PI Industries Ltd., a pesticides and agrochemicals producer, has received share price target cuts from multinational brokerage firms Jefferies and Citi after weak earnings. The company reported all-round weakness in revenues and negative operating leverage in the third quarter and expects sequential improvement henceforth.
Besides the fall in revenue, CSM (Custom Synthesis and Manufacturing) exports declined 32%, volumes declined 29% while price fell too. Domestic revenues were 12% below estimates, amid lower farmer demand and erratic rainfall that impacted key crops. Pharma revenues declined 6%.
PI Industries Q3 Results (Consolidated, YoY)
- Revenue down 28% at Rs 1,376 crore vs Rs 1,901 crore
- Ebitda down 41% at Rs 302 crore vs Rs 512 crore
- Margin at 22% Vs 26.9%
- Net Profit down 16.5% at Rs 311 crore vs Rs 373 crore
Citi has issued a double downgrade on the stock after Q3 performance was below expectations, and the outlook for FY26 appeared weak due to subdued guidance from Kumiai, a joint venture with Japan's Kumiai Chemical Industry Co., along with price cuts in Pyroxasulfone. Kumiai has guided for a decline in sales of Axeev (pyroxasulfone) for the period from November 2025 to October 2026, further reducing visibility on future growth.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Analysts at Jefferies said visibility on growth recovery in PI's CSM business remains is "clouded". A weak base in FY26 and a gradual ramp-up in new molecules are expected to support recovery only in FY27.
As a result, the firm has cut its FY26 and FY27 revenue estimates by 11% and 14%, respectively, which also leads to a reduction in FY26/27 EPS estimates by 11% and 22%. Despite these near-term challenges, Jefferies projects a 13% adjusted net profit CAGR over FY26–28.
Target Price Action
- Citi: Downgrade to 'Sell' from 'Buy'; target price cut to Rs 2,675 from Rs 4,150
- Jefferies: Maintain 'Buy' with revised target price cut to Rs 3,675 from Rs 4,182
- Bloomberg analysts' consensus: Nine each for buy, sell and hold. Average TP of Rs 3,588, indicating 14% upside potential.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
