Rallis India shares: Nuvama retains 'Reduce' on Tata Group stock despite healthy Q1; check target price

Nuvama Institutional Equities said Tata Group-backed Rallis India Ltd reported a healthy Q1 FY27 performance as revenue rose 6.8 per cent year-on-year (YoY) to Rs 1,020 crore, aided by higher realisation and modest volume growth despite a weak domestic season marked by lower rainfall and lagging sowing.

The domestic brokerage noted that the company's June quarter performance came in better than its expectations, especially as a surprising 15 per cent volume growth in domestic formulations during a subdued sowing season emerged as a positive.

"EBITDA is overstated due to a one-time Rs 35 crore reversal taken in employee costs, adjusting for which EBITDA is in-line with Street's estimates," it added.

However, Nuvama cautioned that the healthy domestic volume growth could have implications for the current quarter.

"Healthy volume growth in the domestic business can have ramifications for sales returns in Q2 FY27, which we fear as progress on sowing appears weak."

The brokerage also said unfavourable pricing of exported active ingredients (AIs) is likely to remain a near-term headwind.

Despite the stronger-than-expected quarterly performance, Nuvama said growth triggers are still lacking and retained its 'Reduce' rating on the stock.

"Our rating, TP and target multiples stay unchanged, valuing Rallis at 15x FY28E EPS with a TP of Rs 216; retain 'REDUCE'. At CMP, the stock trades at 17.3x FY28E EPS," it stated.

"Rallis's 5-year PAT CAGR has been -2 per cent and our assumption of a 16 per cent PAT CAGR over FY26–28E leads to an improvement in RoE of only 250bps to 11.8 per cent in FY28," Nuvama further stated.

Rallis India, a subsidiary of Tata Chemicals and part of the Tata Group conglomerate, operates in the agro-sciences space with one of the most extensive product and solution portfolios for farmers. The company has established marketing alliances with multiple global agrochemical firms. As of June 2026, its promoter, Tata Chemicals, held a 55.04 per cent stake in the company. 

Meanwhile, shares of Rallis India were trading 0.37 per cent lower at Rs 227.50 in Wednesday's trade.