Monsanto

Ali On Content / 18 Jan 2010

Q. What is future prospect of the company?
 - P Swayam Prabha, Email
A. Monsanto India (BSE Code: 524084) with a face value of Rs 2 is currently trading at Rs 1,800 with a 52-week high/low of Rs 2,115/1,148. Monsanto India (MIL) is a part of the Monsanto Group, a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. The company helps farmers grow higher yielding farm products, produce healthier foods, better animal feeds and more fiber, while also reducing agriculture’s impact on the environment. MIL is engaged in the production and sale of agricultural inputs to farmers in India and is more concentrated in the area of high-yield crop varieties and hybrid crops such as corn, sunflower and cotton. The company principally offers corn hybrid seeds under the brand name ‘Dekalb’ and glyphosate herbicide agrochemicals under the brand name ‘Round Up’.

MIL’s last quarter performance had deteriorated and it swung into losses. For the quarter ending September 2009, MIL posted loss of Rs 4.6 crore against profit of Rs 15.71 crore posted last year during the same period. This loss was accompanied by a decline in sales too, which decreased by 11.46 per cent in the same period. MIL dipped into losses due to an increase in other expenses by 2.13 times in the same period. The current share price of the company discounts its last 12-month earnings by 47 times, which makes the valuation a little expensive. Though the prospect of the company looks good in the long term because of the current supply situation of food grains to feed the growing population and the need to develop high yielding varieties, the valuation is not right to enter the stock as of now.

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