KAVERI SEED CO LTD (NSE: KSCL) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
C. Mithun Chand — Whole Time Director
Analysts:
Unidentified Participant
Siddhant Dand — Analyst
Amit Doshi — Analyst
Dhruv Saraf — Analyst
Krushi Parekh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Kaveri Seed Co. Ltd. Q1 FY26 earning conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
Joining us today on this call we have with us Mr. Mithun Chand, Executive Director. Before we begin, I would like to mention that some of the statements made in today’s conference call may be forward looking in nature and may involve risk and uncertainties. For a list of such considerations please refer to the earnings presentation.
I now hand the CONFERENCE over to Mr. Mithun Chand. Thank you. And over to you sir.
C. Mithun Chand — Whole Time Director
Thank you. Good afternoon and welcome everyone to our quarter one financial 26 earnings conference call. We hope you had a chance to review the presentation of our results which is also available on our website. I would touch upon the operational financial performance of the company and then open the floor for Q and A. We are delighted to declare good set of numbers on account of increasing Aquarius and high realizations of non cotton segments like rice and maize. Increased volumes of non cotton hybrids have resulted in good realizations which have been well reflected in the overall revenue growth.
The increase in contribution of new products of volumes of cotton will have major impact in the quarters to come. In our overall cotton revenue growth. Rice, maize and vegetable segments continue to grow both in terms of acreages revenues. So as realizations in spite of restrictions in hybrid rice sowing in Punjab we had delivered good set of growth in hybrid rice revenues. We have witnessed it kind of substantial increase in revenue growth as compared to volume growth across all non cotton segments like rice, maize and vegetables which would continue in the next years to come. Revenue from operations was at 945.31 crore as compared to 8, not 8.09 crore.
In quarter one 25 registered a growth of 16.99%. EBITDA was at 332.85 crore as compared to 292.79 crore. In quarter one financial year 25 increased by 13.68%. Net profit was at 316.50 crore as compared to 282.91 crore and registered a growth of 11.88%. Key Highlights the contribution of new products of volumes of cotton up from 12 to 34%. Cotton sales impacted by increase in illegal cotton Increase in Cost of production of cotton feed impacted the profitability. Hybridized volumes increased by 6.48% and revenues increased by 32%. Hybrid rice restricted in Punjab affected the sales in that state.
Selection by Volumes increased by 1.5% and revenues increased by 11.58%. Maize volumes increased by 21% and revenues increased by 54%. Vegetable seed volumes increased by 28% whereas revenues increased by 41%. Volumes of non cotton hybrids increased by 8% and revenues increased by 31%. Volumes of cotton hybrid decreased by 15% and there is corresponding decrease in revenue. I would now open the floor for Q and A session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. [Operator Instructions] The first question comes from the line of Siddhant from Goodwill. Please go ahead.
Siddhant Dand
Hello. Yes, hi. My first question was. You know when you refer to the cotton illegal seeds, are these largely BG3 seeds?
C. Mithun Chand
Yeah, basically illegal BG2RRF seed. That’s what you call anything else.
Siddhant Dand
Okay. Any Update on the PG3?
C. Mithun Chand
Not yet. Not yet, but it’s. It’s been positive. Anytime it should come by seeing the growth in this type of illegal cotton, even the government authorities are a bit worried about it. And even formats for new technologies. We have a continuous dialogue with the approving authorities. So anytime we may expect it.
Siddhant Dand
Okay, Any update on non cotton GM seeds or testing?
C. Mithun Chand
As of now the testing is going on but not much. What we think is that initially first thing will be the cotton segment because which is already approved in the market and non cotton segment may take some more time to get the formal approvals.
Siddhant Dand
Okay. The non cotton growth that we achieved this quarter. Firstly congratulations on that. Secondly, do you think this will sustain at this rate for the next few years or maybe a lower rate?
