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Sunday, Feb 20, 2005

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Syngenta India: Buy

Aarati Krishnan

INVESTORS with a long-term investment perspective can consider adding the Syngenta India stock to their portfolio.

The stock trades at a price-earnings multiple of about 18 times its 2004 earnings, which stand at Rs 22. Improved growth rates in the domestic market for agrochemicals, scope for introducing a larger number of specialty products from the parent's portfolio and export opportunities, make for strong growth prospects for the company over the next few years.

Syngenta India will enjoy greater access to its parent's product pipeline in agrochemicals and seeds after the introduction of the product patent regime since January. The company has already made significant headway in the Indian market, posting a 37 per cent sales growth and 32 per cent profit growth in 2004. A slew of new product launches in the insecticide and fungicide segment, domestic market share gains and a ramp up in exports have helped the company register strong revenue growth this year. Investors in stock will, however, have to factor in the risk associated with low levels of liquidity in the stock, with its public holding at just over 10 per cent.

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