Angel Broking has maintained neutral rating on Bayer CropScience (BCS), in its February 14, 2011 research report.
"Bayer CropScience's (BCS) results were marginally ahead of our estimates for 3QFY2011. Total sales grew by 38% yoy to Rs 531 crore, while EBITDA margin increased by 112bp to 11.8% (10.7%). Reported PAT came in at Rs 36 crore (Rs 21 crore), up 66% yoy as against our estimate of Rs 34 crore. Going ahead, we expect BCS to be on a strong growth trajectory on the back of high agro-commodity prices. Given that the stock is currently trading at fair valuations."
"Against BCS's top-line growth of 38%, staff cost and other cost increased by only 12.5% and 19%, respectively, which led to a 112bp expansion in EBITDA margin to 11.8%; however, on 9MFY2011 basis, EBITDA margin declined by 171bp to 12.7%. During the quarter, sales were affected due to late and slightly above-normal monsoons; however, we believe the same will be booked in 4QFY2011. Thus, we have marginally revised our estimates to factor in the same and expect the company to register CAGR of 19% and 16% in net sales and profit over FY2010-12, respectively. At current levels, the stock is trading at fair valuations of 17x FY2012E EPS. Hence, we remain Neutral on the stock," says Angel Broking research report.
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