Buy Bayer Cropscien; target of Rs 1095: Firstcall Research

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Buy Bayer Cropscien; target of Rs 1095: Firstcall Research

Firstcall Research is bullish on Bayer Cropscience and has recommended buy rating on the stock with a target of Rs 1095 in its April 19, 2011 research report.

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Firstcall Research is bullish on Bayer Cropscience and has recommended buy rating on the stock with a target of Rs 1095 in its April 19, 2011 research report.

"Bayer is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. Bayer Crop Science, a subgroup of Bayer AG with annual sales of EUR 6.830 billion (2010), is one of the world's leading innovative crop science companies in the areas of crop protection, non-agricultural pest control, seeds and traits. The company offers an outstanding range of products and extensive service backup for modern, sustainable agriculture and for non-agricultural applications. Bayer Crop Science has a global workforce of 20,700 and is represented in more than 120 countries. The company's products and services are designed to benefit people and improve their quality of life. At the same time Bayer creates value through innovation, growth and high earning power."

"For the third quarter, the top line of the company increased 38%YoY and stood at Rs.5313.50mn against Rs.3855.10mn of the same period of the last year. The bottom line of the company for the quarter stood at Rs.355.70mn from Rs.213.70mn of the corresponding period of the previous year i.e. a increase of 66%YoY. EPS of the company for the quarter stood at Rs.9.01 for equity share of Rs.10.00 each."

"The Company and KeyGene, a biotech-company headquarter in Wageningen, the Netherlands, announced that they have entered into an exclusive trait development agreement. Both companies will combine their expertise in the fields of protoplast technology and targeted molecular mutagenesis to create novel traits for crop improvement."

"The top line and bottom line of the company are expected to grow at a CAGR of 23% and 30% respectively over FY09 to FY12E. Price to book value of the company is expected to be at 5.11 x for FY11E and 3.99 x for FY12E respectively. EPS of the company is expected to be at Rs.44.69 and Rs.52.16 for the earnings of FY11E and FY12E respectively. On the basis of EV/EBDITA, the stock trades at 13.63 x for FY11E and 13.07 x for FY12E. At the market price of Rs 953, the stock is trading at 21.33 x and 18.27 x for FY11E and FY12E respectively. We recommend 'BUY' this stock with a target price of Rs 1095 for medium to long term investment," says Firstcall Research report. 

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To read the full report click on the attachment