1. At a Glance
Nath Bio-Genes is in the “seed” business — literally. With EPS of ₹25.5, a book value of ₹341, and trading at just 0.67x BV, this stock looks cheap. But is it undervalued or underperforming for a reason? With a 7% ROE, 7% ROCE, and profits that grow slower than government paperwork, this agri-tech stock is stuck in a time loop between hope and hype.
2. Introduction with Hook
Imagine a company that makes the building blocks of agriculture – hybrid and GM seeds – but performs like a rusty tractor stuck in the mud.
- EPS: ₹25.5 (not bad)
- Book Value: ₹341 (juicy)
- Stock Price: ₹230 (value pick or value trap?)
- ROE/ROCE: Anemically chilling at ~7%
Despite being part of the Nath Group and serving farmers pan-India, the stock’s 5-year CAGR is… negative. It’s the Kaveri Seed cousin that didn’t get invited to the Diwali party.
3. Business Model (WTF Do They Even Do?)
Nath Bio-Genes develops, produces, processes, and markets:
- BT Cotton, Hybrid Rice, Maize, and Vegetable Seeds
- Operates on a grower-partnership model: production via leased farms
- Seeds R&D is in-house, but actual growing is outsourced
- Targets both Indian and global agri-markets
- The agri equivalent of SaaS: high R&D, low fixed cost, high uncertainty
This is a classic input-to-output play: no farming, only seeds, no direct retail, only via distributors.
4. Financials Overview
| FY | Sales (Cr) | EBITDA (Cr) | OPM % | PAT (Cr) | EPS | ROCE % | ROE % |
|---|---|---|---|---|---|---|---|
| 2021 | ₹271 | ₹67 | 25% | ₹56 | ₹29.3 | 10% | 9% |
| 2022 | ₹230 | ₹37 | 16% | ₹-67 | ₹-35.4 | 5% | – |
| 2023 | ₹234 | ₹49 | 21% | ₹35 | ₹18.5 | 7% | 7% |
| 2024 | ₹248 | ₹50 | 20% | ₹40 | ₹21.1 | 7% | 7% |
| 2025 | ₹362 | ₹52 | 14% | ₹42 | ₹22.2 | 7% | 7% |
Verdict: Revenue rising. Margins falling. Profits crawling. But stock is cheap – if you believe in the turnaround story.
5. Valuation
- P/E: 9.5
- P/B: 0.67
- EV/EBITDA: ~5x
- Dividend Yield: 0.87%
Fair Value Range Estimate:
- Bear Case: EPS ₹22 × PE 8 = ₹176
- Base Case: EPS ₹25 × PE 12 = ₹300
- Bull Case: EPS ₹28 × PE 15 = ₹420
Fair Value Range: ₹176 – ₹420
Current price = ₹230
Translation: Market doesn’t believe in the seeds just yet.
6. What’s Cooking – News, Triggers, Drama
- July 2025: Q1FY26 results out — sales ₹280 Cr, PAT ₹38 Cr (massive jump YoY)
- Resignation of Independent Director (July 2025): Exit by Ms. Shipra Agrawal
- Inventory Days dropping: From 4000+ to under 1000? Black magic or just a data clean-up?
- Crisil Ratings steady — no downgrade threats
- Focus on Cotton & Rice hybrids in high-growth geographies
- Still awaiting that big agri-reform boost
7. Balance Sheet
| Year | Equity Cap | Reserves | Borrowings | Total Liabilities | Total Assets |
|---|---|---|---|---|---|
| 2020 | ₹19 Cr | ₹539 Cr | ₹70 Cr | ₹730 Cr | ₹730 Cr |
| 2022 | ₹19 Cr | ₹523 Cr | ₹93 Cr | ₹740 Cr | ₹740 Cr |
| 2025 | ₹19 Cr | ₹630 Cr | ₹111 Cr | ₹1,017 Cr | ₹1,017 Cr |
Key Points:
- Borrowings rising slowly, but manageable
- Net worth growing slowly but steadily
- Leverage okay – no huge red flags
- Just a bloated working capital issue staring us in the face
8. Cash Flow – Sab Number Game Hai
| Year | Operating CF | Investing CF | Financing CF | Net Cash |
|---|---|---|---|---|
| FY22 | ₹17 Cr | ₹-20 Cr | ₹-22 Cr | ₹-25 Cr |
| FY23 | ₹38 Cr | ₹-3 Cr | ₹-2 Cr | ₹34 Cr |
| FY25 | ₹27 Cr | ₹-4 Cr | ₹-11 Cr | ₹12 Cr |
Key Insight:
Cash flows are inconsistent — like monsoons. And that’s a problem when your biz literally depends on monsoons.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 7% | 7% | 7% |
| ROCE | 7% | 7% | 7% |
| OPM | 21% | 20% | 14% |
| Debtor Days | 152 | 139 | 90 |
| Inventory Days | 4388 | 4000+ | 950 (dramatically improved?) |
| Working Capital Days | 579 | 498 | 342 |
Conclusion: This is a working capital heavy biz. Big inventory = big cash stuck = big risk.
10. P&L Breakdown – Show Me the Money
| Year | Sales (Cr) | EBITDA (Cr) | PAT (Cr) | EPS | Div Payout % |
|---|---|---|---|---|---|
| FY22 | ₹230 | ₹37 | ₹-67 | ₹-35.4 | — |
| FY23 | ₹234 | ₹49 | ₹35 | ₹18.5 | 11% |
| FY25 | ₹362 | ₹52 | ₹42 | ₹22.2 | 9% |
Takeaway: Flat sales for years → Sudden spike in FY25 → Keep an eye if it sustains
11. Peer Comparison
| Company | CMP | P/E | ROE | ROCE | OPM | Sales (Cr) | PAT (Cr) | Mcap (Cr) |
|---|---|---|---|---|---|---|---|---|
| LT Foods | ₹485 | 27.8 | 17% | 19% | 11.3% | ₹8681 | ₹605 | ₹16,824 Cr |
| KRBL | ₹389 | 18.7 | 9.4% | 11.9% | 12% | ₹5594 | ₹476 | ₹8,894 Cr |
| Kaveri Seed | ₹1137 | 20.8 | 20.6% | 21.7% | 24% | ₹1205 | ₹281 | ₹5,848 Cr |
| Nath Bio-Genes | ₹230 | 9.5 | 6.6% | 7.2% | 14% | ₹399 | ₹48 | ₹436 Cr |
Verdict: Nath is clearly the underdog. It’s the only one trading below book value. But profitability needs watering.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 45.6% — stable
- FII Ownership: Flatlining around 0.2%
- DII Holding: Dropped to 3.94% in Mar 2025
- Public Holding: ~50%
- Shareholders Count: 34,911 → Not growing = not trending
- No pledging, no buybacks, no bonus… just business as usual
13. EduInvesting Verdict™
Nath Bio-Genes is like that old-school farmer with premium-quality seeds and a broken tractor. The fundamentals aren’t broken — but they’re not thriving either.
Low PE, low PB, decent EPS? Sure.
But low ROE, flat dividends, patchy growth, and high working capital cycles are holding this story back.
In a nutshell: if India’s agri-tech future blooms, Nath could be a multi-bagger seed. But right now? It’s mostly dormant. Only for those with long patience and strong conviction.
Metadata
– Written by EduInvesting Research | 12 July 2025
– Tags: Nath Bio-Genes, Hybrid Seeds, Agri-Tech, Value Pick, Working Capital Trap, 13 Point Article, Edu Style
