Bayer Crop at new high

With a spike up in volumes of over 3.5 times, Bayer Cropscience today hit a life time high at Rs.6449, a jump of 14.5% over previous close.

The company posted fantastic Q1FY21 earnings and rightly so too as Q1 and part of Q2 are its peak season. It reported a 86% (YoY) jump in consolidated net profit at Rs.252 crore on a 29% rise in revenue from operations at Rs.1228 crore.

Commenting on the Q1 results, D. Narain, CEO & Managing Director of the company said, “Preparations for Kharif season started earlier this year due to COVID-19 related uncertainties. Consequently, we advanced our production schedule to enable early product availability and shifted to digital training & advisory for our farmer customers. On-time arrival of monsoon and uninterrupted availability of agri-inputs helped farmers procure seeds and crop protection products for timely Kharif sowing. This led to a strong demand in Q1, compared to previous years. New routes such as e-commerce sale of our brands helped us leverage our existing value chain partnerships and deliver greater value to farmers.”

Company’s EBITDA Margin has expanded by 530 bps to 26.5% - which is highest in industry, over 19.3% of Rallis India, 17.5% for Dhanuka, 18.6% for Sumitomo and 21.8% for UPL, as per latest earnings.

The company has pipeline to launch 32 products in the next 2 years, against 16 products launched in last 2 years. Given company derives more than 90% of Revenue from India, outlook for coming quarters is highly positive, with sentiments due to good cash flows to farmers, significantly higher water reservior levels, higher Kharif sowing, a timely and normal monsoon and higher rural spending by the Government.