Jefferies Issues Cautious Outlook on Indian Chemical Sector; Favors Pi Industries and Navin Fluorine

Jefferies have released its latest sectoral update on Indian chemical stocks, delivery a mixed outlook as the industry continues to grapple without demand demand trends and intensifying global present. While The Brokerage Remains Cutious on the Near-Term Prospects of the sector, it has identified selective options for investors, recommending a “boy” Retaining an “underperform” rating on srf.

According to jeferies, the global agrochemical landscape remains under stress. Major Innovators in the segment are Forecasting Flat Revenue Growth in 2025, While Pricing Pressure in Key Markets Like Latin America personals. Additional, Elevated Chinese Exports Are Creacing A Supply Glut, Intensifying Competitive Pressure across global markets. Crop Prisis, Meanwhile, Remain Volatile and Have Failed to Offer Any Significant Boost to Sentiment.

The Refrigerant gas (refgas) segment, another key sub-sector, also displayed weight, with demand larger flat on a year-on-or-yaar basis during the march 2025 Quarter. This indicates a broader slowdown in Industrial Consumption Trends that is weighting on the performance of Several Chemical Players.

Pi Industries: long-term upside amid short-term headwinds

Despite the overall softness, jefferies have expressed optimism on pi industries, assigning the stock a “boy” rating with a price target of 4,200, suggesting a potential UPSIDE of 9 Percent. The Brokerage Acknowledged Short-Term Headwinds in Pi’s Custom Synthesis Manufacturing (CSM) Portfolio and a Slower-That-Expected Ramp-up in its PHARMA SATICAL. However, it noted that traction in newly commercialized products and biologics offers long-term potential. Valuation-Wise, The Stock Currently Trades One Standard Deviation Below its history average, presenting whatsenting, what jeferies calls an “Attractive entry point” for long-tree investors.

Navin Fluorine: Earnings Visibility from New Product Launches

Navin Fluorine also finds a place in jefferies’ Buy List, Backed by Earnings Visibility from New Product Launches in Agrochemicals and Contract Development and Contract Development Organization Segments. The brokerage sees a promising outlook post the March Quarter, Especially with the Recent Long-Term Contract Signed with Global Major Chemors. While Near-Term Earnings Estimates Remain Unchanged, Jeferies Expects a Robust Compounded Annual Growth Rate (Cagr) of 35 percent in EPS Between Fy2025 and Fy2027. Its target price for navin fluorine stands at 5,280, Implying a 23 Percent UPSIDE.

SRF: Valuation Concerns Offset Volume Recovery

On the other end of the spectrum, jefferies have reiterated its “underperform” stance on srf, assigning a target price of 2,336. While the company has seen a modest recovery in chemical volumes due to front-loaded us imports, jeferies remains skeptical of a sustained cyclic upturn. It also highlighted Valuation Concerns, with the Stock Trading Close to Two Standard Deviles Above Its long-term average-a Level the brokerage deems unattractive in the currency unattractive in the current environment Visibility.

Overall, Jefferies’ Latest Update UndersCores the Complex Dynamics Facing Indian Chemical Stocks. While the sector as a whole faces Near-Term Headwinds from Global Supply Pressures and Sluggish Demand, Select Companies Like Pi Industries and Navin Fluorine Stand out for their innovation pipelinee, Earnings Visibility, and Attractive Valuations. However, jefferies cautions that investors should remove remain discerning, especially in high-Valuation names like srf, where the risk-Reward Profile Remains SKEWED AMID UNCERTAIN Recovery Timelines.

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