Bayer Cropscience Limited — Q2 FY26 earnings call

Call held 25 Nov 2025

Management summary

Bayer CropScience reported a resilient H1 FY26, navigating a 'perfect storm' of high input costs and erratic weather. While Q1 benefited from an early monsoon, Q2 faced liquidation challenges due to persistent rains. The company is pivoting its strategy toward higher-margin corn seeds and localized sourcing to reduce dependency on expensive European imports and volatile Chinese supply.

Highlights

  • H1 FY26 Revenue grew 3% YoY despite a challenging and erratic monsoon season in Q2.

  • Profit After Tax (PAT) expanded by nearly 12.5% YoY in the first half of the year.

  • Gross Margin expanded by more than 100 basis points in H1 FY26 as input prices stabilized.

  • Corn seeds portfolio grew by double digits in both volume and sales, acting as a primary growth driver.

  • Interim dividend maintained at ₹90 per share for the half-year period.

  • New products launched in the last 3 years contributed nearly 1/6th (approx. 16.7%) of total Crop Protection sales.

  • Management set a 3-5 year revenue growth target of high single-digits to low double-digits.

Concerns

  • China Supply and Pricing

Key financials

3 periods

Headline

  • Gross Margin Expansion
    100 bps
  • Dividend
    ₹90
    YoY 0%

H1

  • Revenue Growth
    3%
    YoY +3%
  • Profit After Tax Growth
    12.5%
    YoY +12.5%
  • Profit Before Tax Growth
    6%
    YoY +6%

FY25

  • EPS
    ₹126
    YoY -23.6%

What they filed

Q4 FY26: revenue up 5.3%, net profit up 13.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue1,631 1,738 1,057 1,046 1,915 +17%1,553 −11%1,106 +5%1,101 +5%
EBITDA314 184 20 171 348 +11%205 +11%117 +485%203 +19%
Net profit254 136 34 143 279 +10%153 +13%96 +182%162 +13%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Corn Seeds
    15.5% 5-Year CAGR10 double-digit H1 Growth
  • Crop Protection (CP)
    6% 5-Year CAGR16.6% New Product Contribution

Guidance & targets

Revenue

  • Revenue Growth Revenue · next 3-5 years · Medium confidence High single-digit to low double-digit
    our target is to grow by high single-digit to low double-digit in revenue

    — Mr. Vinit Jindal, ED & CFO

Margin

  • EBITDA Margin Improvement Margin · next 2-3 years · High confidence 100 bps
    we should see an improvement of 100 basis points with that sales increase... the first two to three years we should be able to see this.

    — Mr. Vinit Jindal, ED & CFO

Volume

  • Corn Seeds Portfolio Size Volume · next 5 years · High confidence Double
    continued doubling of our corn seeds portfolio.

    — Mr. Vinit Jindal, ED & CFO

Other

  • Direct Seeded Rice (DSR) Acreage Other · FY26 · High confidence Above 1 lakh

    From 20,000-25,000 today

    approaching 20,000–25,000 this year; above 1 lakh.

    — Mr. Simon Wiebusch, Vice Chairman, MD & CEO

Market context

  • Sourcing Mix (Global vs Local) Other · Long term · Low confidence 50-50
    I would love to come more to a 50-50 situation. Whether I can achieve that is a different discussion, right. Anything above that is probably also not realistic.

    — Mr. Simon Wiebusch, Vice Chairman, MD & CEO

Risks & concerns

  • China Supply and Pricing

    high

    Inability to pass on price increases due to cheap supply from China impacted FY25 margins significantly.

    Both acknowledged

  • Erratic Monsoon Patterns

    medium

    Q2 rains were 'relentless,' leading to missed sprays and liquidation issues in key geographies.

    Management acknowledged

  • Accounts Receivable and Collections

    medium

    Unprecedented collection issues in FY25; management is now being 'very vigilant' and 'timid' regarding channel credit.

    Management acknowledged

  • High Incremental Cost of Corn Production

    medium

    As production scales to meet national demand, incremental costs rise faster than chemical production due to land and weather constraints.

    Management acknowledged

Areas of evasion (2)

  • Absolute normalized margin figures for FY25
  • Specific impact of US corn imports on local pricing

Q&A highlights

2 direct
Margin Guidance Base and Sustainability Direct
The base year would be ‘24-25... the first two to three years we should be able to see this [100 bps improvement].

Clarifies that the margin expansion is expected annually over the near term from a low base year.

Asked by Prashant, Elara Securities

Historical Margin Comparison (12.5% vs 18-19%) Partial
I don't want to sit here and hope that a glyphosate spike will give us an upside... what Vinit is trying to do here, is give you something which you can hedge against, expect that to be baseline.

Management admits historical high margins were driven by temporary global shortages (glyphosate) and they are now guiding for a more sustainable, albeit lower, baseline.

Asked by Arjun, Kotak Mutual Funds

H2 FY26 Growth Outlook Direct
No. I don't think that that is realistic to see... we had a very strong Q4 last year... we're going to be looking to mid-single, hopefully.

Tempers expectations for a massive recovery in H2, citing a high base effect from the previous year's strong Q4.

Asked by Abhijit, Kotak Securities

2 min read 5 chapters

Detailed narrative

Corn Portfolio Emerges as the Primary Growth Engine

The corn seeds segment has nearly doubled over the last five years, achieving a CAGR of 15-16% compared to less than 6% for the dominant Crop Protection (CP) portfolio. Management expects this trend to continue, targeting another doubling of the corn portfolio over the next five years. This growth is underpinned by rising demand for ethanol and animal feed (silage), with corn now established as the third-largest field crop in India.

Margin Recovery Strategy Post-'Perfect Storm'

After a challenging FY25 where EPS dropped from ₹165 to ₹126 due to high input costs and Chinese pricing pressure, Bayer is seeing stabilization. Gross margins expanded by over 100 bps in H1 FY26. The company has committed to a further 100 bps improvement in margins over the next 2-3 years, using FY25 as the base year, driven by better product mix and operational efficiencies.

Strategic Pivot to Localized Sourcing

To combat the 'structural higher cost' of sourcing from Europe and the volatility of Chinese supply, Bayer is aggressively pursuing an 'India for India' sourcing strategy. The goal is to reach a 50-50 split between global and local/Asian sourcing for the CP portfolio. Management noted that Indian plants offer greater flexibility for smaller batches and faster switchovers compared to massive, single-line global plants.

Innovation Pipeline and New Product Contribution

Innovation remains a core pillar, with products launched in the last three years now accounting for approximately 16.7% of CP sales. 'Council Activ,' launched in FY23, has already become a top-two product for the company. Upcoming 'blockbuster' launches include Plenexos (insecticide) and Xivana Smart (fruit and vegetable segment), which are expected to drive future market share gains.

Scaling Direct Seeded Rice (DSR) for Sustainability

Bayer is placing a 'long bet' on Direct Seeded Rice to address labor shortages and water sustainability. Acreage has scaled from 5,000 acres last year to an expected 20,000–25,000 acres this year, with a target to exceed 100,000 acres. This transition is viewed as a systemic change in Indian agriculture that Bayer is uniquely positioned to lead through its integrated seed and CP solutions.

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