Kaveri Seeds Company's topline dwindled by 19.69 per cent in Q1FY16

Kaveri Seeds Company (KSCL) announced its June 2015 quarter result. The company's net sales declined by 19.69 per cent to Rs 664 crore in Q1FY16 as compared to same period in previous fiscal year. Its revenue growth is impacted by volume moderation in cotton and maize while it witnessed healthy growth in hybrid rice. KSCL's total expenditure decreased by 26.28 per cent to Rs 438.27 crore in Q1FY16 on yearly basis. The company's total expenditure declined due to 34.89 per cent reduction in other expenses,a 20.59 per cent reduction in raw material prices during the quarter.

KSCL's EBITDA decreased by 2.84 per cent to Rs 225.8 crore in Q1FY16 as compared to same period in previous financial year. However, the EBITDA margin of the company expanded by 590 basis points to 34 per cent in Q1FY16 on yearly basis. Its profitability margins surprisingly increased because of lower royalty payments calculated on the prices submitted by recommended institutions to relevant state governments. KSCL's focus on non-credit markets has protected realizations which are better than industry average. The net profit KSCL reduced by 5.19 per cent to Rs 218.44 crore in Q1FY16 as compared to same period in previous fiscal year. The company's net profit margin expanded by 503 basis points to 32.89 per cent in Q1FY16 on yearly basis. 

KSCL's shareholding pattern indicates that FII holdings contracted by 9 basis points to 22.17 per cent and DII holdings also contracted by 17 basis points to 6.51 per cent during June 2015 quarter. The stock on BSE decreased by 8.83 per cent to Rs 630.9 on August 13, 2015. The share price on BSE increased 2.87 per cent and trading at Rs 639.35 on intraday basis.

According to the IMD forecast FY16 expected to be drought similar as previous fiscal year. Kharif acreage is down in the current financial year. The unorganized players are selling at discounted prices. Maharashtra government also cut seeds MRP. KSCL planned certain measures for FY16 such as to offer lesser credit period for better receivables. The company is going to focus on Cash & Carry and to gain market share in non-credit markets of Madhya Pradesh, Gujarat and Maharashtra.

KSCL is a seed company engaged in the production and distribution of high quality hybrid seeds of field and vegetable crops as well as micronutrients and bio-products.The Company operates in two segments: seed division and microtek division, which produces Micronutrient mixtures, Organic Products and Biopesticides. Its product portfolio includes commercial crops, which include cotton and sunflower; food crops, which include corn, rice, bajra and jowar, and vegetables which include, tomato, okra and chilly. KSCL’s cotton seed brands include jaadoo, jackpot, ATM and singha.