Kaveri Seed Company Ltd

Financial Performance

• Revenue from operations: Rs 815 crores; vs Rs 945 crores prior year
• EBITDA: Rs 285 crores; vs Rs 332 crores prior year
• Operating margin: about 35%; same as last year
• Net profit: Rs 271.3 crores; vs Rs 316 crores
• Cash on books: Rs 267 crores

Segment and Product Trends

• Non-cotton revenue: Rs 601.57 crores
• Cotton revenue: Rs 213.43 crores
• New cotton products: 37% of cotton sales (vs 22% last year)
• New maize hybrids: >20% of maize sales
• Paddy hybrids KRH7344 and KRH7227 launched; 62% of new-product sales
• Export revenue: Rs 5.79 crores; grew from Rs 1.1 crores
• Selection rice revenue: Rs 159.07 crores
• Bajra hybrids: 65% of Bajra volumes (up from 61%)
• Inventory around Rs 1,200 crores; up about Rs 200 crores YoY

Liquidity and Balance Sheet

• Cash on hand: Rs 267 crores as of 30 June 2026
• Board buyback: decision to be taken; amount to be communicated if approved
• Inventory management: expect to adjust production next year; inventory being managed

Pipeline and Capex

• Product pipeline is among the best in 8–10 years
• Two new paddy hybrids launched; KRH7344 and KRH7227
• Pipeline expected to reflect in revenues in 2–3 years

Guidance and Outlook

• Growth target: 18%–20% over next 2–3 years; 15%–18% longer term (as stated)
• Exports target: Rs 100 crores in 3 years
• Exports margin target: 25%–30%
• Q2 margin likely lower than Q1; full-year margin to narrow, not rise
• Rabi maize demand expected to pick up

Q&A Highlights

• Karnataka Kharif sales: 2,600 tonnes last year vs 1,500 tonnes; potential recovery 1,100–1,200 tonnes (roughly Rs 40–60 crores)
• MP/Maharashtra underperformed; Rajasthan and other northern regions performed relatively better
• New hybrids/rice/multi-crop pipeline strong; revenue uplift anticipated in 2–3 years
• Cotton realizations remain high; MRP capped; industry context affecting margins
• New hybrid rice contribution: 53% of hybrid rice sales from new products; 62% of hybrid rice contribution linked to new hybrids
• Product pipeline considered the strongest in 8–10 years; expect revenue impact in coming years

Risks and Watchpoints

• El Niño/weak monsoon impacting sowing windows and demand
• Illegal Bt cotton and regional rainfall variability affecting margins
• High inventory levels (~Rs 1,200 crores) and potential production adjustments
• Geographic mix exposure; MP/Maharashtra weaker relative to other regions

Business overview

• Deficient monsoon weighed on sowing in key growth segments.
• Underlying growth narrative remains intact.

Operational highlights

• New products carry increasing share of portfolio.
• New cotton products reach 37% of cotton portfolio (up from 22%).
• Hybrid paddy share in new product bucket 62%.
• Maize volumes declined ~42.9% due to lower sowing.

Financial performance

• Total revenue ₹815.00 crore, down 13.78% YoY.
• Non-Cotton ₹601.57 crore, down 17.19% YoY.
• Cotton ₹213.43 crore, down 2.47% YoY.
• Exports grew 4x YoY.
• Maize volumes down 42.87% YoY; Selection Rice +0.95%.

Outlook & strategic priorities

• New variants across seed segments to broaden share.
• Expect spill-over demand if rainfall improves in Q2 FY27.
• Exports trajectory expected to continue.

Risks

• Monsoon variability remains key risk; diversification as mitigation.

Standalone Q1FY27 Highlights

• Revenue from operations ₹815 crore, down from ₹945.31 crore in Q1FY26.
• EBITDA ₹285.54 crore; PAT ₹271.30 crore.
• Cash on books ₹267 crore.
• Export revenue ₹5.79 crore, up from ₹1.15 crore.
• New cotton products comprise 37% of portfolio (vs 22%).
• Maize volumes down 39% due to 30% Karnataka sowing decline.
• Hybrid paddy KRH7344 and KRH7227 account for 62% of new products.
• Bajra volumes from new hybrids rise to 65%.
• New single-cross maize hybrids account for over 20% of maize portfolio.
• El Niño rainfall deficit impacted the quarter.
• If rainfall improves during Q2FY27, spillover demand expected.

Financial results

• Un-audited standalone and consolidated Q1 FY2026 results approved, with Limited Review Reports attached.

Directors & key management

• Re-appointment of G.V. Bhaskar Rao as MD for five years from Nov 15, 2026.
• Re-appointment of G. Vanaja Devi, C. Vamsheedhar, and C. Mithun Chand as WTDs for five years.

Shareholder meeting & governance

• 39th AGM scheduled for 29 Sept 2026; books closed 26-29 Sept 2026.

Board committees

• Audit, Nomination & Remuneration, and CSR Committees reconstituted.

Policies & disclosures

• Policy reviews: Related Party Transactions, CSR, and Nomination Policy approved.

Annual reporting

• Notice of AGM and related reports approved.

Auditor remarks

• Material going-concern uncertainty noted for one subsidiary.

Subsidiary financial matters

• Subsidiary with Rs.532.91 Lakh loss; negative net worth; ongoing funding required.

Retirement of CFO and KMP

• Retiring: Mr. K. V. Chalapathi Reddy, CFO and Key Managerial Personnel.
• Reason: retirement on attaining age of superannuation per employment terms.
• Effective date: cease to be CFO and KMP from close of business hours July 31, 2026.
• Impact: ceases to be KMP authorized for materiality and disclosures to exchanges.

Certificate status

• Certificate under Regulation 7a(5) for the quarter ended is enclosed.

Business

• Kaveri Seed sells hybrid and selection seeds across cotton, rice, maize, vegetables, and other crops.

Operational

• Maize revenue rose 15.8% in Q4.
• Vegetable revenue rose 1.7% in Q4.
• Export revenue grew about 76% in Q4.
• Cotton sales are expected to grow across North, Central, and South India.

Financials

• FY26 revenue rose 16.25% to Rs 1,303.77 crore.
• Non-cotton revenue rose 23.17% to Rs 1,060.18 crore.
• Cotton revenue fell 6.6% to Rs 243.59 crore.
• Q4 revenue rose 6.8% to Rs 82.21 crore.
• Q4 non-cotton revenue fell 8.1%, while cotton revenue jumped 453.1%.

Segment mix

• FY26 maize revenue rose 40.17% to Rs 403.18 crore.
• Hybrid rice revenue rose 18.37% to Rs 293.77 crore.
• Vegetable revenue rose 8.4% to Rs 69.96 crore.
• Q4 maize revenue rose 15.8% to Rs 30.05 crore.
• Q4 hybrid rice revenue rose 617.8% to Rs 1.29 crore.

Outlook

• Management expects growth in rainy millet across Rajasthan and Uttar Pradesh.
• Hybrid rice growth is expected from Punjab, Uttar Pradesh, Bihar, Chhattisgarh, and Jharkhand.
• Export business performance is expected to remain strong.
• Vegetable seed business outlook remains positive.

Risks

• Management cited government actions, political and economic developments, and technological risks as key uncertainties.