Bayer Cropscience Q3 Results Review - Decent Performance In Challenging Scenario: Prabhudas Lilladher

Prabhudas Lilladher Report

We broadly keep our estimates unchanged for FY23/24/25E. Bayer CropScience Ltd. reported decent set of numbers in Q3 FY23, with revenue up 5% YoY equally split between crop protection and seeds segment.

Growth was largely driven by better performance from Maize hybrid seeds and herbicides (Glyphosate) supported by double digit liquidation growth in CP portfolio.

We believe strong growth in maize hybrid seeds was primarily on the back of better crop acreages in rabi season (up 16% YoY as on third February-23) supported by remunerative maize prices (up 19% YoY to Rs 2,240/quintal as on January-23).

Better product mix has in-turn resulted into 330 basis points sequential improvement in gross margins, despite an inflationary raw material cost scenario (Ebitda margins up 150 bps YoY to 8.2%).

In Q3 FY22 Bayer CropScience reported exceptional gains of Rs 1 billion towards sale of environmental science business as against gains of Rs 585 million (towards sale of part of company’s seeds distribution business to Crystal crop protection)

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