Bayer Cropscience clocked 4 percent YoY revenue growth at Rs 1740 crore in Q1FY24 Vs Rs 1667.4 crore in Q1FY23. Its profit came in at nearly Rs 330 crore, up 9 per cent YoY. Gross margins are however down 580 bps to 42.7 per cent.
The earnings bettered analyst estimates on the back of strong sales in Crop Protection segment and robust volume growth in corn hybrid seeds led by better corn acreages in the ongoing kharif season as per Parbhudas Lilladher.
According to the brokerage, pricing pressure in Round-up (Glyphosate) coupled with high cost inventory provisions in the Crop Protection segment may have impacted gross margins. However, lower employee cost coupled with lower opex down 220bps and 430bps YoY has resulted into an EBITDA margin expansion of 70bps YoY to 24.4 per cent.
Commenting on the quarterly results, Simon-Thorsten Wiebusch, Executive Director, Bayer CropScience, said, “Corn seeds continue to yield strong results with volume growth driven by portfolio and better acreages in Kharif.”
Simon Britsch, Chief Financial Officer, Bayer CropScience added, that the company “delivered a Revenue from Operations growth of 9 per cent for the quarter despite normalisation of Roundup pricing. We have continued to proactively manage costs and invest in targeted growth opportunities resulting in increased Profit Before Tax by 6 per cent.”
Parbhudas Lilladher believes the worst in terms of falling raw material cost is largely behind as some prices have started to see uptick, “However, near-term weather challenges coupled with higher channel inventory in domestic market and pricing pressure in Glyphosate is likely to weigh” on the numbers.