Bayer Cropscience

For agriculture company, business being seasonal, YoY comparison makes more sense. And for pesticide making companies, the first half is usually the best and Q2 is seasonally the best after which the numbers kind of start tapering off. Thus in Q3FY14 performance of Bayer, we see the seasonal effect  but mainly bottomline is affected due to asset impairment charges. The company ended Q3FY14 with a 57% (YoY) drop in net profit at Rs.39 crore on a 12% rise in net sales at Rs.627 crore.

The company has recorded a net impairment loss of Rs 15.4 crore during nine months ended December 31, 2013 (loss of Rs 17.7 crore for the quarter ended September 30, 2013 and reversal loss of Rs. 23 lakh quarter ended December 2013). The impairment losses are recorded as the company has signed a pact with Deccan Fine Chemicals for sale of its chemical manufacturing unit located at Ankleshwar, and another agreement for sale/transfer of assets related to poly- isocyanate unit facility to Bayer MaterialScience. The company is the Indian subsidiary of Bayer Germany which holds 71% stake and like a typical MNC, has negligible debt, a tight working capital cycle and strong reserves at Rs.1892 crore.