KAVERI SEED CO LTD (NSE: KSCL) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
C. Mithun Chand — Whole Time Director
Analysts:
Siddhant Dand — Analyst
Krushi Parekh — Analyst
Sanjeev Zarbade — Analyst
Harsh Vora — Analyst
Rohan Patel — Analyst
Mohammed Patel — Analyst
Janesh Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Seed Company’s Q3 and Nine Months FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions at the end of today’s presentation. Please note that this conference call will be recorded. Joining us today on this call is Mr Mithoun Chand, Executive Director.
Before we begin, I would like to mention that some of the statements made in today’s call may be forward-looking in nature and may involve risks and uncertainties. For a list of such considerations, please refer to the earnings presentation.
I would now like to 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 three, nine months financial year ’25 earnings conference call. We hope you had a chance to review the presentation of our results, which is also available on our website. I will touch upon the operational financial performance of the company and then open the floor for a question-and-answer session.
Our standalone financial highlights for the quarter three, revenue from operations was at INR154.77 crores, crores registered a growth of 30.63% from INR118.47 crore in-quarter three ’24. EBITDA was at INR25.09 crores, registered a growth of 12.77% as compared to INR22.25 crore in-quarter three financial year ’24. Net profit were at INR15.04 crore as compared to INR11.66 crores in-quarter three financial ’24, growth — grown by 29%. For the first-nine months financial highlights.
Revenue from operations has registered a growth of 6.3% from 6.3% to 1,044.61 crore as compared to INR981.89 crore in financial year ’24. EBITDA was at INR324.78 crore as compared to INR321.13 crore, registered a growth of 1.14%. Net profit was at INR294.46 crores as compared to INR290.22 crore, grown by 1.46%. Cash on-book stands at INR499 crores.
Operational highlights, rice and may continue to do well during the quarter. Increase in volumes in both selection, hybrid rice and may that resulted in good growth rates on account of good realization and passing of increased. In-spite of continuous disruption in exports, we continue to maintain growth in our profits at both EBITDA and PAT levels. Average rice volumes increased by 14% and revenues by 27%. Selection-wise volumes increased by 18% and revenue increased by increased by 34%. Volumes increased by 8% and revenues increased by 25%. Volumes of cotton hybrid decreased by 35% and revenues decreased by 27%.
The contribution of new products to volumes of Bajra was up from 60% to 70%. Vegetable seed sales volumes increased by 2%, whereas revenue increased by 3%. Export sales stand at INR18.23 crores as compared to INR38.1 crore in financial year ’24. The decline is due to political interest in Bangladesh.
I would now open the floor for question-and-answer session.
Questions and Answers:
Operator
Thank you very much. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephones. If you wish to remove yourself from the queue, you may enter star and two. Participants are requested to use on the handsets while asking a question. We will wait for a moment while the queue assembles.
The first question is from the line of Sidhat Dant from Goodwill. Please go-ahead.
Siddhant Dand
Yeah, hi. For the nine months, you know, I’ve noticed that we are — our product mix has shifted largely towards non-cotton with 26% growth there and de-growth of 27% in cotton. So why has there not been a gross and an EBITDA level margin improvement considering non-cotton products are a higher-margin in general?
C. Mithun Chand
Usually this time the cost of production was also higher in most of the crops — as it was — as the other expenses, if you see cost of goods remain same most of the time, slightly increased, but other expenses also has gone up in terms of the employee cost, all have added up to that as the revenue is flattish on a year-on-year basis, we see a slightly decline in EBITDA margins, which usually shouldn’t be. But it should be correct the years. And this time it was a very, very-high production cost was also there, both in terms of the cotton and in terms of the crops, right? So that has slightly impacted the margins of the company.
Siddhant Dand
Okay. And do you expect this to continue going-forward, the higher-cost of goods sold?
C. Mithun Chand
No, that we are trying to pass it on to the commer as we increase our revenues that everything will be stabilized.
Siddhant Dand
Okay. My second question was on new products within cotton. What is the status of our newer products? And will we see commercialization in next year? And can we expect cotton to have bottomed-out this year?
C. Mithun Chand
Yeah. We can think of that. We have launched couple of hybrids in cotton. We have already launched its commercial aiming to say, not in the pipeline. We have launched and tested some hybrids. They are looking very promising. We think that we can definitely grow in cotton as well and this should be bottom for bottom year in cotton.
Siddhant Dand
Okay. That’s correct to hear. And thirdly, I wanted to ask you about the payout policy. Last year this time we had done a buyback, but is that still on the car with the new tax regime or are we going to shift to dividends?
