Today, we recommend two stocks from the Fertilizers & Agrochemicals sector, by the Trade Brains Portal, to buy for an upside potential of more than 18%. We also analyzed the market’s performance yesterday to understand what may lie ahead for the stock indices in the coming days.
PI Industries Ltd
- Current price: ₹3,948
- Target price: ₹4,660
- Upside: 18%
- Time frame: 12 Months
Why it’s recommended
The company was established in 1946 as an edible oil refinery, which later expanded into agrochemical formulations. In the mid-1990s, it entered the custom synthesis and manufacturing (CSM) export market and started catering to multinational agrochemical developers. Currently, the company is a renowned player in both CSM exports and the domestic agricultural allied industry. The company operates in more than 40 countries, has 9 overseas offices, with 8 manufacturing sites. It has expanded its international presence in countries like the US, Italy, Japan, the Netherlands, etc. The company has more than 25 stock points, 15,000 distributors, and 100,000 retail points.
In FY25, PI Industries registered a revenue of Rs 7,978 crore, a growth of 4% YoY, whereas PAT stood at Rs 1,660 crore. It has successfully become more inventory efficient, reducing its inventory days to 45 days from 62 days in FY24. The company generated Rs 1,413 crore from cash flow from operations, and gross margins stood at 53%, an improvement of 279 bps from FY24. In FY25, the company’s order book stood at around USD 1.3 billion. Additionally, the company’s domestic biologicals revenue grew by 20% YoY, and agrochemical exports surged 31% YoY. It commenced 6 new products in exports and 7 in domestic agri-brands, during the year. Their biological revenue currently generates Rs 250 crore, and for the next 5 years, the company targets Rs 1,000-1,200 crores in this segment.
Further, for FY26, the company is transitioning from an agri-sciences company to a life sciences platform and aiming for USD 15-20 billion in agrochem (CSM), pharmaceuticals, CRDMO, electronic chemicals, and biologicals, and a robust product pipeline with 50% of new inquiries on non-agrochem. The company spent Rs 928 crore on CAPEX, where the majority relates to PI Health Sciences (PIHS) in FY25. It expects Rs 800-900 crore for FY26 for new product solutions and global expansions. Gross margin is expected to remain at 50-52% for FY26.
The pharma business, which contributes 5% of the company, expects to achieve 75% revenue growth in FY26. Management expects EBITDA margins to be around 25% as a long-term sustainable guidance. The ETR is expected to remain at 22-23% for the next 2-3 years, and asset turnover will be 2.2x-2.5x. The company is planning to establish two multi-product plants, one in FY26 and another in FY27. In addition, the company is commissioning kilo-facilities in Lodi, Italy, in Q1FY26 and expects to commercialize 8-10 new products in FY26. The company expects to improve its order book and business visibility over the next 1-2 years.
Risk Factor
The agrochemical sector is highly competitive, and the company faces competition from both domestic and international players like UPL, Bayer CropScience, Rallis India, and Sumitomo Chemical Co. The company also faces strict environmental and safety regulatory norms; thus, any failure to adhere to changes in regulations like registration requirements, pesticide bans, etc, could impact its margins. The company is also exposed to working capital management risk, due to big inventory requirements, seasonality in operations, extended credit provided to dealers and distributors, and major dependence on a few customers.
Godrej Agrovet Ltd
- Current price: ₹772
- Target price: ₹980
- Upside: 27%
- Time frame: 12 Months
Why it’s recommended
Godrej Agrovet was established in 1991 as a part of the Godrej Group. It is a diversified, research and development-focused agribusiness company. It introduces innovative products and services, with a focus on improving the productivity of Indian farmers to increase crop and livestock yields sustainably. They have leading market positions in animal feed, crop protection, oil palm, dairy and poultry, and processed foods. It is one of the largest organized players in the compound feed market in India, with an annual sales volume of 1.47 million tonnes as of FY25.
On a consolidated basis in FY25, EBITDA margin excluding non-recurring items improved to 10.1% from 8.3% in FY24, despite revenue remaining relatively flat year-on-year. The vegetable oil segment delivered remarkable results in FY25, growing at 33.8% YoY from Rs 171 crore in FY24 to Rs 229 crore, driven by an increase in the average realization of crude palm oil and palm kernel oil prices. Their strategic emphasis on value-added products, which contributes a significant portion, ie, 37% of the total sales, continues to gain traction.
The animal feed segment showed a flatter trend in the sales volume growth, which accounts for 48.5% of the total revenue. In FY25, segment margin improved sharply to 6.1% from 4.6% in FY24 due to favorable commodity positions and cost optimization initiatives. Animal feed segment’s EBIT per MT significantly surged by 28%, from Rs 1,542 in FY24 to Rs 1,973 in FY25. Management expects FY26 EBIT/MT to remain in the Rs 1,900–2,000 range.
Godrej Agrovet’s teams developed over 61,700 hectares of smallholder oil palm plantations to bridge the demand and supply of edible oil. The management expects revenue growth between 16% and 18%, which is driven by volume growth. It also anticipates strong growth across the Crop Protection business, the Animal Feed business, and the Astec LifeSciences business in FY26.
Risk Factor
The company is vulnerable to fluctuations in raw materials and commodity prices for its animal feed, oil palm, and dairy segments. It may lead to supply chain disruptions, pricing pressure, etc, affecting the margins. The company also depends on favourable monsoon conditions; thus, weak monsoons or low crop realizations could lead to lower demand for the business. It is susceptible to government regulations. Astec LifeSciences’ business is also exposed to large working capital requirements with receivables and inventory of 8-9 months and supported by creditors of 5-6 months.
Market Recap June 12th, 2025
Today, Nifty 50 opened at 25,164.45 and it remained on a bearish trend throughout the trading session, hitting the day’s lowest at 24,825.90, and closing at 24,888.20, a fall by -1.01% or 253.20 points. BSE Sensex also followed the downtrend, opening at 82,571.67, dropping to day’s lowest at 81,523.16, and closing at 81,691.98, slipping by -1.00% or 823.16 points. It also breached the 20-day EMA of 81,544.53
Nifty 50 Index was trading above all four EMAs (20/50/100/200), with the RSI at 54.97, whereas the BSE Sensex RSI was at 53.64 (far below the overbought threshold of 70). The reason behind today’s fall was mainly due to rising geopolitical tensions in the Middle East, and a renewed tariff threat from Donald Trump to trading partners set to take effect from July 9.
There were no gainers witnessed today due to geopolitical fears and volatility in crude oil prices. The major laggards were the Nifty PSE index, which decreased by -2.10% or 212.80 points and closed at 9,919.35. Major stocks that led the fall were Hindustan Petroleum, Bharat Petroleum, GAIL India, and RVNL saw a decline of more than 3%. Tensions are rising in the Middle East with Israel preparing to target Iran’s nuclear facilities and possible retaliatory measures from Iran, which has increased the volatility in crude oil prices and supply chain disruption risk.
Nifty Realty also fell by -2.02% or 20.80, stood at 1,006.45. Anant Raj, Phoenix Mills, and Godrej properties were among the top laggards of this index, falling by more than 2% today.
The Asian markets also reacted in a bearish trend amid the rising geopolitical concerns over the Middle East and concerns over threats of renewed tariffs. The Hang Seng index in Hong Kong slipped -1.39%, or 331.56 points, closed at 24,035.38 in the Asia-Pacific markets. The Nikkei 225 in Japan was down by -0.65%, or 248 points, and closed at 38,173. On the US market, the Dow Jones futures also slipped by -0.63% or 271 points, closing at 42,637.
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