Shares of NACL Industries have been the standout, soaring nearly 294% in six months and 58% in the past three months. The gains here have been partly driven by the stake sale to Coromandel International. Dharmaj Crop Guard has also gained 81% over six months, while Heranba Industries, Sharda Cropchem, and Rallis India have delivered 20-69% returns. The BSE mid-cap and small-cap indices have gained 1.37% and 0.88% over the past 3 months, and 18.33% and 23.95% over the past 6 months, respectively.
The rally has been underpinned by a favourable monsoon, higher minimum support prices, and resilient demand for crops such as cotton, maize, oilseeds, and millets.
“Export markets have also shown signs of recovery after two years of weakness, further aiding sentiment,” said Saurav Chaube, research analyst at Samco Securities.
Demand has been robust, supported by June rainfall at 109% of the long-period average (LPA). The kharif sowing area stood at 995.6 lakh hectares, up 38.48 lakh hectares year-on-year. Higher minimum support prices (MSPs) for 14 crops, including a ₹69 increase in paddy to ₹2,369 per quintal, have further boosted farm cash flows. The larger cropped area and better liquidity are expected to drive higher demand for herbicides, insecticides, and pesticides in the near term.
Agro-pesticide companies delivered robust Q1 FY26 results, with revenues rising 20% on average across the industry, according to Chaube.Some analysts are not convinced that the current pace can continue. Historically, the sector has grown at 5-6% annually, and analysts caution against chasing momentum.”The exceptional run of the past six months is unlikely to persist at the same intensity. Investors are advised to remain cautious and wait for the right price to buy industry leaders,” said Chaube.
Money managers said investors must watch out for potential risks. “Key risks to monitor will be rainfall dispersion into September-October, China molecule policy, and any raw-material or freight spikes,” said Karthick Jonagadla, investment manager on smallcase and founder at Quantace Research.
Among listed players, Rallis India and Sharda Cropchem remain leaders and are seen as relatively safer long-term bets for those already invested. New investors, however, may want to wait for more reasonable entry points that provide some margin of safety, according to Chaube.
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