Chemical company Rallis India Ltd, traded on National Stock Exchange as ‘NSE: RALLIS’ gained more than 12% on 7th of March.
Rallis started the day with an opening price of ₹255 and marked the day’s high of ₹294 by 2:30 PM. Later, the stock closed at higher end, closing above an important previous resistance.
Earlier this year, Rallis was trading at an average price of ₹240 per share and rose by over 20% in the last two months.
About Rallis
Established in 1948, Rallis India is headquartered in Mumbai. Their main business involves manufacturing of Insecticides, Fungicides , Agro chemicals and polymer products.
Rallis also has a division of seeds where they produce hybrid seeds for millets. The company has its supply in domestic as well some international markets too.
Company’s major business is mainly related to agrochemicals where Rallis have over 60 years of experience and R&D facilities spread across India.
Tata Group’s chemical division ‘Tata Chemical’, who are also Rallis’s promoters have above 55% stake in the company.
Foreign Institutional Investors are buying Rallis
Last quarter, Rallis performed very strongly with its annual sales being the highest in the last ten years. In 2023, the company reported an increase of 13.9% in its sales compared to the previous year.
Improvement in sales performance might be the reason behind increase in FII’s shareholding in the company. Foreign investors have increased their holdings from 7% in 2022 to 9.21% by the end of 2023, an increase of 2.2%.
Is Tata's presence causing a rise in Rallis share price?
Chemical sector in India has generally underperformed in the last three years. In the previous year, while the Nifty index saw a return of 45%, the Rallis achieved 43%, and the chemical industry was at a return of only 17.4%.
I do not say that an annual return of 17.4% is bad in any way, however, when the entire market was bullish, and sensex was touching all time high each month, performance of chemical sector was subdued
Like Rallis, various other chemical stocks have now broken out of the consolidation zone which they were experiencing since the last four years. UPL Ltd is trading at a strong support zone, whereas Rallis Ltd has broken out of the triangle technical pattern, which is the reason behind strong move in rally since last 2 months.
Investor’s strong belief in Tata Group is surely helping Rallis perform better than some of its peers, however sectoral rotation and strong technicals is what is causing the recent rise in the company.
Rallis Positional Swing Trading forecast
| Rallis Swing Trading Forecast Levels | Taqrget Price (in ₹) |
|---|---|
| Target 1 | ₹302 |
| Target 2 | ₹330 |
| Target 3 | ₹350 |
| Target 4 | ₹370 |
Rallis vs Nifty's returns compared
| Period | RALLIS Return (%) | Market Return (%) |
|---|---|---|
| 7 Day | 13.7 | 1.2 |
| 30 Day | 9.0 | 1.4 |
| 1 Year | 45.4 - 43.5 | 48.5 - 45.6 |
| 3 Year | 12.4 - 8.3 | 81.6 - 72.2 |
| 5 Year | 90.4 - 78.6 | 140.8 - 119.6 |
Final Words
Rallis will definitely benefit from strong technical performance and seasonal tendency of the chemical sector. After almost three years, the company was able to close above 0.236 Gann Level and made a new higher high.
This change of trend in Rallis is expected to further continue as plantation season in India is around the corner. The demand for their pesticides and other agro chemical products will increase in early March which is why the company’s price is on rise.
