Multi Baggers

SP Tulsian

Investment Advisor

5.30 AM Jan 1st 1970

Bayer CropScien

BSE ID : 506285 NSE ID : BAYERCROP

RECOMMENDED PRICE 224.00

PEAK FROM RECO 6550.00 2,824.11%

CURRENT PRICE 5095.00 Resource id #18

Bayer Cropscience is likely to sell its land plot at Rs 1,600 cr. It is also likely to post an EPS of close to Rs 19 for CY 07. With P/E multiple of 18, share can touch Rs 350 in next 12 months.

Bayer Cropscience

Bayer Cropscience is an MNC engaged in crop protection and seed business.

Promoter Bayer Germany is holding 71% while mutual funds, banks and financial institutions hold 8% thus having very low floating stock.

The paid up equity of the company is Rs.39.50 Crore while book value per share is Rs.80.

The company is having its plant at Kolshet Road, Thane of over 90 acres, on which manufacturing operations are being phased out. This land is likely to get sold by the company, which is valued at around Rs.1,600 Crore.

If land gets sold, value works out to Rs.400 per share, which shall get distributed amongst the shareholders by way of special dividend, in line with MNC Policy.

The company is streamlining its product portfolio by focusing on higher margin products like herbicide and seeds.

The company is integrating its crop protection business with seeds business under arrangements with Pro Agro Seed Co. Ltd., a Bayer Group Company.

The company is also shifting its focus from pesticides, a low margin business to herbicide and seed, which are high margin business.

The company has its year ending on December. For 12 months ending Dec-2006, the company is likely to post topline of approx Rs 750 Crore and bottom-line of approx. Rs 46 Crore resulting in an EPS of close to Rs 12.

For CY 07 the topline is expect to be Rs 1,000 Crore while bottom line is likely to be Rs 75 Crore giving an EPS of Rs.19.

For 9 months ended 30.09.2006, the company clocked a topline of Rs 530 Crore and a bottom line of Rs 37.08 Crore on equity of Rs 39.50 Crore. Audited CY 06 results are likely to be announced by 31st March, 2007.

Traditionally, July-Sept quarter is always the strong quarter for the company and in CY 06 of this quarter, topline was Rs.268 Crore and bottom line was of Rs.30.58 Crore. For Q4 of CY 06, topline is likely to be Rs.210 Crore and bottom line of Rs.10 Crore.

The company is having two manufacturing units at Ankleshwar and Himmatnagar. The production at Thane plant is being phased out.

The company is likely to post an EPS of close to Rs 19 for CY 07 and with P/E multiple of 18, share can touch Rs 350 mark in the next 12 months. Land sale proceeds of Rs 300 per share (net off taxes) shall further improve the valuation. Hence, share at Rs 224 is an excellent MNC bet.