 31.8% to ₹58 crore. Operating margin expanded to 9.3% from 8.4% in the year-ago period.
Looking ahead, the company expects the agrichemicals export business to recover, with growth of around 25% on a weak base.
Losses in the seeds business are also expected to narrow, supported by about 28% growth, even as the industry faces a seed shortage.
The domestic agrichemicals business is seen growing at around 5% due to a subdued start to the Rabi season, while the international business, which contributes about 20% to revenue, is expected to outpace domestic growth.