C. Mithun Chand
We need to think of that. We are not discussed in the Board because it’s not even one year now. I’ll just discuss on that. But again, that’s a Board decision. With the new taxation, we need to see what’s best. Once we decide in the Board, we’ll come back to you all best.
Siddhant Dand
Okay.
Operator
Thank you. Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter star followed by one on your touchstone telephones. The next question is from the line of from Rock. Please go-ahead.
Krushi Parekh
Hi. I want to understand now that we are in the inventory gathering the inventory gathering season right now, how is it looking as compared to these previous years in terms of volumes and in terms of value as well? I believe you mentioned that cost of production has been going up, but how are we looking to ensure we have enough inventory in terms of volume as well for the growth purposes?
C. Mithun Chand
So in terms of the production compared to previous year, we are slightly comfortable this year. In fact, we have produced more compared to the previous year. We wanted to maintain some buffer stock as well going-forward.. So the — as of now by at this particular point of time, we don’t see any threat for our production. As crops are arriving now, but still there are other one or two months which are left out, especially for paddy. So if we get any unseasonal rent, that should slightly impact. But as often we are very comfortable and then play, we should not see any difficulty in terms of the production aspect.
In terms of the cost of goods, yes, the cost of goods have gone up and slightly even now in the Rabi also the cost of goods have gone up, but we are trying to pass it on to the farmer and that we have done something in Rabi and for the next year, definitely we can pass it on to the farmer.
Krushi Parekh
Okay. Any color on how much the cost of production has gone up?
C. Mithun Chand
Based on hybrids and based on different crops, it has gone up, usually the cost of production is up by 5% to 10% in most of the crops. I mean some crops is more than 10%.
Krushi Parekh
Okay. So except for maybe cotton, which continues to remain a bit regulated, we are looking to sort of pass-on the cost as much as.
C. Mithun Chand
Cotton slightly difficult because it’s — the government need to increase the prices, that’s it we pass it on the farmer. But end-of-the day, these are very temporary issues. It’s like it’s all-in the business here and there, but we can definitely maintain our margins.
Krushi Parekh
Okay. And how long does it take for us to get some kind of a realization increase from the government?
C. Mithun Chand
That again depends. Every year they are increasing this year also this they need to take a decision and still the time is there up to March, most probably they take-in the month of February and March. So this time is there, we need to see. We need to wait-and-watch for that. But they also know the costs have gone up by considering that usually they increase the prices, but being a government policy it’s not correct for me to comment on it, but they take into consideration everything.
Krushi Parekh
Okay, okay. Can I continue with one more question or there is a queue.
C. Mithun Chand
Take it. Can you tell me that? I can.
Krushi Parekh
Okay. So in terms of the new product launches, okay. I mean, I believe the Bajra, you mentioned that about 60% 70% are the new of the new ones, okay. And similar traction we are witnessing in the rice as well, right? So how much of — if we just want to try and understand that how much better are we as compared to the competitive products in terms of yield or the benefits, what is the internal benchmarking that we are looking at? Is it — are we at par, are we at significantly better as compared to the competition that we have?
C. Mithun Chand
Most of the times, not only for for the entire industry, if you give a or on-par hybrid, you may not get any market-share. You need to show some benefit towards the existing one, then only the farmer will shift or purchase your seed. So in that way, we see the growth it definitely shows that the farmer is interested to buy our products. That’s what is reflecting in our sales.
Krushi Parekh
Okay. So this increase in hybrid price and selection rise by volume, is it more of a reflection of the products being better or that.
C. Mithun Chand
Yes, yes. That’s what we need to see.
Krushi Parekh
Okay. Okay. Or is it also a function of that we have made them available.
C. Mithun Chand
It’s a combination of all. The top priority is for the performance of the average, then the availability of the product, your reachable comes in that 30% to 40%, but more than 50% to 60% lies with the performance of the hacket.
Krushi Parekh
Okay, got it. Okay, got it. And in terms of exports, how are we shaped up now, especially that now is I mean what we have seen thus far has been little volatile for us and now that we have also set-up an office in Bangladesh, so apart from Banglade — so Bangladesh is one and then I think even in Africa, we were looking to make some inroads. So how is that?
