Thursday, July 10, 2008

Bayer Crop Science (BSCL)

© BCSL, 71% subsidiary of Bayer Ag – Germany, is the largest player in domestic agrochemicals, environmental science, and seeds.

© From CY 2007, has commenced marketing and distribution of seeds for the group companies, thus providing complete “seeds to harvest” solutions to customers. Initial investments in expanding marketing for seeds business has impacted profitability in short-term. Govt. focus on agriculture and improvement of yield, provide huge potential for business in medium to long-term.

© Bayer Ag plans to increase its penetration in Indian market by introducing globally renowned 2-3 new products from parent company’s portfolio.

© Parent company may make India an outsourcing hub (exports account for 16% of total sales).

© Company has closed down its Thane Plant in 2007 and has given VRS to its workforce. Company will unlock value of 108 acres surplus land at Thane plant by FY 2009, which could be more than current market cap.

For 15 months ended March 2008 (Company has changed its year-end from December to March and hence FY 2008 is of 15 months), Net Sales increased by 27.7% (on annualized basis) Rs 1,238.32 crore (Rs. 775.74 crore). However, decline in OPM% to 8.5% (as this period includes 3 weal quarters (as against 2 weak quarters in CY 2007) and Net Extra ordinary expenses of Rs 11.26 crore (net income of Rs 3.33 crore) dragged PAT down by 31.4% to Rs 49.10 crore.

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