India's Bayer Cropscience post jump in Q2 profit as rainfall recovery aids demand

Bayer Cropscience

03/11/2023 08:17

BENGALURU, Nov 3 - Bayer Cropscience  BAYE.NS , the Indian unit of German drug and pesticide maker Bayer AG
 BAYGn.DE , reported a more than 37% jump in quarterly profit on Friday as rainfall recovery in September aided the
sale of its farm products. 
    Profit rose to 2.23 billion rupees ($27.62 million) during the three months ended Sept. 30 from 1.63 billion
rupees a year earlier. 
    Revenue from operations grew more than 11% to 16.17 billion rupees. 
    The firm also declared a dividend of 105 rupees per share. 
    For further earnings highlights, click  urn:newsml:reuters.com:*:nFWN3C368P
    
KEY CONTEXT 
    A revival of seasonal rainfall in September aided sowing and other farm activities, uplifting demand for the
company's products, which include herbicides and pesticides, analysts said.    
    Unsold stock from the last winter crop season and Chinese oversupply have kept product prices under check,
analysts added, aiding volumes for agribusinesses. 
    The company said a "sustained focus on maintaining optimal channel inventory" helped growth in profit before
tax. 
   However, rival UPL  UPLL.NS , last month, swung to a quarterly loss as dealers emptied their inventories amid a
softer demand environment.
    
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       27.64         18.97     8.87      11.29    HOLD           7    0.95        2.34
 Ltd                                                                                                        
 PI Industries Ltd    PIIL.NS       30.46         21.87    21.19      20.45    BUY           23    0.81        0.29
 Rallis India Ltd     RALL.NS       23.16         11.54     5.48      44.16    SELL          14    1.05        1.14
 UPL Ltd              UPLL.NS       11.25          7.05     2.40       8.54    BUY           25    0.78        1.85
    
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The 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 = 83.2625 Indian rupees  

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 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Sohini Goswami)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))