C. Mithun Chand
Definitely. What we think is that non cotton segment should be in and on the 20% growth levels going forward. As we see a crazy increase in maize and even we see a rice market to go up this time. Rice. Even though rice market grew when compared to previous year, majority of the market was in this varietal speed. Not in the hybrid segment. But definitely what we anticipate is that definitely they move to hybrids. Will definitely see as an industry as a growth. We see both Acreages coming up in both maize and hybrid rice. Whereas Kaveri we are well placed in maize.
We have very good pipeline hybrids which are coming in which are for the. Not only for the present segment which are. We are already working on the segments which we are not there even in rice. We are working on the segments where we are not there. So we have very good pipeline at this in those segments. What we think we believe is that going forward 20% here and a 20% growth in non cotton segment is very much possible. I’m coming back to cotton by seeing the base what we have. Even last year we said that we have a low base.
We will not go back but be. But the legal cotton has gone up this time and the acreages are also slightly down. That has impacted the sale. But the plus point in our sale this year is that even though we have decreased in our sale but the new cotton contributions have gone up in compared to the previous year. So those are the hybrids which are doing well. So definitely we think that even in cotton we see a good growth coming. We just got delayed by a year or so. But we are pretty confident about the cotton growth.
And overall when we see the company like 15 to 20% growth going forward for the next three to five years looks pretty much possible.
Siddhant Dand
Okay. Within the cotton is the illegal seats productivity higher than the BG2 seeds that we are selling right now or the industry is selling right now?
C. Mithun Chand
Right now what we anticipate is that it’s our company’s internal thing may differ from other companies. But what we see the 20% of the market is under illegal BT now.
Siddhant Dand
Okay. No, I’m talking about the productivity of those seats. Is it better than. Because why are.
C. Mithun Chand
No, we need to watch it now we have seen a mixed result on that but it’s still the crop is on the ground. We need to get see the result. But anyway the government is also acting very harsh now they have witnessed this type of growth. We all as a association we all represented saying that it will harm the farmer going forward because they don’t know what sort of seed they are putting in. So that that’s it. That’s also will impact deal going forward. So I think that will be corrected.
Siddhant Dand
Perfect. Last question before I join is what is that dividend cash payout policy? Because I think we’re sitting on all time high cash and we had a buyback policy before now what is it going forward?
C. Mithun Chand
Not at the whole time because as we have produced more inventory this year my majority of the cash is there in the inventories which will be we have in the next few more quarters, coming quarters. But as of now we are not taking any decision on the buyback policy. Dividend will be definitely there. We’ll come back with the policy once we have the discussion on it.
Siddhant Dand
Okay. And because you’re sitting on all time high inventory, do you expect some inventory to get written off or not really.
C. Mithun Chand
Whatever inventory we have produced is all new Inventory written off is always a part of the system. So we don’t see any sort of high risk in writing it off as of now. But the stock is not yet returned yet. We have just made a provision. It is reaching the stock. We’ll need to do the quality test and do that. But. But with our experience what we see is that most of these stock is this year produced stock. So usually These stocks lie for 2, 4, 2 to 3 years. So we don’t see that sort of size.
Siddhant Dand
Okay, perfect. Thank you.
operator
Thank you. The next question comes from the line of Amit Doshi from Care Portfolio Managers Private Limited. Please go ahead.
Amit Doshi
Yeah. Thank you. While we say that you know we have a 17% growth that’s on the standalone. When I look at the consolidated number we are in a single digit growth. So is it fair to say that the sales that we have done is lying in as inventory in subsidiary. I mean any clarification that you would want to give.
C. Mithun Chand
So we don’t have any inventories in subsidiaries because whatever we sell is through subsidiaries only. Majority of the subsidiaries. When we see it’s only cotton, not the other crop. That’s the reason you see a single digit growth there.
Amit Doshi
No, still not very clear. So when you say console has 945 crore of sales whereas sorry, standalone has 945 crores of sales and console has around 90 crore less sales. So I didn’t get the cotton part.
C. Mithun Chand
You know what, as for the accounting side, we need to deduct that. But that’s the only thing. That’s the reason you see a single digit growth there. You need to knock off that sale.
Amit Doshi
So. But ultimately as a company including subsidiary we would have done sales of only 50 crores. Right. And not 945 crores.
