Bayer CropScience’s record is anchored by a stable, unencumbered promoter holding and seven years of unqualified audit opinions. Three things demand attention: a direct-tax contingent liability of ₹2,331 crore that dwarfs any single year’s earnings, a glyphosate plant impairment of 734.9 crore that has already run through the profit-and-loss account, and a stream of GST penalty orders that continued into FY2026.
Key findings
- A ₹2,331 crore direct-tax dispute sits before the Supreme Court, while GST penalties keep arriving
Major- Direct tax contingent liabilities stood at ₹2,331 crore as of FY2025-26, mainly from a dispute over agricultural income exemption pending before the Supreme Court, High Court, and CIT(A). The State of Kerala has filed a ₹1,617 crore mass-tort suit against the company and 15 other Endosulfan manufacturers, with the next hearing scheduled for June 5, 2026. A stream of GST penalty orders continues: ₹2.2 crore on July 15, 2026, ₹2.98 crore on March 30, 2026, and ₹10.4 crore on December 24, 2025, across Telangana, Odisha, and Madhya Pradesh. - A glyphosate plant lost 734.9 crore in value over nine months
Major- For the nine months ended 31 December 2024, the company recognised an impairment loss of 734.9 crore on its glyphosate-based products manufacturing plant, covering property, plant and equipment, capital work-in-progress, and intangible assets. The impairment was driven by a significant change in market dynamics that eroded margins and pushed the recoverable value below carrying value. An impairment on the same plant of 15.5 crore had already been recognised for the year ended 31 March 2024. - At least 14 penalty orders totalling over ₹18 crore landed in a single year, and more followed
Major- In FY2023-24, the company received at least 14 separate penalty or tax-demand orders from GST, Central Excise, Customs, and Legal Metrology authorities across 10 jurisdictions, with a combined value exceeding ₹18 crore. The single largest was a ₹10 crore penalty from the Commissioner of Customs, Maharashtra on December 15, 2023. Fresh GST penalty orders continued into FY2026, including the December 25, 2025 orders from CGST & Central Excise, Indore for FY2018-19 and FY2019-20. - Dividends have repeatedly exceeded standalone profit, while cash flow disclosure is absent
Minor- Total dividend for FY2025-26 was ₹674.2 crore, against a standalone PAT of ₹689 crore. In FY2024-25, dividend of ₹420.2 crore compared with standalone PAT of ₹38.35 crore; in FY2022-23, ₹584.2 crore of dividend against PAT of ₹31.45 crore. The company does not disclose operating cash flow or capital work-in-progress capitalisation practices in its annual reports. - Revenue recognition is a recurring Key Audit Matter, but the estimation process is disclosed and customer concentration is absent
Minor- The auditor flagged revenue recognition, specifically variable consideration and refund liabilities, as a Key Audit Matter, an area requiring the most judgement, in each of the last six annual reports. Management’s estimated refund liabilities grew from ₹262.1 crore at 31 March 2020 to ₹570.5 crore at 31 March 2025. No single customer accounted for 10% or more of sales in any year from FY2020-21 through FY2024-25.
What to watch
- RPT cap vote. Shareholder vote on the ordinary resolution to approve material RPTs with Bayer AG up to ₹3,500 crore for FY2027-28, at the 68th AGM scheduled as per the notice dated 21st July 2026.
- Ankleshwar title deeds. The title-deed gap has been reported in every CARO report from FY2023 through FY2026; the FY2027 CARO report will show whether title deeds have been obtained.
Bottom line: This is a disclosed and audited record with a stable promoter and no pledge. The risk is concentrated in three places: a proposed RPT cap that ties the company’s fortunes to its parent, a tax contingent liability that exceeds any single year’s profit many times over, and an impairment that has already crystallised on the glyphosate plant. Watch the AGM vote on the RPT resolution, the Kerala suit hearing, and whether the daily-backup exception finally clears in FY2027.