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Rallis, RCF, Deepak Fertilisers rally up to 9%; what's driving agri stocks?
Shares of agri related companies like Rallis India, Rashtriya Chemicals and Fertilizers (RCF), Deepak Fertilisers & Petrochemicals Corporation, Paradeep Phosphates and Sharda Cropchem rallied up to 9 per cent on the BSE in Tuesday's intra-day trade after Rallis India reported healthy June quarter (Q1FY26) earnings.
Rallis India hit a 52-week high of ₹385.60 on the back of heavy volumes. A combined 16.66 million equity shares changed hands at the counter on the NSE and BSE.
Shares of Deepak Fertilisers surged 6 per cent to ₹1,658, followed by RCF (5 per cent to ₹159), Paradeep Phosphates (4 per cent at ₹177.80) and Sharda Cropchem (4 per cent at ₹814.50). UPL, PI Industries and Coromandel International were trading higher in the range of 1 per cent to 3 per cent. In comparison, the BSE Sensex was up 0.14 per cent at 82,368 at 10:28 AM.
Rallis India Q1 results
Rallis India for the April-June 2025 quarter (Q1FY26) reported revenue of ₹957 crore, up 22 per cent year-on-year (YoY), led by volume led growth in both crop care and seeds businesses. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 56.3 per cent at ₹150 crore, while margins came at 15.7 per cent, (up by ~300 bps YoY), driven by volume led growth and moderated fixed cost. Profit after tax stood at ₹95 crore in Q1FY26 as compared to ₹48 crore in Q1FY25.
The management has attributed strong performance during the quarter to an early onset of monsoon in the domestic market and recovery in volumes in few products. The growth was indeed driven by volumes thus nullifying the lower GPM impact (lowest in the last 9 quarters). The management remains cautiously optimistic about the coming quarters for the domestic market and gradual recovery in the exports market.
Agri - Industry overview
With a growing consumer base, the agri-inputs sector stands poised to benefit from a shift towards more efficient, sustainable practices. Opportunities remain abound in developing advanced fertilizers, bio-based solutions and precision agriculture technologies that can increase crop yields while reducing environmental impact.
The Asia-Pacific (APAC) crop protection market is expected to grow from $15.5 billion in 2024 to $18.8 billion by 2029, contributing 25.2 per cent to the global market's incremental growth during this period. The region's large and growing population is driving agricultural intensification. This increases the need for effective crop protection solutions to improve yields, said Sharda Cropchem said in its FY25 annual report.
Meanwhile, according to Elara Capital, agrochemicals companies, domestic-dependent as well as exports-driven, are likely to see healthy volume growth. Domestic branded companies' top-line growth would be driven by robust placement, due to expectations of normal Monsoon driving healthy agrochemicals demand. If the timing and distribution of Monsoon is favorable, the industry is likely to see sharp consumption growth at the farm level. On the exports side, with destocking largely over globally, fresh demand is driving growth in the international business for our coverage universe.
'Tactically, for the quarter, we prefer domestic agrochemical companies, as we believe, domestic agrochemicals demand can see a significant upswing if the timing and distribution of Monsoon is in balance. Fertilizer companies have seen a healthy run-up in the stock price in the range of 10 per cent-35 per cent in the past three months, and have yet to factor in near-term risk, due to rising raw material prices, in our view,' the brokerage firm said in sector quarterly preview.
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