C. Mithun Chand
Subsidiaries. We have done more sale in subsidiaries. But when we see the entire the source of the seed is from the main company seed. For example, if I sell 700 rupees, if I sell at 800 rupees in cotton there the 600 rupees is registered in the books of Cauvery. Only 200 is based in the Books of subsidy that the reason you. So you see a very small growth debt, only 50 crore sale there. Anyhow, I’ll come back with those anyhow. Yeah, not very clear honestly. I will also try to clarify that. I will also try to clarify that. Regarding the consolidated one. What? In what way? The accounts are trading it. I just will do that.
Amit Doshi
Sure, sure. So in terms of, you know, volume growth and price growth, we have seen significant price hikes in all of the. Except the cotton one. So any particular reason that this time there is no significant demand or some price hikes that we have taken? Anything particular? Because all volumes are grown but the price has grown far higher. So anything on that?
C. Mithun Chand
If you see the last two quarter con calls we were saying that the cost of production is going up in most of the crops. That’s what we have seen here. And we were able to pass on the cost of goods to the farmers in non cotton segment. Whereas in cotton segment because the rise of prices are restricted by the government and there was a lot of inventory, the demand was not that good. So these all are affected in not passing on to the farmer. That’s the reason. Even though we have realized a few rupees, a few tens of rupees more than last year. But the cost of production really have been compared to the last year that has impacted our profitability.
Amit Doshi
Okay, so that is something we can take.
C. Mithun Chand
If you see the decline, we are down by like 1% in EBITDA margins compared to the previous year. Usually when we do sale in non cotton stock the margin should go up. But the. In fact the margins have gone up in non cotton segment but the margins in cotton have dragged a bit. That’s the reason we have seen a diplo 1% in the overall EBITDA markets.
Amit Doshi
Understood, understood. Understood.
C. Mithun Chand
And that’s a very temporary thing. That’s a very temporary thing. This time all the companies have produced more now. Now they should moderate.
Amit Doshi
Okay, okay. Okay. And just earlier spoke about the inventory. Of course we had a very high inventory of, you know, compared to last year. 750 crores. More than 1000 crores. So we. Last time you mentioned, you know, we produced buffer stock. So you, you did mention. But do you see anything significantly, you know, liquidating in the second half in the rally season? And how do you see rally season?
C. Mithun Chand
Definitely the second half will be much better than last year because we see a huge, I mean it’s a very good positivity for maize. And if you see this year also a major crop is made which has Grown by more than 21% in terms of volumes as well. And going forward also maize is a crop which will grow. Vegetables are also grown gone up. And when you see the next three quarters of the second half, basically it should be much better than what we had earlier.
Amit Doshi
Understood. Understood. Any. Any. Any clarity on the tax, you know matter that you know which is still pending or as a hanging with the government.
C. Mithun Chand
As of now, no case is disposed at commissioner levels. I mean the CIT appeals level. If anything is there definitely we’ll inform to the investors and the exchange
Amit Doshi
Anything. At the policy level. So the current assessments are obviously
C. Mithun Chand
Policy level. Not yet. But other industry as an association I am also part of it. They are continuously representing it. And they also want to make a policy but they’re unable to. I mean they are still working on it. But there are many reports which suggest that it should be treated as agriculture income internally. But we are waiting for the policy. We are trying for it. I’m not sure when we’ll get. But we are continuously trying for that.
Amit Doshi
Okay, okay, okay. And for our. We also have crop nutrients as a part of our field. So what percentage of that would be? I mean seed breakup you have given. But this crop nutrient segment. Sorry, we also have crop nutrients segment. Right? Or everything is feed heavy.
C. Mithun Chand
Yes. No, we have a. That’s all comes in the subsidies. But very. That’s a very small part of the business.
Amit Doshi
Okay, okay.
C. Mithun Chand
It would be less than the crop nutrients. Crop nutrients only 45,50 crore business as of now. But even we see a good even going forward in the next three to five years. Even that will also contribute. Many will contribute to the top line. We’re working on the products earlier. Maybe in a year or two. Most of the products and the network will be across India. So we see good activity in those segments. And the other part, what we have done in this year, in the last 12 years even in subsidiaries we were only doing cotton earlier.
