This small-cap agrochemical shares rallied 44% in two days; technical analysts see strong uptrend

Shares of a small-cap agrochemical company have seen a massive upside in a couple of trading sessions. The mentioned stock here is Best Agrolife Ltd. It has zoomed 20 per cent today to hit a high of Rs 659.60. At this price, the scrip has rallied 43.98 per cent in just two days. Despite the mentioned rise, the counter has cracked 51.99 per cent from its one-year high value of Rs 1,374, a level seen on August 1 last year.

The agrochemicals manufacturer has recently announced the acquisition of Sudarshan Farm Chemicals India Pvt Ltd (SFCL). It involves obtaining 100 per cent stake through cash consideration, with an estimated enterprise value (EV) of Rs 139 crore.

"The cash outflow for Best Agrolife will be to the tune of Rs 9.5 crore after considering the net working capital and other liabilities," the company stated.

The firm expects to gain significant synergies with this acquisition in the area of R&D and brand, it added.

Technical analysts largely suggested that the stock looked strong on daily charts. Major support could be seen at Rs 550 level.

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked strong on daily charts. Expected near-term target will be Rs 670. Keep stop loss placed at Rs 640."

AR Ramachandran from Tips2trades said, "Best Agrolife stock price is bullish on daily charts with strong support at Rs 550. A daily close above resistance of Rs 670 could lead to an upside target of Rs 760 in the near term."

The stock saw heavy trading volume on BSE as around 3.42 lakh shares were last seen changing hands. The figure was higher than the two-week average volume of 1.35 lakh shares. Turnover on the counter came at Rs 21.56 crore, commanding a market capitalisation (m-cap) of Rs 1,555.47 crore. There were 29,055 buy calls as against sell orders of 3,802 shares.

As of December 2023, promoters held a 50.10 per cent stake in the company.