Monsanto spurts on bountiful Q1

Monsanto India, subsidiary of USA based Monsanto Company, is doing very well on the bourses today. From a close of Rs.1874.70 yesterday, it opened higher at Rs.1915.20, going on to hit an intra day high at Rs.2020 and is currently at rs.1975 levels, up almost 5.5%.

The stock has spurted up on account of its bountiful numbers for Q1FY15, showing a 26% jump in net profit at Rs.71 crore on a 16% rise in net sales at Rs.259 crore. In Q4FY14, the company had posted a net loss of Rs.6 crore, thus sequentially it is a very healthy turnaround. Seasonally, Q4 as such is always weak and this time around Q2 is also expected to be good given the late arrival of monsoon, as sowing got delayed into Q2. Q3 as such, is the company’s peak season due to rabi sowing. This is a typical MNC, debt free and parent company’s stake is at 72.14% and reserves stands at Rs.390 crore.

Recently, the Govt put on hold a field trial of 13 genetically modified (GM) crops, a departure from previous UPA Govt where Govt allows only commercial use of Bt Cotton, grown across 10 million hectares in India. This uncertainty over BJP’s stand on GM crops is a negative for the company.