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Check Before You Invest : Bayer CropScience Ltd

BSE: 506285 NSE: BAYERCROP ISIN: INE462A01022
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Pesticides & Agrochemicals

Snapshot

Q.1 Which industry/sub-sector does Bayer CropScience Ltd belong to?
Bayer CropScience Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Pesticides & Agrochemicals segment.
Q.2 Is Bayer CropScience Ltd a good quality company?
Bayer CropScience Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Bayer CropScience Ltd undervalued or overvalued?
Bayer CropScience Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 29 35.29
Price to Book 6.04 7.62
Price to Sales 3.46 4.55
EV to EBITDA 20.25 24.73
Q.4 Is Bayer CropScience Ltd a good buy now?
Bayer CropScience Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Bayer CropScience Ltd?
Bayer CropScience Ltd revenue growth is 7.2% for FY-2025, which is below its 5-year CAGR of 8.68%, indicating slower growth.

Q.2 Gross Profit margin of Bayer CropScience Ltd?
Bayer CropScience Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.6% for FY-2025, which is below its 5-year median of 16.4%, indicating decreasing margins.

Q.3 Operating Profit Margin of Bayer CropScience Ltd?
Bayer CropScience Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.61% for FY-2025, which is below its 5-year median of 17.85% indicating decreasing margins.

Q.4 Net Profit Margin of Bayer CropScience Ltd?
Bayer CropScience Ltd Net Profit Margin is 10.38% for FY-2025, is below its 5-year median of 13.63%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 12.6 16.4
Operating Profit Margin (%) 12.61 17.85
Net Profit Margin (%) 10.38 13.63

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Bayer CropScience Ltd?
Bayer CropScience Ltd Return on Asset is 7.09%, which is below its 5-year historical median of 9.51%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Bayer CropScience Ltd?
Bayer CropScience Ltd Return on capital employed is 25.42% for FY-2025, which is below its 5-year historical median of 33.88%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Bayer CropScience Ltd?
Bayer CropScience Ltd Return on equity is 19.93% for FY-2025, which is below its 5-year historical median of 25.43%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Bayer CropScience Ltd?
Bayer CropScience Ltd Cash conversion cycle is 103 days, above its 5-year historical median of 87 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.78 0.8
ROE (%) 19.93 25.43
ROCE (%) 25.42 33.88
Cash Conversion Cycle 103 days 87 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Bayer CropScience Ltd?
Bayer CropScience Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.27, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Bayer CropScience Ltd?
Bayer CropScience Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bayer CropScience Ltd?

Q.1 Promoter shareholding and pledge status of Bayer CropScience Ltd?
Promoters hold 71.43% of the Bayer CropScience Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bayer CropScience Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bayer CropScience Ltd vs industry peers?
Bayer CropScience Ltd revenue CAGR is 8.68%, compared to the industry median CAGR of 8.45%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 7.2 8.5
Gross Profit Growth (%) -22 13.9
Operating Profit Growth (%) -27.9 14
Net Profit Growth (%) -23.4 14.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.78 1.19
ROE (%) 19.93 13.63
ROCE (%) 25.42 16.98
Cash Conversion Cycle (days) 102.54 93

Valuation & price assessment

Q.1 Stock return of Bayer CropScience Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 1.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
1.1% -4.4% 1.6% -14.5%
Q.2 Valuation ratios of Bayer CropScience Ltd vs historical?
The current P/E ratio of 29 is lower than its historical median of 35.29, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 29 35.29 24.78
Price to Book 6.04 7.62 2.67
Price to Sales 3.46 4.55 1.43
EV to EBITDA 20.25 24.73 12.86

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