Investment Rationale

• BSCL, an agro-chemical company, is subsidiary of the Euro 35 billion Bayer AG

• Its business is divided into crop protection, environmental science and bio-science

• Per hectare consumption of pesticide in India is merely 0.48 kgs, lower than 5.0 kgs per hectare in the US and again less than 10.0 kgs per hectare in Japan

• With its strong R&D, BSCL continues to offer new products to its customers

• The Company derives nearly 80.0% of its exports revenue from its Bayer AG group companies due to the cost advantages

• New products’ launch, outsourcing from parent and low pesticide penetration will drive the future growth of the Company

• Despite poor rainfall in H1FY10, the Company registered a strong performance

• Its profit  in H1FY10 is Rs. 109.42 crore higher than Rs. 94.46 crore posted for FY09

• The Company has shut down its Thane plant spread over 108 acres of land, valued around Rs. 1,000.0 crore

• The sale of land could generate huge cash reserves for BSCL

• The stock could be bought at current levels with one year target price of Rs. 632.0

Bayer Crop Science (CMP: Rs. 498.00)
• BSCL, an agro-chemical company, is subsidiary of the Euro 35 billion Bayer AG• Its business is divided into crop protection, environmental science and bio-science• Per hectare consumption of pesticide in India is merely 0.48 kgs, lower than 5.0 kgs per hectare in the US and again less than 10.0 kgs per hectare in Japan• With its strong R&D, BSCL continues to offer new products to its customers• The Company derives nearly 80.0% of its exports revenue from its Bayer AG group companies due to the cost advantages • New products’ launch, outsourcing from parent and low pesticide penetration will drive the future growth of the Company• Despite poor rainfall in H1FY10, the Company registered a strong performance• Its profit  in H1FY10 is Rs. 109.42 crore higher than Rs. 94.46 crore posted for FY09• The Company has shut down its Thane plant spread over 108 acres of land, valued around Rs. 1,000.0 crore • The sale of land could generate huge cash reserves for BSCL• The stock could be bought at current levels with one year target price of Rs. 632.0

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Recommendation by Rahul Sonthalia, Analyst, Kredent Group

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