JM Financial Cuts PI Industries Target to ₹3,465 on Weak Pyroxasulfone Outlook

JM Financial has reduced its target price for PI Industries by 3.5% to ₹3,465 (from ₹3,590) while maintaining a ‘Reduce’ rating, citing concerns over declining sales guidance for pyroxasulfone, a key agrochemical developed by its Japanese partner Kumiai Chemical. The revision follows Kumiai’s forecast of a significant drop in pyroxasulfone sales for FY26 (Nov 2025–Oct 2026). Although Kumiai had outperformed in the past two years, growth has been muted over FY23–FY25 despite no U.S. generic competition. JM noted that PI Industries had already invoiced around ₹850 crore in pending shipments—likely pyroxasulfone—by September 2025. Given the lag between supply and Kumiai’s sales recognition, this backlog may fulfill much of FY26 demand, limiting near-term incremental orders. As a result, JM slashed EPS estimates by 4% for FY27–FY28 and emphasized that PI’s growth beyond FY27 will depend heavily on its non-pyroxasulfone portfolio. The stock has underperformed, falling over 4% in five sessions, down 8.5% in a month, and 22% in six months, with an 18% erosion in market cap over the past year—reflecting investor concerns over future revenue visibility.