Pricing Pressure To Cap Agri-Chemicals Growth Despite Volume Growth Says Jefferies — Check Stock Picks

Jefferies says crop protection innovators are heading into another year of muted growth in 2026, with pricing pressure persisting despite improving volumes, while refrigerant gas exports remain a rare bright spot for Indian chemical companies.

The brokerage notes that innovators are guiding for 0–2% revenue growth in 2026, as mid-single-digit volume growth is offset by continued pricing pressure led by aggressive Chinese supplies. Chinese crop-protection export volumes are up 16%, with prices still near nine-year lows.

Crop prices recovered towards the end of CY25 on expectations of a US–China trade deal and tighter supplies. In CY25, wheat, corn and soybean prices are down 3%, up 1% and up 11%, respectively. At the same time, farm input costs remain elevated, keeping pressure on farm economics and chemical pricing.

The refrigerant gas export market remains strong. India’s HFC export volumes from SRF and Navin Fluorine rose 53% in the first three quarters, supported by US production cuts and adoption of new-generation refrigerants. Jefferies expects refgas prices to remain firm on strong demand from the US and China.

Navin Fluroune is Jefferies’ top pick, supported by broad-based growth across specialty chemicals, pharma CDMO and refgas. The company's three quarters worth exports rose 65% annually, with all three segments contributing.

A promising prospect pipeline is expected to drive 24% earnings CAGR over FY26–28, while a net debt to Ebitda of 0.4x in FY26 leaves the balance sheet well funded for growth capex, says the brokerage. Jefferies also sees a likelihood of near-term earnings upgrades and reiterates a 'buy' with a target price of Rs 6,940.

PI Industries is expected to see growth resume in FY27 after going through an earnings downgrade cycle in CY25 due to weakness in key products and regulatory delays in biologicals. With key product exports stabilising in the second half, a soft base and new product growth should support recovery in FY27, says the brokerage. The stock trades more than one standard deviation below its long-term average valuation. Jefferies retains a 'buy' with a target price of Rs 4,180.

SRF faces limited visibility on recovery, despite having outperformed the Nifty by 29% in 2025 on stronger refgas volumes and pricing. Specialty chemical exports declined 3% in the first three quarters, while crop-protection innovator growth remains weak and refgas capacity was fully utilised in CY25, limiting incremental volume growth.

Jefferies is 9% below consensus on FY27 Ebitda, and with the stock trading one standard deviation above its long-term average forward PE, the risk-reward is unattractive, it maintains. The brokerage maintains an 'underperform' rating with a target price of Rs 2,660.