HSBC has upgraded Bayer CropScience to a buy rating and raised its target price to ₹5,200 per share, citing expectations of a materially improved performance in the second half of FY26. The brokerage said industry dynamics in the domestic agrochemical space are turning more favourable, with better opportunities emerging in the corn seeds business and stabilising crop demand conditions after several challenging quarters.
HSBC expects a gradual but sustained improvement in Bayer’s earnings trajectory, supported by new product launches, premiumisation trends and fine-tuning of distribution and sourcing strategies aimed at restoring margins. The brokerage noted that a series of operational and inventory-led headwinds over the past year appear to have peaked, allowing the company to return to a growth footing. It added that Bayer continues to deliver strong return ratios, with RoICs above 27%, even through the recent downturn.
The upgrade also reflects HSBC’s view that the stock’s current valuation is attractive. At 29x FY27 estimated EPS, the stock trades below its 10-year average multiple of 32x despite a stronger capital efficiency profile and an implied dividend yield of nearly 2.9%. HSBC believes this combination of improving fundamentals and relatively benign valuations justifies a constructive stance going into FY27.
Disclaimer: The views and recommendations above are those of HSBC. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