C. Mithun Chand
So when compared to last year, we are down in export, but last year we had done INR65-odd crores in terms of export, wherein 35 — close to INR35 crores was from Bangladesh and 30 from other countries. Even in other countries, it was from Tanzania, majority of the sale where we got government order. Last-time itself, we told that it’s a one-time order, we may not expect this, but the normal organic growth we can — we thought that we will continue. But during by seeing the political situation in Bangladesh, we had done more than INR20 crores itself in Bangladesh. So. So that’s the reason we have seen it then. But going-forward, we see a very good market for exports. So we have expanded to many other countries that will eventually result in revenues in the next two to three years. So we are pretty confident of our exports and most of the hybrid where we have taken trial in other parts of the world are very promising and aggregated.
Krushi Parekh
Okay, got it. And the cotton prices have been flattish to even a bit decline. I mean a bit muted as compared to say last year. the cotton prices.
C. Mithun Chand
Commercial prices you’re talking about?
Krushi Parekh
Yeah, the commercial cotton prices. So do we expect any shrinkage of acreage in cotton because of this?
C. Mithun Chand
No, I don’t see, but even in the even the central government was also taking initiatives to you see the budget right they were they want to give support to the cotton in the textile people, but we don’t see any decline in cotton as of now. It should remain as it is. Maybe 5% plus or man based on the monsoon, but we don’t see any decline anywhere like something severely will afford the quarter register go down.
Krushi Parekh
Okay. If there is no one in the queue, may I continue?
C. Mithun Chand
I don’t know.
Operator
Can we request you to come back-in the queue? I will. I will. Thank you. Thank you. The next question is from the line of Sanjeev from DreamLadder Investments. Please go-ahead.
Sanjeev Zarbade
Thank you for giving me this opportunity. My first question is, what would be the outlook for in the next two quarters?
C. Mithun Chand
Next two quarters?
Sanjeev Zarbade
Yes.
C. Mithun Chand
4th-quarter is a very insignificant quarter for us. We don’t have any change in that. But for first-quarter is the main quarter for us that is for the next year financial year. We see very good growth in Mays, like at least by 10% to 12% growth in terms of the volume for the next year. And decreages are also going up while the crop also made looks very good going-forward.
Sanjeev Zarbade
Yeah, I have two more questions. First one is when will you see breakout adoption in.
C. Mithun Chand
The adoption is really slow. It did not go the way what we thought, but if you see the seed replacement ratio has gone up in rice also, it was like 25%, 30% like 12, 13 years back, but now it has moved to 60%, 70% now. That’s really encouraging the first step to go for hybrid. So going-forward, if we have hybrids in the right segment, definitely I think the hybridization will be very fast and most of the companies are coming with those type of hybrids, including. So we don’t — we — as of now, I can’t say that exactly how fast will it grow, but definitely eventually it will move to hybrids.
Sanjeev Zarbade
Okay. And is there any progress on HTBT cotton from government in?
C. Mithun Chand
It is much positive when compared to three years back. The — it’s moving on, we can expect any time after — but again, we are not able to time it, but the government response is encouraging in terms of the new technologies.
Sanjeev Zarbade
Okay, sir, that’s it from my side and thanks for answering the questions.
C. Mithun Chand
Thank you.
Operator
Thank you. Participants with questions may enter star and one on their phones. The next question is from the line of Harsh Bora from DR. Please go-ahead.
Harsh Vora
Yeah. Hi, sir. Good afternoon. I have one question regarding the — what do you expect to be the growth rates for the next two years at both sales and PAT level?
C. Mithun Chand
We think that we can grow at 10% to 12% at the top-line and 15% to 20% at the bottom-line. This year was — we couldn’t grow in that way because of the cotton and the increase in the production costs. But going-forward, that should continue. That’s a broader guidance what we do.
Harsh Vora
Okay. And any investment on expanding capacity that you have planned?
C. Mithun Chand
That’s a continuous activity. We are already doing it. Again, we are constructing other passing line and where else is, but in terms of — in terms of the capex, year-on-year INR30 crore to INR40 crores should be at a very-high for the next two to three years.
Harsh Vora
Right, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Rohan Patel from Turtle Capital. Please go-ahead.
Rohan Patel
Yeah. Thanks for the opportunity, sir. I wanted to ask like on the new seed share in — like if you can give us the proportion of what are the contribution of new seeds in cotton, hybrite selection rise and for this year?
C. Mithun Chand
Sorry, I was — sorry, I couldn’t hear you properly. What is the contribution?
Rohan Patel
Yeah, sure. I will go-ahead. Contribution of new products, basically new seeds to volumes in-quarter hybrid right, selection, rice and meal, like contribution of new products.
C. Mithun Chand
Contribution of new products.
