India's Bayer CropScience Q2 profit falls on pricing pressure

Bayer Cropscience

13/11/2024 12:44

Nov 13 (Reuters) - Agricultural chemicals maker Bayer CropScience  BAYE.NS , the Indian unit of German drug
and pesticide maker Bayer AG  BAYGn.DE  posted a near 39% drop in second-quarter profit on Wednesday, hurt by
pricing pressure.
    The company reported a consolidated profit of 1.36 billion rupees ($16.1 million) for the three months ended
Sept. 30, compared to 2.23 billion rupees a year earlier.
    Revenue from operations rose 7.4% to 1.74 billion rupees, while total expenses rose by 18.4% to 15.71 billion
rupees, mainly due to spike in its raw material costs.
    For further results highlights click  urn:newsml:reuters.com:*:nFWN3MK1XG

    KEY CONTEXT
    Bayer CropScience attributed the increase in revenue to higher volumes, but said this was partially offset by
lower producer prices in China.
    While international agrochemical demand is recovering, with higher sales volume across geographies, ample
supplies from China have curbed price increases and hurt domestic companies' margins, analysts have said.
    The company also said that its margins were hurt by higher production costs in corn seeds due to adverse weather
conditions as well as a higher cost of goods sold in its chemical business.
    Peer UPL  UPLL.NS  posted a wider quarterly loss earlier this week hurt by pricing pressures.
    
    PEER COMPARISON                                
    
                                  Valuation (next 12     Estimates (next 12        Analysts' sentiment          
                                        months)               months)                                       
                         RIC         PE     EV/EBITDA   Revenue      Profit     Mean     # of    Stock to     Div
                                                       growth (%)  growth (%)  rating*  analyst    price     yield
                                                                                           s     target**     (%)
  Bayer Cropscience    BAYE.NS     32.93      23.73      11.50       14.73       Buy       6       0.99       2.22
    PI Industries      PIIL.NS     36.81      25.16      15.44       10.86       Buy      24       0.95       0.33
    Rallis India       RALL.NS     30.06      14.86      12.96       35.04      Sell      13       1.08       0.78
         UPL           UPLL.NS     14.83      7.68        8.27       770.53      Buy      21       0.88       0.19
 
    
  
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
    
    JULY-SEPTEMBER STOCK PERFORMANCE 
 
    -- All data from LSEG
    -- $1 = 84.3600 rupees

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 (Reporting by Yagnoseni Das in Bengaluru; Editing by Varun H K)
 ((Yagnoseni.Das@thomsonreuters.com;))