Bayer CropScience

CMP: 765

Bayer Cropscience Ltd. is involved in cropscience in the area of crop protection , non agricultural pest-control, seeds and plant biotechnology.

Bayer Cropscience is a good bet in mid-cap space. Its currently trading at a P/E of little less than 20 with decent dividend yields of less than 1% in the last 12 months. Minimal liability and rich cash & cash equivalents makes it a safe buy. Revenues have risen from 1055 Crores to 2139 Crores in the last 5 years. Profits have risen from 50 Crores to 131 Crores in the last 5 years. NPM has risen from less than 5% to little over 6% over 5 years. FY12 so far has shown striking growth of 100%. Buy and hold for long term gains.

Bayer Cropscience - Special & Interim Dividend - Repeat Call

Repeat Call: 1300
Looks like company might announce special + interim dividend of RS 110 per share in board meeting today. Stock split announcement could also be made.

Fundamentally, the company looks good and is a good buy for long term.

Hi Mani. I just received & read your book from start to finish & I love it!

I applied your style of analysis to this particular stock: BAYER CROPSCIENCE. Would highly appreciate your feedback on this analysis(since i'm a beginner)

BAYER CROPSCIENCE

Stock Price: 1341.35 ( as of writing this )
Market Cap: 5298 Cr
Debt: 0
Cash & Cash Equivalents: 429.40 Cr
Net Profits in F.Y 2008-2012
49.10 - 94.46 - 127.25 - 131.54 - 139.00
Compounded Profit Growth in the last 5 years is 30.33% with no dip in profit growth % in any of these 5 years.

4 Point Thumb Rule

1) Debt: ZERO
They have cash in hand of Rs.429.40 Cr
Cash to Market Cap Ratio is 8% which is supposed to be very good(?)

2) Brand Value is Good as it is the market leader in a sector with almost very less competition from the smaller players. The Market share of Bayer Cropscience is huge. It has a large distribution network with a deeper reach throughout India.

3) Competition:
Various smaller players like Rallis India, PI Industries, Monsanto India are not looking threatening(partly because of their debt) while Bayer Cropscience remains a debt free company.

4) Growth Prospects over the next few years looks good as Agriculture in India is showing good growth and there will always be a need for pesticides & chemicals for killing pests. Moreover the company is planning to phase out its earlier products and bring in more latest products which will enhance the future growth of this company.

5) Growth Consistency of this company is good in terms of both sales as well as profits. This is expected to continue for a few years atleast.

However, one thing that I noted in this company balance sheet concerns me(Don't know if it should)

The Quarter ending December 2012 posted sales figures of Rs.559 Cr while the Net Profit reported in the same period is Rs.903 Cr. How is this possible? Is some kind of Financial Shenanigan involved here while reporting. Should it concern the investors.

Finally, should we be ideally waiting for the price to reach the EMA50 or EMA 200 before we buy. Won't we lose out on the proposed dividends in that case?

Gautam, I would agree on most points.

If you look at profit or loss before other income, its stated as 54 Crores and Exceptional Items is declared as 1,118 Crores ... Not, entirely sure what's the source of that ... Could be anything really ... In most cases, these are one time incomes or expenditure.

Pick 5 to 10 Companies to diversify and that will keep your portfolio safe ... You can look at my portfolio consultation if you are interested.

If you can follow the Book on your own, you should do really well as well ... All the best and wishing you success with your investments ...

Cheers!
Mani