Bayer CropScience hits all-time high as Q1 net jumps 86% YoY to Rs 252 cr

Profit before exceptional items and tax came in at Rs 313.8 crore, up 54 per cent YoY.

Shares of Bayer CropScience zoomed as much as 14.48 per cent to hit an all-time high of Rs 6,449 apiece on the BSE on Friday after the company reported encouraging numbers for the quarter ended June 2020 (Q1FY21). 

At 09:26 AM, the stock was trading around 12 per cent higher at Rs 6,305. In comparison, the benchmark S&P BSE Sensex was trading 0.43 per cent lower at 37,863 levels.

For the quarter under review, Bayer CropScience reported an 86 per cent increase in its consolidated net profit at Rs 251.7 crore on better monsoon that helped boost its sales of seeds and crop protection products. The company had posted a profit of Rs 135.3 crore in the year-ago period. Profit before exceptional items and tax came in at Rs 313.8 crore, up 54 per cent against Rs 203.5 crore in the June 2019 quarter. 

Revenue from operations stood at Rs 1,227.8 crore, up 29 per cent against Rs 950.4 crore in the corresponding quarter of the previous fiscal. 

“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," said  D Narain, CEO & Managing Director.  

Adding, "This led to 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."

Analysts at Prabhudas Lilladher are bullish on the stock post the June quarter results and have maintained their "BUY" rating with the target price of Rs 6,421. 

"With robust paddy plantings and decent growth in Corn acreages, seeds segment is expected to sustain high growth. Lower labour availability, remunerative crop prices, and well-distributed monsoon will drive crop protection segment growth while leveraging synergy benefits from Monsanto acquisition will aid profits," the brokerage said in a result review note.  

"Bayer remains our preferred pick in agrochemical space considering turnaround compelled by new management and robust free cash flow generation," it adds.