IN : Bayer Cropscience Ltd - Best in class seed & agrochemical company

We forecast EPS growth of 14.6% CAGR over FY21-24F, and EPS growth at 7.8% CAGR and gross margin expanding by 300bp over FY21F. Rising import costs have hit gross margins in FY21F, but we believe Bayer would be able to pass on the cost pressures in FY22F. We value Bayer at 41x FY23F EPS, at 10% premium to long-term mean, but in line with peers to arrive at TP of Rs6,621. We initiate coverage with Add.