The document provides an analysis of Bayer CropScience Ltd, an agrochemical company. It includes the company's financial highlights for fiscal years 2014-2016 estimated. Key details include: - Revenue for Q4 FY2014 increased 41.54% to Rs. 5527 crores compared to the prior year. - Net profit for Q4 FY2014 declined 35.65% to Rs. 462 crores versus the previous year. - The company recommended a dividend of Rs. 5.50 per share for FY2014. - The analysis provides estimates that revenue will grow at a 13% CAGR from FY2013-FY2016 while operating profit grows 12% annually in the same

1. CMP 1805.00
Target Price 1985.00
ISIN: INE462A01022
JULY 4th
2014
BAYER CROPSCIENCE LTD
Result Update (PARENT BASIS): Q4 FY14
BUYBUYBUYBUY
Index Details
Stock Data
Sector Agrochemicals
BSE Code 506285
Face Value 10.00
52wk. High / Low (Rs.) 1939.00/1378.00
Volume (2wk. Avg.) 1781
Market Cap (Rs. in mn.) 66063.00
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY14A FY15E FY16E
Net Sales 32452.00 36021.72 39263.67
EBITDA 5102.00 5573.98 6068.54
Net Profit 2895.00 3135.16 3416.42
EPS 79.10 85.66 93.34
P/E 22.82 21.07 19.34
Shareholding Pattern (%)
1 Year Comparative Graph
BAYER CROPSCIENCE LTD S&P BSE SENSEX
SYNOPSIS
Bayer CropScience is a subgroup of Bayer AG is
one of the world’s leading crop science
companies in crop protection, non-agricultural
pest control, seeds & traits.
Revenue for the quarter ramps up by 41.54% to
Rs. 5527.00 million from Rs. 3905.00 million,
when compared with the prior year period.
During Q4 FY14, net profit stood at Rs. 462.00
million against Rs. 718.00 million in the
corresponding quarter ending of previous year.
Operating profit for the quarter stood at Rs.
848.00 million, witnessing a growth of 163% as
compared Rs. 323.00 million over the
corresponding period of the previous year.
During the FY14, turnover is Rs. 32452.00 mn,
grew by 19% as compared to Rs. 27253.00 mn in
the previous year.
During the year ended 31 March, 2014, EBIDTA is
also increased by 19% to Rs. 5102.00 mn from Rs.
4288.00 mn in the year ended 31 March, 2013.
Bayer CropScience Ltd has recommended a
dividend of Rs. 5.50/- per share of Rs. 10/- each
for the year ended March 31, 2014.
Net Sales and Operating Profit of the company are
expected to grow at a CAGR of 13% and 12% over
2013 to 2016E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Bayer Crop science Ltd 1805.00 66063.00 79.10 22.82 3.79 55.00
UPL Ltd 352.45 151061.60 9.70 36.34 4.01 200.00
Atul Ltd. 1006.90 29866.40 71.74 14.04 3.17 75.00
Rallis India Ltd 224.00 43561.00 7.53 29.75 6.11 240.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q4 FY14,
Months Mar-14 Mar-13 % Change
Revenue 5527.00 3905.00 41.54%
PAT 462.00 718.00 -35.65%
EPS 12.62 18.18 -30.56%
PBIDT 848.00 323.00 162.54%
The net profit declines to Rs. 462.00 million against Rs. 718.00 million in the corresponding quarter ending of
previous year, a decrease of 35.65%. Revenue for the quarter ramps up by 41.54% to Rs. 5527.00 million from
Rs. 3905.00 million, when compared with the prior year period. Reported earnings per share of the company
stood at Rs. 12.62 a share during the quarter, registering 30.56% decrease over previous year period. Profit
before interest, depreciation and tax is Rs. 848.00 million as against Rs. 323.00 million in the corresponding
period of the previous year.
Break up of Expenditure
Break up of Expenditure
Value in Rs. Million
Q4 FY14 Q4 FY13
%
Change
Cost of Material
Consumed
1798.00 1748.00 3%
Purchase of stock in
trade
1997.00 1108.00 80%
Employee benefit
Expenses
459.00 432.00 6%
Depreciation &
Amortization Expenses
107.00 96.00 11%
Other Expenses 984.00 866.00 14%

