Jefferies Maintains ‘Buy’ Rating on PI Industries Despite Valuation Adjustment, Sets Revised Target at Rs 4,120


In a recent update, Jefferies affirms its ‘Buy’ recommendation for PI Industries, albeit with a revised target price of Rs 4,120 per share, citing valuation concerns. While the target price has been adjusted, Jefferies expresses ongoing optimism about the company’s future, emphasizing key growth drivers and strategies outlined by the agrochemical innovator.

PI Industries, recognized for its innovation in the agrochemical sector, has articulated a commitment to volume-driven growth for its key product in the fiscal year 2024. This commitment comes alongside a strategic price reduction initiative aimed at safeguarding market share. Importantly, the company anticipates that any reduction in the product’s price will not lead to erosion, highlighting that the artificial intelligence (AI) cost constitutes only a fraction of the final retail price.

Analysts at Jefferies commend PI Industries’ proactive stance in maintaining market share through volume-driven growth, resonating positively with the market. The strong growth visibility provided by committed volumes in fiscal year 2025 contributes to the overall positive outlook on PI Industries.

Despite adjusting its earnings per share (EPS) estimates for fiscal years 2024 and 2025 due to short-term destocking, Jefferies projects a robust 12% EPS growth in fiscal year 2025, showcasing confidence in the company’s trajectory.

Jefferies finds the current valuation of PI Industries reasonable, standing at 29 times the estimated earnings per share for fiscal year 2025. This valuation assessment implies that, despite the revised target price, PI Industries remains an attractive investment opportunity.

Market response to Jefferies’ update has been keenly observed, with shares of PI Industries demonstrating resilience in the face of valuation concerns. In intra-day trade, the stock has exhibited a gain of more than 1%, indicating positive sentiment among investors aligned with Jefferies’ ‘Buy’ recommendation on PI Industries. As the company continues to navigate market dynamics and implement growth strategies, the outlook remains favorable.

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