Rallis India shares zoom 16% to hit record high levels post Q2 earnings; what's next?

Shares of Rallis India Ltd soared 16.23 per cent in Wednesday's trade to scale their all-time high value of Rs 373.80. The stock was last seen trading 13.96 per cent up at Rs 366.50. At this price, it has gained 44.86 per cent in 2024 so far. The company reported a 19.5 per cent year-on-year (YoY) rise in its net profit for the September 2024 quarter (Q2 FY25). During the quarter under review, net profit climbed to Rs 98 crore as against Rs 82 crore in the year-ago period.

Revenue from operations moved up 11.5 per cent to Rs 928 crore in Q2 FY25 compared to Rs 832 crore in the corresponding period last year. EBITDA (earnings before interest, taxes, depreciation, and amortisation) jumped 24.8 per cent to Rs 166 crore in the September 2024 quarter from Rs 133 crore in the corresponding period of the previous fiscal.

"We had a strong Q2 FY25 performance helped by double-digit growth in the domestic market, both in the crop care and seeds business. Domestic crop care delivered volume-led revenue growth of 11 per cent with prices impacting overall realisation. Seeds revenue was up by 48 per cent due to better Kharif liquidation. International business had volume recovery though prices continue to be a challenge," said Gyanendra Shukla, Managing Director & CEO at Rallis India.

On the stock-specific front, the counter saw high trading volume on BSE as around 3.78 lakh shares changed hands at the time of writing this story. The figure was way more than the two-week average volume of 27,000 shares. Turnover on the counter came at Rs 13.75 crore, commanding a market capitalisation (m-cap) of Rs 7,114.64 crore.

Technically, support on the counter could be seen at Rs 358, followed by Rs 342. And, resistance may be seen in the Rs 375-387 range.

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "Immediate resistance on the counter will be at Rs 375 and a decisive breach can only dictate the next leg of rally. Near-term support will be at Rs 358."

Sebi-registered research analyst AR Ramachandran, said, "Rallis India stock price is bullish but also overbought on daily charts with next resistance at Rs 387. Investors are advised to keep booking profits as a daily close below support of Rs 342 could lead to a downward target of Rs 279 in the near term."

The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 72.85. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a price-to-equity (P/E) ratio of 47.02 against a price-to-book (P/B) value of 3.42. Earnings per share (EPS) stood at 6.84 with a return on equity (RoE) of 7.27.

Rallis India is a subsidiary of Tata Chemicals and a part of the $150-plus billion Tata Group. It is an agro-sciences company with the most comprehensive portfolio of products/solutions for farmers. The company has marketing alliances with several multinational agrochemical companies. As of June 2024, promoters held a 55.08 per cent stake in Rallis.