But we have many products in R D Because we have already we have expanded our network of subsidy network to other states where we are giving other products which are not there. In Cauvery, for example, if you have two or three hybrids in Cauvery, one of the hybrids are given to the subsidiary so that we can market all the hybrids. Because in a company we can’t market all the hybrids at a go. So we are already expanding those networks. Even in subsidiaries will also do very good business going forward. Both important and non cotton segment. Earlier. Earlier in the last 10 years it was only pure cotton Segment.
Amit Doshi
Okay. When I look at other peer segment results, PR company with a research space. So they have also done significantly well like you know values. If I take you know more than 35 growth. So this time is it across industry and would you want to say that Cauvery has also done in line with industry or.
C. Mithun Chand
We need to see that. We need to see because this time the industry was tough except for maize in some crops. Most of the crops they were not able to do, for example cotton. No. But whereas Alice their hybrid has done well in northern India. Cotton.
Amit Doshi
Okay.
C. Mithun Chand
But as the industry. Because every company has their own policies initially because some do that in first quarter, some do in second quarter. But as a policy, as a company we take only the liquidated stock as the same and provide everything as returns. Whereas other companies take the policy of 1 10%, 15% or so. Usually this time what we see in the industry is that returns are more than the usual terms. So we need to check for the second quarter result and we can only say what, whatever what they have done. Well because we don’t have a exact idea about the liquidation amount. Once you see the second quarter we can compare first half to first half and then we can draw a conclusion.
Amit Doshi
Okay. Okay. Okay. So thank you. I’ll reach out to you separately on the driving new standalone consolidated and thank you so much.
C. Mithun Chand
Sorry,
Amit Doshi
I said thank you so much. But for the standalone consolidated clarification.
C. Mithun Chand
Yeah, I’ll definitely try to work it on it. I’ll just try to understand.
Amit Doshi
Sure. Thank you so much.
operator
Thank you. The next question comes from the line of Dhruv Sarah from Bowhead India fund. Please go ahead.
Dhruv Saraf
Hello sir. Congratulations on the good numbers. So just wanted to understand what is the R D? So as a percent of sales for the quarter.
C. Mithun Chand
So last year the entire revenue expenditure of R D was close to 60 odd crores.
Dhruv Saraf
Yeah.
C. Mithun Chand
This quarter it should be in the same line 15 to 17 crores and capex of like capital expenditure extra and above that because we have constructed almost like it’s already done again invested like 50:45 to 50 crore in new R D plan. Today. Today the it was the opening of that plant, that center R and D center.
Dhruv Saraf
So you see around 14 crore of deprecation in the first quarter. What is you’ve seen around 14 crores of depreciation in the first quarter. So sir, what should we assume this run rate as well going ahead or will depreciation increase?
C. Mithun Chand
Yes, maybe for a year or so. This run rate year or like for next 12 to 18 months. This should go on because we have set up a new office. So that also was capitalized in the last quarter. If you see last quarter the depreciation was 14 crores. This quarter it is 12 crores. So it will continue for next 5, 6 quarters. Then it should, it should be done.
Dhruv Saraf
We don’t expect for your depreciation to increase from these levels in the next few quarters.
C. Mithun Chand
Because we have setting up because the R D plant has come into. So we will be starting this R D plant here. So the depreciation, that’s what the. Both last year and this year the depreciation altogether should be like 49 crores per quarter. 12 to 15 crores should be there per quarter should not go up. 12 to 15 crores should be per quarter and it will not go beyond this.
Dhruv Saraf
What is, what, how, what is the visibility you have on the export business on the Bangladesh sales?
C. Mithun Chand
Compared to last year we see a lot of positivity in Bangladesh. Not only in Bangladesh, in other countries like Tanzania, Vietnam, Philippines, we have already imported, exported to some extent compared to previous year the export will definitely have a 30 to 40%. But last year the base was very small again. But whatever this, whatever we are growing this year that will be the base. And year on year we see a good growth in exports also because most of the products are accepted in new countries also which we are testing for last three to five years.