Rohan Patel
Yeah. What is the contribution.
C. Mithun Chand
I don’t have the exact figure as of now, but contribution in most of the crops except for cotton and all the other crops like it remains in-between 30% to 40%. Cotton contribution is slightly lower because most of the hybrids are pretty old hybrids. So cotton it should be like 10% to 15%, but other crops are in-between 30% to 40%. I don’t have the exact figure, but usually that change is in that figure.
Rohan Patel
Okay. And going-forward for next year, considering that cotton is at a lower base and we are — like last quarter, you said that it can grow at, 15% 20%. So how much would be the contribution of new products in that growth for us?
C. Mithun Chand
In terms of the cotton, whatever we are talking about the growth, majority of that will be from the new products.
Rohan Patel
Okay. And then for other like non-cotton products, how will this new product share improve?
C. Mithun Chand
And because most of the hybrids are very new in our terms, we say like-new products are nothing but zero to four years in terms of our — in our reporting. So most of the hybrids are new hybrids. If some hybrid move from zero to four years, another hybrid may contribute, but usually it should be like 30% to 40% going-forward as well, because every new hybrid comes in and another hybrid goes out. So we say like zero to four years is only what we say at said contribution from your hybrids.
Rohan Patel
Okay. And can you explain us like how will we — like we are growing topline at 10%, 12%, that’s fair enough like considering our product portfolio. But how will the margin improve from here on, like it will be like price increases or like better-quality, high-margin.
C. Mithun Chand
When I say the revenue of 10% to 12% is a combination of price and the volume. But as we grow — as we increase our sales, the other costs also get optimized. So the EBITDA levels, we can definitely increase our margins.
Rohan Patel
Okay. So this would be more from — coming from higher scale rather than high-value product or increase in.
C. Mithun Chand
We are already there because as we are already passing on to the farmer, all the production cost is also up. So may not be immediately in a one or year or so where we can pass it on the entire cost. But overall with all the other things contributing to it, we can go in that fashion.
Rohan Patel
Okay. Yeah. That was from my side. If I have any more question, I will get back to the queue. Thank you.
Operator
Thank you. The next question is from the line of Mohammed Patel from Care Portfolio Managers. Please go-ahead.
Mohammed Patel
Sir, what was the regulatory price increase given by the government in last year for cotton in percentage terms?
C. Mithun Chand
Yeah. In terms of the, it was like 1.5% or two. I don’t remember that selling price is like INR85 now. It was from INR845 or INR840.
Mohammed Patel
And what was the increase in cost of production for cotton disc?
C. Mithun Chand
Our cost of production has gone up somewhere in-between days and the hybrid went in-between INR50 to INR100.
Mohammed Patel
Okay. So do you think that the — this time around, the increase will be higher than 2%, 3% from the government side?
C. Mithun Chand
If you take the previous — not for the last year, but if you take the previous year, it was like close to 5% to 7%. Certainly, the prices have moved up last year and that we have already represent to the government saying that the prices have moved up, but they need to take a call. So it will eventually — eventually what may not be this year or so, but eventually they need to increase the cost because that is the way that the cotton seed industry may not survive. So that they have everything — they keep everything in the back of the mind and then decide on the price.
Mohammed Patel
So it will be lower than the cost of production increase, then there will be pressure on cotton margins for FY ’26.
C. Mithun Chand
But definitely there are — there will be pressure in the cotton margin, but the other crops will be doing well, so that varies it as an overall basis we should maybe not be that much assessed. Okay. My next question is, you said seed production is good as compared to last year, but if you can answer separately for non-cotton crops, what is the growth? And for cotton, what is the growth of production of seeds? Across-the-board, across all crops, we have increased the production both in terms of the cotton and non-cotton segment. Our production will be definitely higher like 25% to 30% more than the last year.
Mohammed Patel
Across all crops.
C. Mithun Chand
Across all crops.
Mohammed Patel
Okay, okay. Okay. And for which crop you said the cost of production is higher by 10%. That is cotton.
C. Mithun Chand
One is cotton given rice, some parts of.
Mohammed Patel
Okay. So rice, we should be able to pass it on, right?
C. Mithun Chand
Yeah, because this is not controlled with the government, you are already doing it. For example, Ravi, we are slightly started passing on to the pharma. Next year we’ll definitely pass-on.
Mohammed Patel
Okay. And you said cotton new product contribution is right now 10% to 15%. So in the next two few years, are you expecting this to increase to, 30%, 40% like the crop?
