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Pidilite Industries, Navin Fluorine Get Ratings Upgrade From Morgan Stanley On Improved Growth Outlook
- Morgan Stanley upgraded Pidilite Industries Ltd. and Navin Fluorine International to 'overweight' and 'equal weight' ratings, respectively, due to their exposure to agrochemicals.
- The brokerage raised the target price for Pidilite Industries to Rs 5,000 and for Navin Fluorine to Rs 4,160, expecting a 65% and 8.4% upside, respectively.
- The forecasted agrochemicals-led growth cycle in financial year 2026 is anticipated to benefit Indian chemical companies with stronger asset runs and margin tailwinds.
- Global crop protection volume growth in 2026-2027 will particularly favor Indian chemical producers, with double-digit volume growth estimates.
- Morgan Stanley suggested potential risks like volume uptick challenges leading to pricing pressures for Indian chemical companies.
- Pidilite Industries' agrochemicals segment valuation multiple was increased to 23 times with segment earnings estimates rising by 7%.
- Navin Fluorine International's contract manufacturing and high-performance segment valuation multiple was adjusted to 25 times, reflecting operational efficiency and margin improvement.
- The favorable outlook signals a potential return to 20% CAGR earnings growth and a 200 basis points rise in return on capital employed.
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