3. Latest Updates
• Bayer CropScience Ltd has recommended a dividend of Rs. 5.50/- per share of Rs. 10/- each for the year
ended March 31, 2014.
• The exceptional item in the Previous Year represents profit from sale of Thane Land and Buildings Rs. 11,083
Millions and from sale of Powai Building Rs. 823 Millions.
COMPANY PROFILE
Bayer CropScience is with annual sales of about EUR 8.8 billion one of the world's leading innovative crop
science companies in the area of crop protection (Crop Protection), non agricultural pest-control (Environmental
Science), seeds and plant biotechnology (BioScience).
Bayer CropScience as a global innovator and market leader in its industry believes that its technological and
commercial expertise entails a duty to contribute to Sustainable Development.
The acquisition of Aventis CropScience has helped catapult Bayer CropScience to one of the premier
organizations in the world in the areas of Crop Protection, seeds biotechnology and non-agricultural pest control.
Bayer plans to attain leadership position in these areas in the years to come. With a sizeable existence in 122
countries & 22,400 dedicated employees, Bayer CropScience is never too far from its customers.
Business Divisions
Bayer Crop Science is divided into 3 business groups:
• Crop Protection
Crop Protection activities are focused on four fields: Herbicides, Insecticides, Fungicides and Seed Treatment.
Company markets a range of insecticides under the name Confidor. It is fungicide unit is focused on cereals,
industrial crops and pathogens.
• Environmental Science
Bayer Environmental Science is consistently deliver high quality research products for the control of insect
pests of public health. Such products include pesticides to manage malaria vectors, cockroaches, rodents,
termites, stored grain pests, house flies and other pests in general. It has developed crop protection active
ingredients catering customer of non-agricultural pest control markets. The business areas covered by BES,
India are diverse in order to address the specific needs of the customers, covering three major segments:
Vector Control, Professional Pest Control and Green Industry.

4. • BioScience
BioScience, is a part of Bayer CropScience, and is a global player in research, development and marketing of
high quality seeds and innovative plant-based solutions derived from modern breeding and plant
biotechnology. BioScience offers an integrated portfolio of high quality seeds, trait technologies and high
performance crop protection products. BioScience activities are focused on three areas: Vegetable Seeds,
Agricultural Seeds and Research activities into novel plant-based solutions for agriculture, nutrition, health
and biomaterials.
Quality
The company is covering all the manufacturing units in India business operations and supporting services, was
audited on Quality Management System by TUV India Private Limited (TUV) and the Company was
recommended continuation of ISO 9001:2008 certificate. The Environmental Management System for
Himatnagar and Ankleshwar plants was audited by TUV and was recommended continuation of ISO 4001:2004
certificate.

5. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2013 -2016E
FY13A FY14A FY15E FY16E
SOURCES OF FUNDS
Shareholder's Funds
Share Capital 395.00 366.00 366.00 366.00
Reserves and Surplus 18918.00 17057.00 20192.16 23608.58
1. Sub Total - Net worth 19313.00 17423.00 20558.16 23974.58
Non Current Liabilities
Deferred Tax Liabilities 18.00 0.00 0.00 0.00
Other Long Term Liabilities 75.00 99.00 116.82 130.84
Long Term Provisions 384.00 401.00 421.05 437.89
2. Sub Total - Non Current Liabilities 477.00 500.00 537.87 568.73
Current Liabilities
Trade Payables 1972.00 2921.00 3359.15 3762.25
Other Current Liabilities 1949.00 2510.00 2961.80 3257.98
Short Term Provisions 439.00 515.00 566.50 611.82
3. Sub Total - Current Liabilities 4360.00 5946.00 6887.45 7632.05
Total Liabilities (1+2+3) 24150.00 23869.00 27983.48 32175.36
APPLICATION OF FUNDS
Non-Current Assets
a) Fixed Assets 3457.00 4446.00 5246.28 5980.76
b) Non-Current Investment 37.00 34.00 36.72 38.56
c) Deferred tax assets 0.00 139.00 152.90 163.60
c) Long Term loans and advances 734.00 721.00 742.63 757.48
1. Sub Total - Non Current Assets 4228.00 5340.00 6178.53 6940.40
Current Assets
Current Investments 0.00 3.00 3.30 3.56
Inventories 5000.00 5495.00 5934.60 6290.68
Trade receivables 3224.00 4099.00 4877.81 5560.70
Cash and Bank Balances 9741.00 4862.00 5780.88 7285.08
Short-terms loans & advances 1860.00 4039.00 5169.92 6048.81
Other current assets 97.00 31.00 38.44 46.13
2. Sub Total - Current Assets 19922.00 18529.00 21804.95 25234.96
Total Assets (1+2) 24150.00 23869.00 27983.48 32175.36