So some quantity we are already exported this year. And this quarter also the running quarter also we have done some sales.
Dhruv Saraf
I had a question on cotton. So you’ve seen the new products perform well in the market and you know, you scaled up almost 10 lakh packets of new products. So, so, you know, going ahead in FY27 28, how do you see the mix changing of cotton? Do you assume that. Should we assume that, you know, new products in cotton would be most of the trade going ahead? Are you confident of that?
C. Mithun Chand
If you talk about FY28, 80 to 90% of the products will be from the new.
Dhruv Saraf
Okay.
C. Mithun Chand
80 to 90% of the revenue from will be new products.
Dhruv Saraf
Sure, sure. All right. All right. I’ll come back in a few times.
C. Mithun Chand
Yeah.
operator
Thank you. The next question comes from the line of Krushi Parekh from Bugle Rock pms. Please go ahead.
Krushi Parekh
Yeah, hi. Sorry first of all for the background noise, but we had this substantial jump in the inventory, about 40% in the March quarter. I mean the sales revenue jumped only about 17 odd percentage largely because of this portion or.
C. Mithun Chand
Well, sorry, in between, I was, I was missing you what you. What’s your question?
Krushi Parekh
Yeah, my question is that we saw a jump in the inventory during the and the revenue for this quarter jumped by about 70, not percentage. So is the mismatch because of cotton. Seeds only or because of some other seeds as well?
C. Mithun Chand
So we have produced all seeds. If you recollect last year call also Concord when we had a match for the result, we said that we have intentionally increased the inventory. One is we are anticipating good season. And second thing is we want to maintain some buffer stock because this time we failed inventory crunch and we lost some sale that is last year. So we have produced more and strategically and we are keeping some as buffer stock. Yes, cotton. As for our anticipation, we thought of doing better but we have not done well. The cotton inventory is slightly higher than compared to our.
What you say like our anticipation. But if you see the overall level, if you see cotton as a percentage is only 20% of our revenue. Right. So that will be in line with our inventories.
Krushi Parekh
Okay. And. And typically who would be producing these illegal cotton fields?
C. Mithun Chand
There are many of companies who do it. There are tons of companies. Usually not the big companies, small, smaller companies.
Krushi Parekh
Okay. And considering where we are today in terms of our inventory level. So how will our procurement will be. In the next season?
C. Mithun Chand
We have already given it. We are trying to reduce the inventory because we have not done well to what extent will be successful in that Any other whatever inventory we are given is a new hybrid. So we don’t have any worry about that. But whereas in other crops we are ready to give the production because that all happens in the second half by seeing the inventory level by seeing which variety we need to give based on that. So we don’t see any threat in those non cotton inventories. Cotton it’s right sides a new hybrid. So even though we don’t see any issue in that.
Krushi Parekh
Okay, thank you.
operator
Thank you. The next question comes from the line of Anurag Jain and individual investor. Please go.
Unidentified Participant
Good evening sir. Just to continue on the point of consolidated sales and standalone sales. Last year the consolidated sales were around 8% higher than standalone sales. So for the full year would you expect the same trend to continue that consolidated sales would be like 8, 8% higher than say standalone sales.
C. Mithun Chand
The majority of the quarter is first quarter. But that’s what I said that just need to find out the accounting policy of standalone consolidated. But if you see the subsidiary business and compared to last year that will definitely better than the next second half last year, second half to this year, second half for last year 3/4 to this year 3/4. It will be much better than the last year because as I said that earlier we were only concentrating on cotton crops. Now we are done to the non cotton segment. Non cotton segment usually comes in the second. So that will be my goal last year.
Unidentified Participant
The reason I’m asking this question is because if you look at consolidated sales, the growth is only 7% which is good.
C. Mithun Chand
Yes.
Unidentified Participant
But Standstone sales growth is 17% which is excellent. So you know for the, for the full year what kind of trend would you look at like a 7% growth or a 17% growth, which meaningful number so consolidated.
