Tata Group stock has a solid start to FY26 but Nuvama sees a 43% downside

Shares of Tata Chemicals’ subsidiary Rallis India Ltd. opened with gains on Wednesday, July 16, following a strong quarterly performance that beat all headline estimates.Brokerage firm Nuvama Institutional Equities has maintained a ‘Reduce’ rating on the stock but raised its price target to ₹202 from ₹182 earlier. However, the new target implies a potential downside of 43% from the stock’s closing levels on Tuesday.
Nuvama said that the stock appears fully priced, with limited upside potential going forward.

The brokerage wrote in its note that Rallis India’s Q1FY26 results reflect a robust start to the Kharif season. Growth was broad-based across its three key segments, Domestic B2C, Domestic & International B2B, and Seeds, with all reporting healthy double-digit growth.
While the placement quarter was strong, the brokerage cautioned about potential liquidation risks in Q2FY26.Nuvama has raised its FY26E and FY27E earnings per share estimates by 6.2% and 6.5%, respectively, and rolled forward its valuation to FY28E.

The brokerage also flagged that while seasonal tailwinds boosted Q1 performance, volume growth may moderate in Q2FY26 if inventories built during the strong sowing season are not fully liquidated.

With most of the nine new product launches being Kharif-focused, margin expansion to the guided 15–20% range could be challenging, especially given the typically weaker Rabi season.

In Q1FY26, Rallis India reported a 22% year-on-year increase in sales, with profit nearly doubling and margins also expanding.

The management remains cautiously optimistic and expects a gradual recovery in export markets in the coming quarters.