Bayer Crop Sci. (BAYERCROP)

FairStock Score: 55/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 1/1

Key Financials

Strengths

• Elite profitability: ROE 23.52% and ROCE 24.80% with low debt/equity of 0.34
• Promoter holding of 71.44% ensures strong alignment with minority shareholders
• Piotroski F-Score of 8/9 and Altman Z-Score of 4.54 indicate robust financial health
• Profit growth of 28.75% alongside a 2.68% dividend yield
• Steady business quality, reflected in the FairStock Score of 61/100

Concerns

• Valuation is rich: P/E of 31.32 and P/B of 7.48, with price about 220% above Graham Number
• DCF intrinsic value of ₹4,140.60 is below the current market price of ₹4,742.40
• Free cash flow of just ₹22 Cr is weak versus ₹96 Cr quarterly net profit, raising questions about cash conversion
• Sales growth is modest at 7.70%, so the high profit growth may not be sustainable

AI Analysis

Let me look at Bayer Crop Science as a business first. The numbers show a high-quality franchise: return on equity of 23.52% and ROCE of 24.80%, with very modest leverage at 0.34 debt-to-equity. Promoters own 71.44%, so owner alignment is strong. A Piotroski score of 8/9 and an Altman Z-score of 4.54 confirm a sound balance sheet. This does not look like a low-quality cyclical player; it appears to be a steady compounder in Indian agrochemicals, even though sales grew only 7.70%. The 28.75% profit growth is impressive, and the 2.68% dividend yield gives shareholders some reward while waiting. But a wonderful business can still be a terrible investment at the wrong price. At ₹4,742.40, the stock trades at 31.32 times earnings and 7.48 times book value. Graham's conservative formula places intrinsic value at just ₹1,459.69, leaving a -220% margin of safety. Even a more generous DCF estimate of ₹4,140.60 is below the current price. So I cannot say there is any valuation cushion. In addition, free cash flow is only ₹22 crore against quarterly net profit of ₹96 crore, so reported earnings are not fully converting into cash. The negative EV/EBITDA figure also makes me want to understand the cash flow arithmetic better before relying on reported profitability. I would not buy at this price. The business quality and financial strength earn my respect; the entry price does not. I would keep this stock on my watchlist and wait for a Mr. Market moment when the price gives me enough margin of safety. Patience is not passive; it is a decision.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer