Tata Group Stock: Why did Rallis India jump 17% today?

Synopsis: Rallis India shares surged 17% after HSBC upgraded the stock to ‘Buy’ with a Rs 300 target, citing strong 3QFY26 performance, improving business transformation across seeds and exports, and attractive valuation after a sharp correction.

This company, which is a Tata Group company and is into the manufacturing of agrochemicals, is present across the value chain of agriculture inputs – from seeds to organic plant growth nutrients – and had its shares in momentum today after one of the world’s largest banking and financial services organisations, HSBC, upgraded the target price for the company.

With the market cap of Rs 5,184 crore, the shares of Rallis India Ltd gained about 17% and made a high at Rs 273.80, compared to its previous day closing price of Rs 234.95 and are trading at a PE of 28, whereas its industry PE is at 25.5. The shares have given an all-time return of over 1200% since their listing in March 1996.

HSBC on Rallis India ltd

HSBC has upgraded Rallis India to ‘Buy’ with a target price of Rs 300 post the company delivering decent performance in 3QFY26, wherein adjusted PAT came ahead of estimates, underpinned by better-than-expected execution across all business segments despite challenging industry conditions. 

According to the brokerage, the company’s ongoing restructuring is now reflecting beyond domestic crop protection, with visible improvement in seeds and export businesses, both witnessing a revival. The stock has also corrected sharply by around 35% over the last six months, and when combined with improving earnings visibility and operational efficiency, the current valuation presents an attractive entry point for investors.

From a valuation viewpoint, the HSBC target of Rs 300 implies an upside of almost 28% from the previous closing price of Rs 234.95. The expected re-rating has been estimated on the premise that Rallis can continue with its margin expansion and revenue growth across segments, especially in high-growth segments such as seeds and exports. 

Since earnings recovery is already available for all to see, and the downside risks have largely been priced in, given the sharp correction, HSBC believes the stock presents a good risk-reward proposition in the medium term, making Rallis a turnaround play within the agri-inputs space.

What helped the share price surge? 

The revenue from operations for the company stood at Rs 623 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 522 crores, up by about 19 per cent YoY. However, the net profit stood at Rs 2 crore in Q3 FY26, down compared to the Rs 11 crore profit in Q3 FY25.

The stock fell yesterday based on the fall in its PAT due to a Rs 40 crore labour code-related expense and Rs 5 crore from profit, which created a previous high base of profit in the previous quarter due to income from the sale of certain assets. 

The fall in the share price yesterday, along with the HSBC target hike, created a strong upside momentum in the shares, and hence we could see the sudden share price surge of 17%. 

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