Reviews

In this edition, we have reviewed Grindwell Norton Limited and Bayer Cropscience Limited. We suggest our reader-investors to HOLD in Grindwell Norton Limited and Bayer Cropscience Limited.  

We had recommended Grindwell Norton Limited in Volume 35, Issue No. 5 under the ‘Choice Scrip’ segment. The recommended price for the stock was Rs637.7. The recommendation was given on the basis of the government’s boost to infrastructure and the growing demand for GNL’s products. Having a glance at the performance of Grindwell Norton in the previous quarters we can see that on a consolidated quarterly basis its net sales increased by 11.61 per cent to Rs457.65 crore in Q3FY21 as compared to Rs410.03 crore in Q3FY20. The operating profit increased 31.78 per cent from Rs78.10 crore in Q3FY20 to Rs102.92 crore in Q3FY21. The net profit was also the highlight of the quarter as compared to the same quarter in the previous year. It came in at Rs65.48 crore in Q3FY21 as compared to net profit of Rs46.96 crore in Q3FY20.

On an annual basis the net sales were seen declining by 1.16 per cent from Rs1,598.06 crore in FY19 to Rs1,579.57 crore in FY20 whereas the operating profit was seen inching down by 0.75 per cent in FY19 as compared to FY20. The net profit on an annual basis yielded a rise of 8.99 per cent in FY20, standing at Rs183.88 crore as compared to Rs168.72 crore in FY19. Grindwell Norton is a part of Saint-Gobain, a major player globally in abrasives. It therefore benefits in terms of access to all developments in products and process technology, sourcing of products and development of exports. Considering its wellpositioned business that will gain from the revival of the economy and a positive financial outlook, we recommend HOLD.

We had recommended Bayer Cropscience Ltd. in Volume 35, Issue No. 16 under the ‘Analysis’ segment. The recommended price for the stock was Rs5,995.7. The basis of recommendation was the position enjoyed by the company in the market because of its capability to offer innovative products, technologies and business models, thus qualifying it to be a key driver for value creation in the long term. Observing the financial performance of Bayer Cropscience in the previous quarters, we can see that on a standalone quarterly basis its net sales rose by 2.62 per cent to Rs1,381.60 crore in Q2FY21 as compared to Rs1,346.30 crore in Q2FY20. The operating profit declined 1.23 per cent from Rs316.30 crore in Q2FY20 to Rs312.40 crore in Q2FY21. Meanwhile, the net profit became the highlight of the quarter at Rs224.60 crore in Q2FY21 as compared to net profit of Rs169.80 crore in Q2FY20.

On an annual basis the net sales were seen giving positive numbers, up by 13.96 per cent from Rs3,167.30 crore in FY19 to Rs3,609.40 crore in FY20. The operating profit was seen increasing by 48.33 per cent in FY19 as compared to FY20 whereas the net profit on an annual basis was seen increasing by 40.76 per cent in FY20, standing at Rs474.50 crore as compared to Rs337.10 crore in FY19. Bayer Cropscience deals in consumer health, pharmaceuticals and crop science. It strives to address some of the world’s most crucial global challenges and continues to develop new solutions. The healthcare and pharmaceutical industry has an ever-growing demand and market today. Taking into consideration the financial performance as well as robust demand for the products of Bayer Cropscience, we recommend HOLD.

(Closing price as of Feb 09, 2021)