Bayer CropScience share price falls post weak Q4 results, Elara Capital slashes target price; Time to buy or sell?
- Bayer CropScience share price falls 2% post weak Q4FY24 results. Stock opened at ₹5,270.05, hit low of ₹5,199.50. Technical analyst warns of sell-off if support at ₹5,150-5,200 breaks.
Bayer CropScience share price slipped nearly 2% on Monday's session after the company reported a weak set of fourth quarter results for financial year 2024 (Q4FY24). Bayer CropScience share price today opened at ₹5,270.05 apiece on BSE; the stock touched an intraday low of ₹5,199.50 and an intraday high of ₹5,280.
For the current calendar year (2024), the Bayer CropScience stock price has slumped 5.43%. According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, this has been an underperformer, and last week it was under tremendous pressure. Currently, ₹5,150–5,200 is a strong support zone that, if broken, will trigger further sell-off towards 5,000. The bearish gap left last week was around 5,400 to act as immediate resistance. Bhosale advises traders to use bounce to exit longs.
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Brokerage Elara Capital, in its recent report, reiterated a 'buy' call for the stock with a lower target price of ₹6,895 from ₹7,186 based on 30x (unchanged) FY26E P/E. However, the domestic brokerage believes that the stock has a 23% potential upside.
The fourth quarter of the 2023–24 fiscal year saw a 39.43% decline in net profit to ₹96 crore for Bayer CropScience, the Indian division of German agricultural science giant Bayer AG. This decline was attributed to drop in income.
Its total income for the fourth quarter fell by almost 18% to ₹821.1 crore from ₹1,003.2 crore during the same time last year.
The net profit for the entire year ending March 2024 decreased by 2.33% to ₹740.5 crore, while total revenue slightly decreased to ₹5,184.2 crore from ₹5,203.6 crore the previous year.
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Crop protection volumes were affected by weather issues and reduced reservoir levels, but overall performance remained resilient, according to Simon Wiebusch, managing director and chief executive officer. Reduced rates for its roundup herbicide and inventory control measures hurt the company's income, but its corn seed business grew.
Elara Capital noted in its analysis that the forthcoming Kharif season is expected to have above-average rainfall due to the emergence of La Nina coinciding with the Monsoon. A rise in the need for agrochemicals was caused by rainfall that was above average as well as by appropriate timing and geographical dispersion. Therefore, the brokerage anticipates crop protection volume to expand by a solid double digit in FY25.
“Despite a weak Q4, we expect ~15% volume growth each in FY25E and FY26E, driven by favourable climatic conditions. Seed availability will take a significant hit in FY25 before it improves in FY26. We lower our estimates for the top line by 2%, EBITDA by 14% and PAT by 13% for FY25E and by 0%, 6% and 4% for FY26E, respectively. The downgrade in earnings in FY25E is due to the declining seeds business, which is more profitable vs crop protection,” the brokerage said.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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