Prabhudas Lilladher is bullish on Bayer Cropscience has recommended buy rating on the stock with a target price of Rs 5288 in its research report dated February 04, 2019.
Prabhudas Lilladher's research report on Bayer Cropscience
BYRCS reported robust numbers with topline/EBITDA/PAT growing by 10%/94%/114% driven by decent growth in both agrochemical and seeds segment. Supportive weather in November and December led to higher sales and liquidation across India. Growth in Maize acreages (+14% till 31st Jan'20) in Rabi has catapulted growth for the Corn seed portfolio. Integration benefits have also started to kick in leading to reduction in employee cost and other expenses. BYRCS continues to remain a compelling long term play given the group's global leadership in crop protection industry, however there can be temporary regulatory risk (CIB has requested Min. of Agri. to constitute a committee to review Glyphosate and Profenofos for continued use or otherwise). Merger with Monsanto has been EPS accretive for BYRCS shareholders from Year1 itself. We introduce estimates for the combined entity after merger for FY21E & FY22E.
Outlook
We upgrade our ratings on Bayer to BUY with target price of Rs 5288 (Previous 4255) based on 33xFY22E EPS of Rs 160.
For all recommendations report, click here
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