Agrochemical stocks rally; Bayer Crop hits new high, Dhanuka Agri soars 17%

UPL, Rallis India and Sumitomo Chemical India were up 5 per cent each on the BSE.

Shares of agrochemical manufacturers were on a roll, with Bayer Cropscience (up 7 per cent at Rs 5,356) and Coromandel International (up 8 per cent at Rs 700) hitting their respective all-time highs in the intra-day trade on Wednesday after reporting strong results for the quarter ended March 2020 (Q4FY20).

Dhanuka Agritech touched a 52-week high of Rs 578, rallying 17 per cent on the BSE today. Besides, UPL, Rallis India and Sumitomo Chemical India were up 5 per cent each, as compared to a 2.6 per cent rise in the S&P BSE Sensex at 02:17 pm.

Last week, most of these stocks were under pressure after the government issued a draft notification to ban import, manufacture, sale, distribution and use of 27 generic agrochemicals on the grounds that these are restricted or banned in other countries.

Analyst at Emkay Global believe that any ban on major molecules would be spread over a few years and will give the industry time to adjust. Also, the industry could appeal in courts against any proposed ban and go down the litigation route, it added.

Meanwhile, companies that have announced their January-March quarter earnings so far have reported strong operational performance. The management of Bayer CropScience said a good monsoon in 2019 ensured sufficient water reserves for Rabi sowing. "This coupled with stable commodity prices, favorable climate and strong portfolio performance in corn and horticulture, helped us achieve strong growth in Q4", they said.

The stock of Bayer Cropscience hit a new high of Rs 5,365. It has rallied 20 per cent in the past two trading days, after the company reported profit before exceptional items and tax (PBET) of Rs 54.3 crore in Q4FY20, on the back of strong operational performance. It had posted a loss before exceptional items and tax of Rs 95 crore in the corresponding quarter of the previous year.

Bayer CropScience has entered the list of top 100 most-valued companies by market capitalisation following a sharp run-up in its share price. The company is at number 100th in the overall ranking with m-cap of Rs 23,909 crore, ahead of Jubilant FoodWorks, which has m-cap of Rs 22,369 crore, the BSE data shows.