C. Mithun Chand
Definitely, definitely. In fact, right? The next two to three years, majority of the contribution to the revenues will be from the new products. But definitely that will also go to between 30% to 40%, 50%. So at an average, any given point of time, what we see, what we are basically looking at in the previous years and most of the crops, the contribution from the new crops are in-between 30% to 40% across cotton it might go up because most of the crops are most of the are very old. For example, in Bajra, it looked like 60% 70% because the base is very small. As you increase the base, definitely the contribution will be in-between that 30% to 40%.
Mohammed Patel
So you’re saying next few years quarter should do well, non-cotton should do well. Overall, I think next few years are looking much better than the last two years.
C. Mithun Chand
Yes. Yes, exactly.
Mohammed Patel
And on the exports, is it a higher-margin business?
C. Mithun Chand
Yeah. It margins, we can relate it to the normal margins here apart from few countries of some stock, but otherwise other crops are profitable. Very few occasions we sell at a very low-price, but otherwise, okay, for example, last-time we did then yeah, but we wanted an entry so that we are given at a lower-price. But usually when we sell-in a normal open markets, we maintain our margins.
Mohammed Patel
Okay. So you still stick to the INR150 crores INR200 crore guidance for exports in the next few years?
C. Mithun Chand
Three to five years, yes, definitely between close to INR150 crores, I can see three to five years.
Mohammed Patel
Thank you.
Operator
Thank you. Ladies and gentlemen, if you have any questions, you may enter star and one. The next question is from the line of from Agar. Please go-ahead.
Krushi Parekh
Yeah, hi. So one thing is, I mean, I just want to clarify, the inventory volume growth we are expecting in the March will be somewhere around 10% is what you mentioned, right?
C. Mithun Chand
It will be more than that, but it may not be — it depends on the arrival of the crop, may not be exactly by March-end. It should be before March or after March that depends on the crop arrival. But across — across the previous year we can see at least 20% more than 15% to 20% more than previous year volumes.
Krushi Parekh
In terms of volumes.
C. Mithun Chand
Yes.
Krushi Parekh
Okay. And so we were talking about this rice hybridization, it’s not picking-up. Can you — can you give some sense on what are the bottlenecks of that the industry is facing or even we are facing that is stopping this hybridization process.
C. Mithun Chand
So basically when we try to introduce a new variety or a hybrid, it should do better than the existing one. In right, the existing varieties are doing well and across the industry, we were — we are not having a having slender — standardized hybrids. Most of that are in bold drives. Now the pipeline hybrids are coming in standardized. Once it comes in, it mat it up.
Krushi Parekh
Okay. So basically what you’re suggesting is that the product is not that — I mean, it’s not much different.
C. Mithun Chand
Yes.
Krushi Parekh
And even in terms of yield or just the product.
C. Mithun Chand
Everything, yield and sorry, both. And whenever we are able to show better in than the existing varieties, there the hybridization much faster. And now the most of the rice has moved to the rice segments. For example, in Southern India, we don’t see much of an hybridization except for the Northern India. And so basically currently, even our offering is not that materially different versus what is available in the market currently. Yes, most of the players are in the same segment, but the new pipeline hybrids are coming in the same segment for us.
Krushi Parekh
Okay. Okay. And one last question. So in terms of adding our distribution, how are we placed? So I believe in most of the states of India, we are now present in terms of expanding our reach and making our products available, how are we placed this year as compared to the previous year and how we are likely to be in next three to five years?
C. Mithun Chand
In terms of the network, we have got one of the largest network. As I said, we are there in more than, 25 24 states across India. We have the largest network in terms of the distribution, in terms of the of network across India. We have a complete reach of most of the places where we operate. In terms of adding of new dealers may not be that significant because we are already there in most of the segments. But wherever we have left behind some segments where our products are there, where we might have, but that will be very negatively usual when compared to the existing ones.
Krushi Parekh
Okay. Okay. So basically whatever growth we are likely to expect is from the new launches and introducing more products in the same segment?
C. Mithun Chand
Yes, most of that will be for the dual launches and very — very little from the area where we are not.
Krushi Parekh
Okay, got it. Thank you so much.
Operator
Thank you. The next question is from the line of Siddharth Dan from Goodwill. Please go-ahead.
Siddhant Dand
Yeah, I had one follow-up question. You know, could you just comment on why BT3 cotton has not yet come into India? And has there been any progress on that or is it still, you know stuck in.
