Price at which the stock is suggested again – 5000 Rs.
Price at which this was first suggested(25-Nov-2019) Cmp-:3761
Bayer CropScience India is a 61 years old, 100% debt free company part of Bayer AG an 156 years old German multinational pharmaceutical and life sciences company and one of the largest pharmaceutical companies in the world headquartered in Leverkusen, Germany. The company is engaged in Crop Protection, Environmental Science and BioScience.
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Bayer CropScience Ltd formerly known as Bayer (India) Ltd was incorporated in the year 1958. Bayer CropScience is a world leader in the areas of crop protection, pest control, seeds and plant biotechnology. The company offers comprehensive solutions for modern, sustainable agriculture and non-agricultural applications.The company develops and markets fungicides, insecticides, herbicides, and seed treatment products. Company use plant biotechnology and breeding to offer solutions for agriculture, nutrition, health and biomaterials. Further company is diversified into inorganic-chemistry-related fields like hard metals, engineering ceramics, etc, after acquiring Hermann C Starck of Berlin, Germany.
The Company successfully launched 12 new products: 7 in the Crop Protection 4 in Hybrid Seeds and 1 in Environmental Science.
Other Activities-:
Bayer provides farmers with innovative crop protection products, high-quality seeds, and services, as well as advisory on the optimal use of products and applications.
In 2018-19, we strengthened our ‘Bayer Labhsutra’ program, which aims to increase per acre earnings and qualitative yield for farmers.
Structural changes in recent years (Acquisition/Sales)-:
Parent History-:
Bayer AG has a rich history of 156 years. Founded in Barmen in 1863 as a dyestuffs factory, Bayer’s first and best-known product was aspirin. In 1898 Bayer trademarked the name heroin for the drug diacetylmorphine and marketed it as a cough suppressant and non-addictive substitute for morphine until 1910. Bayer also introduced phenobarbital; prontosil, the first widely used antibiotic and the subject of the 1939 Nobel Prize in Medicine; the antibiotic Cipro (ciprofloxacin); and Yaz (drospirenone) birth control pills. Bayer’s areas of business include human and veterinary pharmaceuticals; consumer healthcare products; agricultural chemicals, seeds and biotechnology products.
In 1925 Bayer was one of six chemical companies that merged to form IG Farben,the world’s largest chemical and pharmaceutical company.
Bayer CropScience develops genetically modified crops and pesticides.
The Bayer Group comprises 420 consolidated companies in 90 countries throughout the world with Bayer employing 116,998 people worldwide. Bayer Stock included in nearly all the major share indices.
In September 2016, Bayer announced its intent to acquire 118 years old Monsanto for US$66 billion.
Monsanto -:
The Monsanto Company was an American agrochemical and agricultural biotechnology corporation founded in 1901. Monsanto developed Roundup, a glyphosate-based herbicide, in the 1970s, and became a major producer of genetically engineered crops. Monsanto was one of four groups to introduce genes into plants in 1983, and was among the first to conduct field trials of genetically modified crops in 1987. It was one of the top 10 US chemical companies until it divested most of its chemical businesses between 1997 and 2002, through a process of mergers and spin-offs that focused the company on biotechnology. Monsanto was one of the first companies to apply the biotechnology industry business model to agriculture, using techniques developed by biotech drug companies. In this business model, companies recoup R&D expenses by exploiting biological patents.
The company ranked 199th on the 2018 Fortune 500 of the largest United States corporations by revenue. Monsanto India Ltd shareholders to received 2 shares of Bayer Corp for every 3 shares of MIL held.
BuyBack’s-:
Over the past years company had twice bought back shares from public.
In 2013 the company had brought back upto 28.79 lakh equity shares (representing 7.29% of the total equity capital), from all the shareholders of the company on a proportionate basis through the Tender Offer route at a price of Rs 1,580 per equity share, aggregating to approximately Rs 455 crore.
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In 2015 the company had brought back upto 12.65 lakh equity shares (representing 3.45% of the total equity capital), from all the shareholders of the company on a proportionate basis through the Tender Offer route at a price of Rs 4,000 per equity share aggregating to approximately Rs 506 crore.
Financials-:
- Company reported marginal increase in consolidated net profit at Rs 169.8 crore for the second quarter of this fiscal while net profit stood at Rs 166.8 crore in the year-ago period.
