Smallcap stock up 18% today! Reason behind rallying Best Agrolife shares

Shares of Best Agrolife Ltd climbed 20 per cent in Thursday's trade as Seedlings India Private Limited, a wholly owned subsidiary of the company, was granted a licence for indigenous manufacturing of Chlorantraniliprole 4.5 per cent, Novaluron 11.5 per cent, and Emamectin Benzoate 1.5 per cent SE by Central Insecticides Board & Registration Committee.

"The above mentioned is a powerful blend that offers exceptional control over a wide array of pests, particularly targeting lepidopteran pests such as shoot and fruit borers, and also proving effective against Coleoptera and Diptera pests. The company will be launching this product under the brand name ‘Namagen'," Best Agrolife told stock exchanges.

Following the development, the stock rose 17.88 per cent to hit a high of Rs 721 on BSE. Best Agrolife shares are up 27 per cent in the past one month. Yet they are down 17 per cent year-to-date.

For the March quarter, Best Agrolife reported a revenue from operations of Rs 135 crore compared with Rs 254 crore in Q4 of FY23, down 46 per cent due to an unexpected seasonal failure in early quarters of FY24 compared against the normal season conditions in the same period last year.

This led to a lower than expected sales coupled with an unexpected increase in the sales returns. In terms of profitability, Q4 FY24 Ebitda recorded a loss of Rs 67 crore against a profit of Rs 7 crore in Q4 FY23. Its Q4 loss came in at Rs 72 crore compared with a loss of Rs 8 crore in Q4 FY23.

These losses were primarily driven by price erosion, unfavorable seasonal conditions and higher OpEx due to investments in the brand building.