Pricing Pressure to Impact Agri-Chemicals Growth
Jefferies has stated that crop protection innovators are heading into another year of muted growth in 2026, with pricing pressure persisting despite improving volumes. 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. This has resulted in crop prices recovering 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.
Factors Affecting Farm Economics and Chemical Pricing
At the same time, farm input costs remain elevated, keeping pressure on farm economics and chemical pricing. The refrigerant gas export market, however, 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.
For more information on the agri-chemicals industry, including trends and forecasts, visit our website. You can also find detailed analysis of the Indian chemical companies and their performance in the market.
Stock Picks by Jefferies
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. To learn more about PI Industries stock analysis and its prospects, visit our website.
SRF Faces Limited Visibility on Recovery
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.
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Conclusion
In conclusion, the agri-chemicals sector is expected to face pricing pressure in 2026, despite improving volumes. However, refrigerant gas exports remain a bright spot for Indian chemical companies. Investors should keep a close eye on the sector and consider the stock picks by Jefferies, including Navin Fluroune and PI Industries.