1. At a Glance
Bayer CropScience—global agrochemical royalty—is India’s slow but steady pesticide kingpin. It boasts 85%+ dividend payout, 25% ROCE, and zero debt. But sales have barely moved in 5 years, profit is on a mild decline, and FY25 brought more GST penalties than a shady Jaipur mandi trader. Premium price, premium pain?
2. Introduction with Hook
Imagine Sachin Tendulkar still playing cricket—still classy, still consistent—but suddenly getting out every 30. That’s Bayer CropScience in FY25.
- EPS dropped from ₹165 in FY24 to ₹126 in FY25
- Sales CAGR over 5 years = a yawn-worthy 9%
- Yet it pays out nearly 99% of profits as dividends—like a loyal grandpa handing out toffees
Also: GST violations? Apparently, Bayer’s been growing fines faster than crops.
3. Business Model (WTF Do They Even Do?)
Bayer CropScience is the desi arm of the German pharma-chemical giant. It does three main things:
- Agrochemicals: Insecticides, herbicides, fungicides.
- BioSolutions: R&D on crop health and yield enhancement.
- Corn Seeds: Yes, Monsanto legacy lives on here.
Their real moat? Deep rural distribution + strong IP + brand trust = 100-year franchise power. But scalability in India? Slower than a tractor on a state highway.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹5,140 Cr | ₹5,103 Cr | ₹5,473 Cr |
| Net Profit | ₹758 Cr | ₹740 Cr | ₹568 Cr |
| EPS | ₹168.7 | ₹164.8 | ₹126.4 |
| ROE | 28.3% | 21.9% | 19.9% |
| ROCE | 34.3% | 24.8% | 24.8% |
Observation:
Revenue is crawling, margins are shrinking, and ROEs are dipping. But they’re still debt-free, and cash-rich enough to flex via dividends.
5. Valuation
Method 1: PE-Based
- EPS (FY25): ₹126
- Historical PE band: 35–55x
- FV Range = ₹4,410 – ₹6,930
Method 2: DCF / Dividend Yield Approach
- Payout: ~85–99%
- Div. per share: ₹120+
- Target yield for fair value: 2.5%–3.5%
- FV Range = ₹3,430 – ₹4,800
Current Price = ₹6,224
Verdict: It’s sitting on the upper end of valuation and doesn’t leave much fertilizer for upside—unless you believe in a Monsanto 2.0 India boom.
6. What’s Cooking – News, Triggers, Drama
- GST Fine Tsunami (FY25): Over ₹50 Cr in penalties across 14+ disclosures
- Management Shuffle: CFO exit and re-entry of fresh blood in key roles
- Slowing Earnings: Multiple quarters of net profit decline—margin compression is real
- Pricing Pressure: Farmers want cheaper solutions, regulators are tightening pesticide rules
It’s not exactly drama-drama. But for a MNC? That’s like a full-blown soap opera.
7. Balance Sheet
| FY | Equity | Reserves | Borrowings | Total Liabilities | Fixed Assets | Cash & Other Assets |
|---|---|---|---|---|---|---|
| FY23 | ₹45 Cr | ₹2,667 Cr | ₹74 Cr | ₹4,679 Cr | ₹462 Cr | ₹4,066 Cr |
| FY24 | ₹45 Cr | ₹2,804 Cr | ₹47 Cr | ₹4,597 Cr | ₹414 Cr | ₹4,010 Cr |
| FY25 | ₹45 Cr | ₹2,806 Cr | ₹105 Cr | ₹5,246 Cr | ₹588 Cr | ₹4,622 Cr |
Takeaways:
- Almost debt-free
- Huge reserves → consistent cash position
- No aggressive capex: it’s a “milk the cow” model
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹609 Cr | ₹83 Cr | ₹-613 Cr | ₹79 Cr |
| FY24 | ₹952 Cr | ₹0 Cr | ₹-656 Cr | ₹296 Cr |
| FY25 | ₹262 Cr | ₹86 Cr | ₹-619 Cr | ₹-272 Cr |
Conclusion:
- Operating cash dropped sharply in FY25
- Financing = all cash out = dividends
- Investing = limited, very conservative
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 34.3% | 24.8% | 24.8% |
| ROE | 21.9% | 19.9% | 19.9% |
| PE | 38x | 49x | 49.3x |
| Dividend Yield | 1.4% | 2.01% | 2.01% |
| Inventory Days | 268 | 222 | 254 |
| Cash Conversion Cycle | 208 | 204 | 199 |
Declining returns but still elite. However, inventory levels rising? That’s not very lean for a Bayer machine.
10. P&L Breakdown – Show Me the Money
| FY | Sales | OPM % | Net Profit | EPS |
|---|---|---|---|---|
| FY22 | ₹4,734 Cr | 17% | ₹645 Cr | ₹143.6 |
| FY23 | ₹5,140 Cr | 18% | ₹758 Cr | ₹168.7 |
| FY24 | ₹5,103 Cr | 19% | ₹740 Cr | ₹164.8 |
| FY25 | ₹5,473 Cr | 13% | ₹568 Cr | ₹126.4 |
OPM compression is the big red flag. Input costs? Price control? GST fines? All of the above.
11. Peer Comparison
| Company | CMP | PE | ROCE | ROE | OPM | Sales | MCap |
|---|---|---|---|---|---|---|---|
| PI Ind | ₹4,050 | 37 | 22.6% | 17.6% | 27% | ₹7,978 Cr | ₹61,476 Cr |
| Sumitomo Chem | ₹542 | 54 | 25.1% | 18.8% | 20% | ₹3,090 Cr | ₹27,064 Cr |
| Bayer Crop | ₹6,224 | 49 | 24.8% | 19.9% | 13% | ₹5,473 Cr | ₹28,026 Cr |
| Sharda Crop | ₹781 | 23 | 16.0% | 12.8% | 13.8% | ₹4,319 Cr | ₹7,052 Cr |
Bayer trades at a steep premium to peers—mostly due to brand, dividend, and parentage. But margin compression puts it under pressure.
12. Miscellaneous – Shareholding, Promoters
| Stakeholder | % Holding (Mar 2025) |
|---|---|
| Promoters | 71.44% |
| FIIs | 3.49% |
| DIIs | 11.56% |
| Public | 13.53% |
Noteworthy:
- Promoter stake stable (Bayer AG)
- Public shareholding increased over last 4 quarters
- Dividend payout = 99% in FY25 → dividend aristocrat behaviour
13. EduInvesting Verdict™
Bayer CropScience is the Rolex of Indian agrochemicals—reliable, globally backed, and expensive AF.
Why It’s Great:
- Debt-free, cash-rich
- Massive dividend machine
- 25%+ ROCE consistently
- German parent = global edge
But the Yellow Flags:
- Slowing profit growth
- Margins under pressure
- PE near 50 = fully priced
- Regulatory overhang from GST fines
Final Thought:
If you want a growth story, look elsewhere. If you want compounding + dividends + “sleep like a rock” reliability, Bayer’s your Bayer. But don’t expect multibagger fireworks—this one’s more… fertilizer SIP for your portfolio.
Metadata
– Written by EduInvesting Research | 14 July 2025
– Tags: BayerCropScience, Agrochemicals, DividendAristocrat, GSTDrama, GermanMNC, ValueInvesting
