Dolly Khanna portfolio: This agrochem stock zooms 10% on healthy outlook; analyst sees 32% upside

Agri-related stocks have been in focus ahead of Budget 2023 on higher expectations from the government. Ace investor Dolly Khanna backed agrochemical stock – Sharda Cropchem surged more than 13 per cent to touch a day's high level of Rs 515.7 per share on the BSE intraday. 

On Thursday, the stock of pesticides manufacturer zoomed around 10 per cent to close at Rs 500 apiece.  

Chennai-based celebrity investor Dolly Khanna holds 9,18,168 equity shares or more than 1 per cent stakes in Sharda Cropchem, as per the latest BSE shareholding pattern of the company. Khanna is invested in the company since March 2022 and marginally trimmed stakes in September 2022. 

According to the stock analysis website trendlyne.com, Dolly Khanna's portfolio typically leans towards more traditional stocks in manufacturing, textile, chemicals and sugar stocks and she publicly holds 22 stocks with a net worth of over Rs 407.2 crore as of December 29, 2022. 

Earlier last week, rating agency CRISIL Ratings had estimated that the agrochem companies’ revenue to grow in double digits this fiscal and next amid strong balance sheets which would sustain credit profiles led by high capital expenditure and working capital intensity. 

As per Poonam Upadhyay, Director CRISIL Ratings, “Export revenue of agrochemical companies is seen rising 18-20 per cent this fiscal, with the US dollar appreciating around 9 per cent so far and volume growing as global players continue to de-risk their China dependency.” 

In the next fiscal, exports will likely grow 12-14 per cent as players keep up capex with an eye on molecules worth $4 billion going off-patent over the next two years, Upadhyay said, adding that the exports shall be the major contributor to the sector accounting for 53 per cent of the total revenue. 

Similarly, Himanshu Binani of Prabhudas Lilladher said, the domestic agrochemical industry is likely to witness mid to high single-digit growth of 5-8 per cent year-on-year, largely led by price growth in the second half of the current fiscal (2HFY23) amid high base of last year. 

The growth will largely be driven by a strong start to the Rabi season with acreages up 4 per cent YoY; monsoons ending 7 per cent above LPA (long period average), resulting into better soil moisture and water reservoir levels, Binani said, giving a Buy rating on Sharda with a target of Rs 660 apiece (32 per cent upside).