6. Annual Profit & Loss Statement for the period of 2013 to 2016E
Value(Rs.in.mn) FY13A FY14A FY15E FY16E
Description 12m 12m 12m 12m
Net Sales 27253.00 32452.00 36021.72 39263.67
Other Income 689.00 909.00 927.18 964.27
Total Income 27942.00 33361.00 36948.90 40227.94
Expenditure -23654.00 -28259.00 -31374.92 -34159.40
Operating Profit 4288.00 5102.00 5573.98 6068.54
Interest -37.00 -48.00 -56.64 -64.00
Gross profit 4251.00 5054.00 5517.34 6004.54
Depreciation -366.00 -646.00 -723.52 -788.64
Exceptional Items 11747.00 0.00 0.00 0.00
Profit Before Tax 15632.00 4408.00 4793.82 5215.90
Tax -4015.00 -1513.00 -1658.66 -1799.49
Net Profit 11617.00 2895.00 3135.16 3416.42
Equity capital 395.00 366.00 366.00 366.00
Reserves 18918.00 17057.00 20192.16 23608.58
Face value 10.00 10.00 10.00 10.00
EPS 294.10 79.10 85.66 93.34
Quarterly Profit & Loss Statement for the period of 30th Sep, 2013 to 30th June, 2014E
Value(Rs.in.mn) 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14E
Description 3m 3m 3m 3m
Net sales 10504.00 6544.00 5527.00 9948.60
Other income 279.00 234.00 165.00 183.15
Total Income 10783.00 6778.00 5692.00 10131.75
Expenditure -8655.00 -6061.00 -4844.00 -8655.28
Operating profit 2128.00 717.00 848.00 1476.47
Interest -7.00 -7.00 -28.00 -15.40
Gross profit 2121.00 710.00 820.00 1461.07
Depreciation -343.00 -113.00 -107.00 -97.37
Profit Before Tax 1778.00 597.00 713.00 1363.70
Tax -613.00 -207.00 -251.00 -463.66
Net Profit 1165.00 390.00 462.00 900.04
Equity capital 395.00 366.00 366.00 366.00
Face value 10.00 10.00 10.00 10.00
EPS 29.49 10.66 12.62 24.59

7. Ratio Analysis
Particulars FY13A FY14A FY15E FY16E
EPS (Rs.) 294.10 79.10 85.66 93.34
EBITDA Margin (%) 15.73% 15.72% 15.47% 15.46%
PBT Margin (%) 57.36% 13.58% 13.31% 13.28%
PAT Margin (%) 42.63% 8.92% 8.70% 8.70%
P/E Ratio (x) 6.14 22.82 21.07 19.34
ROE (%) 60.15% 16.62% 15.25% 14.25%
ROCE (%) 24.10% 32.99% 30.63% 28.60%
EV/EBITDA (x) 14.36 12.00 10.81 9.69
Book Value (Rs.) 488.94 476.04 561.70 655.04
P/BV 3.69 3.79 3.21 2.76
Charts

8. OUTLOOK AND CONCLUSION
At the current market price of Rs.1805.00, the stock P/E ratio is at 21.07 x FY15E and 19.34 x FY16E
respectively.
Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.85.66 and
Rs.93.34 respectively.
Net Sales and Operating Profit of the company are expected to grow at a CAGR of 13% and 12% over 2013 to
2016E respectively.
On the basis of EV/EBITDA, the stock trades at 10.81 x for FY15E and 9.69 x for FY16E.
Price to Book Value of the stock is expected to be at 3.21 x and 2.76 x respectively for FY15E and FY16E.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.1985.00 for Medium to Long term
investment.
INDUSTRY OVERVIEW
India is one of the fastest growing economies in the world and so is its population. In order to feed the ever
growing population, cultivation of crops has to be on a very large scale and agrochemicals helps the farmers to do
the same. The market for agrochemicals is growing in India owing to the changing policies of the government and
increasing production.
The agrochemicals industry is a significant industry for the Indian economy. India has to ensure food security for
population of 1.21 billion while facing reduction in cultivable land resource. With increasing population, demand
for food grains is increasing at a faster pace as compared to its production. This necessitates the use of pesticides.
Since the Indian agricultural sector is highly dependent on monsoons, the market for agrochemicals is expected
to grow at a conservative growth rate of 7.5% to reach ~ USD 1.95 billion by FY14. In terms of agrochemicals
production, India ranks fourth in the world after USA, Japan and China respectively. Besides, the global
agrochemicals industry is growing at about 12% CAGR and is likely to cross Rs 13 lakh crore marks from the
current level of about Rs 8.5 lakh crore.
Key Segments
Insecticides: Insecticides are used to ward off or kill insects. Consumption of insecticides for cotton has
come down to 50% from 63% of total volume after introduction of BT cotton. Fungicides: Fungicides are
used to control disease attacks on crops. The growing horticulture market in India owing to the government
support has given a boost to fungicide usage.