C. Mithun Chand
I’ll just come back with the accounting policy how they do that. But if you take the standalone process will be much better than the 17% growth.
Unidentified Participant
Okay okay.
C. Mithun Chand
Okay. The next, the next three quarters will be much better than the first. For example, if we have done 17% growth when compared to quarter to quarter one. If you compare next three quarters to next, this coming consequent three three quarters the 17% growth will will be much higher than the 17% growth. Okay and what we think overall, overall. What we think is that right now the 17% growth which is looking for quarter on quarter but year end it should be like close to 20% growth overall.
Unidentified Participant
Okay sir. Okay. And and this then the same trend should be reflected in the consolidated sales too.
C. Mithun Chand
Yes, yes.
Unidentified Participant
Because the consolidated should be higher than. The standalone for the full year.
C. Mithun Chand
That’s what I I just, just come back on the how the accounting of the consolidated number. But definitely the sale will be in terms of absolute figure. The sales will be higher both in terms of the consolidated and in terms of the standard.
Unidentified Participant
Okay, answer the There’s a follow up one of the previous participants that asked that you know where, where are the illegal sheets coming from? So you said that it’s coming from the smaller companies but the smaller companies in India or is it come to coming from overseas?
C. Mithun Chand
Most of the cotton companies are Indian companies this way or no reputed company this done this only smaller companies there are very small pockets. They produce and they cater to their own segments.
Unidentified Participant
Okay sir. And so just to understand the growth rice volumes, growth in rice seed volumes, the sowing area has increased by around 17% across different states as per the commentary in the presentation. But for selection wise the volumes are up by 1.3% and hybrid rice volumes are up by 6.5%. So, so our volumes have grown lesser than what is the increase in the sowing area. So what would be the reason for this lower volume growth? Versus the growth in the sowing area for rice.
C. Mithun Chand
I’ve already commented on this but again I’ll clarify on it. Regarding rice. Hybrid rice remains same but we have grown at 6% in terms of the volumes in hybrid rice. Whereas in other areas the rice ecology has gone up but it all moved to the varieties, not to the hybrids. That’s the reason we have seen a decline. We have remained same.
Unidentified Participant
Okay. Okay. So basically we have maintained our share.
C. Mithun Chand
increased our share.
Unidentified Participant
Yes. Okay. All right. And so for when, when the company says new products for like cotton, we are saying that new products have gone up from 12% to 34%. So what is the definition of new products? These new products are like the products which are launched in last one year or last two years. What, what is the definition of last two years?
C. Mithun Chand
Last year. Last two years. In fact three years you can say.
Unidentified Participant
Okay. All right. Thank you.
operator
Thank you. The next question comes from the line of Dhruv Sarah from Bowhead India Fund. Please go ahead.
Dhruv Saraf
Sir, what is your outlook on the cost of production of going back? You had a tough season there. So do you believe you’ve seen the peak in terms of cost increases or are you seeing further increases for in terms of next season?
C. Mithun Chand
I don’t think so because last year the competition was pretty high among all the companies because most of the companies were down with the inventories and everyone was very aggressive in producing it and the cost of production has gone up. This time the inventories are there and everyone is slowing down on the level of inventories. So I don’t see any like further rise in terms some sort of inflation here, but not the significant rise as like what we have witnessed this year that we may not witness in the coming next two to three years.
Dhruv Saraf
Safe to assume that the margins can expand from your going given the mix has changed.
C. Mithun Chand
Even I said in the earlier thing that going forward the margin should improve.
Dhruv Saraf
Okay, thank you. So I get that.
operator
Thank you. As there are no further questions from the participants and I hand the conference over to the management for closing comments. Thank you. And over to you sir.
C. Mithun Chand
Thank you for any further queries. I can call our investor best and anything. I’ll come back with the consolidated one. Again, thank you.
operator
Thank you for joining the call. For any other information, please be in touch with Ramanaidu from Intellect PR on behalf of Kaveri Seed Co. Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your line. Thank you.