This beaten down Ashish Kacholia-owned stock has zoomed 65% in 3 days

Shares of Best Agrolife continued their upward movement for a third straight day on Wednesday, surging 16 per cent to Rs 756.50 on the BSE in intraday trade, amid heavy volumes.

In the past three trading days, the stock of the company, engaged in the business of trading agro based products, has zoomed 65 per cent from a level of Rs 458.10. Pior to this, the stock price of the company had more than halved, tanking 67 per cent, from its 52-week high level of Rs 1,374 touched on August 1, 2023. It had hit a 52-week low of Rs 453.75 on March 28, 2024. 

At 11:31 am, Best Agrolife was trading 4.4 per cent higher at Rs 683 on the back of nearly two-fold jump in average trading volumes. As many as 352,000 shares have already changed hands on the BSE. On an average, around 180,000 shares traded on the counter over the past two weeks, exchange data shows.

As on December 31, 2023, ace investor Ashish Kacholia owned 321,002 shares, or 1.36 per cent stake, in Best Agrolife, shareholding pattern data shows.

In notes to accounts for the December quarter, Best Agrolife said that the during the quarter ended September 30, 2023, the lncome Tax Department conducted a search and seizure operation at the head office of the company along with other premises of the company subsidiaries and residence of certain key managerial personnel from September 26, 2023 to September 39, 2023. List of assets seized by the authorities included loose documents, hardrives, laptops etc.

"The company has provided necessary support, co-operation, and documents as requested by the Department during the search and seizure operation As on date, the company/ Group has not received any notices or summons from the department in this regard," it said.

Meanwhile, for Q3FY24, Best Agrolife reported a net loss of Rs 6.61 crore due to higher raw material cost. The company had posted a net profit of Rs 30.61 crore in Q3FY23.

The company is engaged in the trading of agrochemical products such as insecticides, pesticides, herbicides, fungicides and plant nutrients. The company’s crop protection chemical products are sold through distributors and co-marketing alliances with leading Indian companies throughout the country.

On October 23, 2023, the ratings assigned to the bank facilities of Best Agrolife had been placed on rating watch with negative implications by CARE Ratings in view of the income tax search operation being conducted at various premises of the group.

The rating agency had said it would await further developments and clarity to emerge in this matter in order to accurately evaluate the potential repercussions of the aforementioned income tax search on the credit profile of the company.

"The revision in ratings assigned to the bank facilities of BAL factors in the elevated debt levels which is expected to increase further owing to ongoing brownfield capex for expansion, higher reliance on external debt for working capital needs with full limit utilization in some banks in the recent past which also led to overdrawn working capital limits in the group by 5 days due to month-end interest levy and the operational disruption caused by the income tax raid," it had said.

The ratings are also constrained by exposure to agro-climatic conditions and the highly competitive nature of the agro-chemicals industry. The ratings, however, draw strength from the company's consistent growth in scale of operations and improvement in profitability margins with increased focus on specialized products as compared to generic products, CARE Ratings had added.