9. Herbicides: Herbicides are the fastest growing segment of agrochemicals. Their main competition is cheap
labor which is employed to manually pull out weeds. Sales are seasonal, owing to the fact that weeds flourish
in damp, warm weather and die in cold spells.
Bio-pesticides: Bio-pesticides are pesticides derived from natural substances like animals, plants, bacteria
and certain minerals. Currently a small segment, biopesticides market is expected to grow in the future
owing to government support and increasing awareness about use of non-toxic, environment friendly
pesticides.
Others: Plant growth regulators, Nematocides, Rodenticides, Fumigants etc. Rodenticides and plant growth
regulators are the stars of this segment.
Competitive Landscape
The Indian agrochemicals market is highly fragmented in nature with over 800 formulators. The competition is
fierce with large number of organized sector players and significant share of spurious pesticides. The market has
been witnessing mergers and acquisitions with large players buying out small manufacturers.
Key market participants include United Phosphorus Ltd, Bayer Cropscience Ltd, Rallis India Ltd, Gharda
Chemicals Ltd, Syngenta India Ltd, BASF India Ltd, etc. Top ten companies control almost 80% of the market
share. The market share of large players depends primarily on product portfolio and introduction of new
molecules. Strategic alliances with competitors are common to reduce risks and serve a wider customer base.
Market Trends
Focus on developing environmentally safe pesticides by the industry as well as the Government. The
Department of Chemicals has initiated a nationwide programme for “Development and production of neem
products as Environment Friendly Pesticides” with financial assistance from United Nations Development
Programme (UNDP).
Focus by larger companies on brand building by conducting awareness camps for farmers and providing
complete solutions.
Increase in strategic alliances among large players for greater market reach and acquisitions of smaller
companies globally to diversify product portfolio. For example: Rallis has a marketing alliance for key
products with FMC, Dupont, Syngenta, Bayer and Nihon Nohayaku. In addition, UPL has had a series of small
acquisitions globally to enter new geographies and gain product expertise.

10. Technology Trends
Increased R&D expected for development of new molecules and low dosage, high potency molecules
Focus on R&D in bio-pesticides segment with increasing preference for environmentally safe products in the
market
Growth Forecast & Drivers
The market size of Indian agro- chemicals industry is expected to more than double to $5 billion by 2017 on
rising agri production and increasing awareness among farmers. Currently, the market size of the sector is at $2
billion. In the wake of increasing agricultural production and awareness among farmers about the use of
insecticides and pesticides, the demand is bound to grow. It will cross $5 billion by 2017.
Growth in demand for food grains:
India has 16% of the world’s population and less than 2% of the total landmass.
Limited farmland availability and growing exports
India has ~190 Mn hectares of gross cultivated area and the scope for bringing new areas under cultivation is
severely limited. Available arable land per capita has been reducing globally and is expected to reduce
further. The pressure is therefore to increase yield per hectare which can be achieved through increased
usage of agrochemicals.
Growth of horticulture & floriculture
Buoyed by 50% growth experienced by Indian floriculture industry in last 3 years, Government of India has
launched a national horticulture mission to double production by 2012. Growing horticulture and floriculture
industries will result in increasing demand for agrochemicals, especially fungicides.
Increasing awareness
As per Government of India estimates, total value of crops lost due to non-use of pesticides is around USD 17
Bn every year. Companies are increasingly training farmers regarding the right use of agrochemicals in terms
of quantity to be used, the right application methodology and appropriate chemicals to be used for
indentified pest problems. With increasing awareness, the use of agrochemicals is expected to increase.
Globally, North America, European Union and Asia Pacific consume over 75 per cent of the world's
agrochemicals.

11. Disclaimer:
This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale
of any financial instrument or as an official confirmation of any transaction. The information contained herein is
from publicly available data or other sources believed to be reliable but do not represent that it is accurate or
complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall
not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. This document is provide for assistance only and is not intended to be and must
not alone be taken as the basis for an investment decision.

12. Firstcall India Equity Research: Email – info@firstcallindia.com
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