Bayer CropScience - Q3 FY13 Result Update - Anand Rathi

We had initiated a BUY recommendation "Bayer CropScience" in our Diwali pick for a target price of Rs. 1402 which is around 17% from CMP. We maintain our price target for the same.

Bayer Q3, 12 net sales moved from Rs. 483 cr. (Q3, 12) to Rs. 559 cr. (Q3, 13), 15.6% growth. EBIDTA margin has improved by 241 bps from 8.36% to 10.77%. Adj. PAT has moved 30% YoY.

Observations:

Bayer top line grew by 15.6% YoY and declined by 30% QoQ. Q3 is generally lean period for Bayer.

EBIDTA has increased from Rs. 42 Crore to Rs. 63 Crore, a growth of 52%. EBIDTA margin has also improved by 241bps from 8.36 % to 10.77% YoY while declined by 623 bps QoQ. As Q3 is lean period for the company so QoQ comparison does not make any sense.

Adj. PAT has increased by 30% from Rs. 38 crore to Rs. 49 crore.

Bayer has sold Thane land and Building which has created one off income of Rs. 1130 Crore in Q3, 13.

Going ahead:

Bayer has achieved a top line of Rs. 2334.25 in 9months. Both Q3 & Q4 is generally lean period for Bayer. We expect Company will achieve sales of Rs. Rs. 2584 cr. in FY13e.

Company is very well equipped to launch 3-4 new products every year.

Valuation: We maintain our FY 14e & FY15e EBIDTA of Rs. Rs. 437 Cr. and Rs. 538 Cr. We maintain our positive bias and target price (Rs. 1402) for the stock.

Source : Equity Bulls

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