Wednesday, January 6, 2010

Bayer Corp: Making Agriculture Better

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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