Jefferies notes that global agrochemical innovators are guiding for flat revenue growth in 2025, with pricing pressure persisting in Latin America. Chinese agrochemical exports remain elevated, intensifying competitive pressures, while crop prices stay mixed, dampening sentiment in the sector.
Additionally, the refrigerant gas (refgas) market remained flat year-on-year in the March quarter, reflecting subdued demand trends.
Among the key stock picks, Jefferies has highlighted PI Industries and Navin Fluorine as its preferred bets, while retaining its “underperform” rating on SRF.
The brokerage has a “buy” recommendation on PI Industries with a price target of ₹4,200. The price target implies a potential upside of 14% from Monday’s closing levels.
PI Industries is facing a peak-out in key Custom Synthesis (CSM) products and a slower-than-expected ramp-up in the pharma segment. However, newly commercialized products and biologics are gaining traction, according to Jefferies.
With the stock currently trading at 1 standard deviation below its long-term average, Jefferies sees an attractive entry point for long-term investors.
The other stock that Jefferies is bullish on, is Navin Fluorine, due to earnings visibility from new product startups in agrochemicals and CDMO from the March quarter onwards.
The new long-term contract with Chemours adds upside optionality, though current earnings estimates remain unchanged, Jefferies noted, adding that despite the broader demand uncertainty, it is expecting the company’s Earnings Per Share to grow at a Compounded Annual Growth Rate (CAGR) of 35% over the financial year 2025-2027.
It has a “buy” recommendation on Navin Flourine with a price target of ₹5,280, implying a potential upside of 24% from Monday’s close.
On the flip side, Jefferies has an “underperform” rating on SRF with a price target of ₹2,336 as it remains cautious on the stock despite a year-end recovery in chemical volumes—driven by front-loaded US imports.
However, with the stock trading near +2 SD on long-term valuation averages, Jefferies finds the risk-reward unattractive, especially amid limited visibility of a sharp cyclical upturn.
Shares of both Navin Fluorine and SRF have declined 5% each in the last month, while those of PI Industries are up 1% during the same period.