- Total income rose to Rs 1,356.5 crore during July-September period of fiscal year 2019-20 as against Rs 1,249.1 crore in the corresponding period of the previous year.
- The Company’s Revenue from Operation was ` 26,857 Millions in 2018-19 as compared to ` 27,490 Millions in 2017-18. The Company reported Profit for the year of ` 2,376 Millions.
- Launch Upto 7 New Products Across Different Segments In 2019, Contributing Upto 6,000 mINR Peak Sales.
- Company is 100% debt free.
- Company has Reserves and Surplus of 2383Cr Rs.
- Cash and Equivalents of Company is about 324 Cr Rs.
FINANCIALS
For the 1st Quarter Ended June 2020
Net Sales at Rs 1,227.80 crore in June 2020 up 29.19%
Quarterly Net Profit at Rs. 251.70 crore in June 2020 up 86.03%
EBITDA stands at Rs. 340.20 crore in June 2020 up 54.36%
Bayer CropScien EPS has increased to Rs. 56.01 in June 2020
For the 2nd Quarter Ended Aug – 20
Bayer CropScience’s standalone net profit jumped 32.3% to Rs 224.60 crore.
Standalone profit before tax (PBT) surged 37.3% to Rs 296 crore
For the year ended 2020 March
OPM has rose significantly in Fy ended 2020.
Company has more than 2500 Cr of Reserves.
Promoter Holdings have increased by 3% since December Quater.
Comments-:
Growth of new launches has been steady and robust across years, with 7 new launches in 2019 (Calendar year), company further plans to take up innovation to 20% of total business. Company likely to launch 2 products until Q4/FY 2018-19 and 5 products thereafter to capture value in the mark.
Apart from that Company has several other product launches in Pipeline as Presented by company back in 2017 for its strategy upto 2022.
Bayer CropScience Limited enjoys a unique position in the market because of its capability to offer new innovative products, technologies, processes, services and business models.
OUTLOOK-:
Currently, India is one of the two largest producers of major agricultural commodities such as rice, vegetables, fruits, cotton and sugar. Agricultural export constitutes 10 percent of India’s exports and is the fourth-largest exported commodity. In 2018, the agriculture and allied sector contributed 15.87% of India’s gross value added (GVA) amounting to ` 26.92 lakh crores. Yet, the importance of Indian agriculture is on the decline. On one hand, the country’s population is increasing; on the other hand, farmers are grappling with decreasing arable land, limited natural resources and climate change.
80% of Indian farmers are smallholders and the challenges for smallholder farmers are even more pronounced due to fragmented landholdings, poor water availability and a lack of access to new technologies. That’s why any meaningful solution to solve problems in Indian agriculture needs to revolve around targeted support for smallholders, through contemporary crop protection solutions, high yielding seeds and modern breeding. We also need collaboration with key stakeholders including the government, industry, farmers and the society to transform Indian agriculture and make it globally competitive.
Given the importance of the agriculture sector, the Government of India, since the last five years has focused on the sustainable development of agriculture in the country. Key among its initiatives was the ambitious goal to “Double farmers’ income by 2022.”
The Crop Protection industry grew positively mid-single digit with major growth coming from Pulses, Vegetables and Rice. Except Herbicides, outperforming business units were Fungicides, Insecticides and Seed growth.
Globally, Bayer is a signatory to the ZERO-by-40 declaration to eliminate malaria from the planet by 2040, in partnership with the Innovative Vector Control Consortium and the Bill and Melinda Gates Foundation.
Please note that above expressed are our own views. Users are requested to take their own decision regarding investments. No member of DARKHORSESTOCKS would be responsible for any loss.
Conclusion – :
Some stocks are good for holding and never to sell. Well this is one such stock. Although we personally didnt buy this stock directly but had received this in merger/amalgamation with monsanto ltd and have been holding since then. However we would request users to keep booking partial profits from time to time in case you are not very comfortable with taking risk or loosing some money.
Bayer Crop Science had been previously suggested at the Price of 3761 exactly a year before and then the stock had hit 52 week high of 6600 delivering 75% returns. However the stock is currently down about 25% from 52 week high which makes it worth exploring for long term.