C. Mithun Chand
The trials or almost complete, almost complete. It’s been long waiting for BG3 OBG and it is waiting the government approvals. But compared to two, three years back, now at least the government is much positive and they are still trialing on it and the discussions are happening. So we are pretty — I mean like — we see that it might come any time. But that’s what — that’s why I was saying for the last one and a half years. Yeah, there’s some progress. Like unlike in the previous years, it was completely stall. That’s not the case now.
Siddhant Dand
Okay. And what about pricing over here? Is there any — is there a similar price cap we can expect in BD3 or there’s nothing out there?
C. Mithun Chand
Yeah, price cap will be there, but again, the price will be negotiated by the provider for the government and the players.
Siddhant Dand
Okay. That’s great to hear. And anything else on other GM crops in terms of trial?
C. Mithun Chand
No, once it need to — I mean, most of the crops also the trialings are happening. But first of all, BG3 need to be clear, then the other crops first crop because we will be.
Siddhant Dand
Okay, that’s correct.
C. Mithun Chand
But the trialing — most of the trialing and the data is already provided with the government timely service providers, technology providers.
Siddhant Dand
Okay. That’s great.
Operator
Thank you. The next question is from the line of Rohan Patel from Turtle Capital. Please go-ahead yeah.
Rohan Patel
Thanks for the opportunity again. First, I want some data points like how many packets of cotton we have sold this year and the revenue that we have generated?
C. Mithun Chand
Now cotton — we are sold around one second. We are sold around 35 lakh packets, 35 36 lakh packets. The revenue is INR258 crores.
Rohan Patel
Okay. And sir, can you provide us with market-share in like — regarding cotton in Gujarat, Maharashtra, Telanganda, Andhra Pradesh and UP and Madhya Pradesh? Like there before.
C. Mithun Chand
That we have the highest market-share in Gujarat because this year was a low-base or we have close to 20 odd percent market-share in Gujarat. In other states in-between like 5% to 10% market-share.
Rohan Patel
So we have probably lost our market-share significantly from Maharashtra as well as Telangana, Andhra Pradesh, if we see that?
C. Mithun Chand
Yeah. See, we have done only 36 lakh packets of a total market-share of close to INR4 crores so hard. So we are in-between that 8% to 10% market-share now. So earlier we used to be with that 15%, but this year we lost. If you take the last year sales, we were like 55 lakh tickets, which is close to like saying that, 13% 14% market-share.
Rohan Patel
Okay. And what was the main reason? Like were we lagging behind with hybrids or like there was a pricing issue or new players that have come in and sold or penetrated.
C. Mithun Chand
It’s a combination of all. One is that it was pretty old habits. There are some other competitive hybrids which are doing well. The other thing is available to us also low and we were trying to realize more from the competition when compared to the competition. They’ve all contributed for a. but we were pretty conscious what we are doing about and now when we talk about the going for the future, we say that our new hybrids are coming up, which we already tested and sold-in commercially sold-in the market. So those are really performing well and we see good sale-in those types of hybrids.
Rohan Patel
Okay. So considering that now we will be having our new hybrids back. So can we think about that growing this from, say, 37 lakhs to again to say 60 lakhs or about 55 lakh 60 lakhs?
C. Mithun Chand
Definitely. In the next couple of years, definitely, there is a we are looking at. In fact, if everything goes right, we can go back to a peak levels which were like that 8 million packets in the next five to seven years.
Rohan Patel
So in next five to seven years, back to 8 million packets. Okay.
Siddhant Dand
Yeah. That’s our internal target, but we’ll again update you in-between. But for the next couple of years, we’re definitely see the growth two to three years.
Rohan Patel
Okay. Yeah. Thank you.
Operator
Thank you. Participants, if you have any questions at this time, you may enter a star followed by one. The next question is from the line of Janesh Shah, an Individual Investor. Please go-ahead.
Janesh Shah
Yeah. Thank you for the opportunity. I just have one broader question, maybe related to the macro kind of question. Basically, you’ve seen the weather patterns have been changing and even in India for last couple of years, the monsoon has been very. So how are you planning to — or I mean, how do you see this change impacting your business, whether positively, negatively? And how do you see, I mean, the farmers adopting or changing their behaviors with regard to your seeds or maybe any other products or any other segments which may see a kind of a change in adoption or the practices? Thank you.
C. Mithun Chand
See, if you see the last 10, 15, 20 years even more than that every year the climate is changing. As you rightly said, we have erratic monsoons and not only monsoons like a very unseasonal rains which are really damaging. So definitely affecting the cropping pattern and more than the crop, because usually what happens most of the time the farmers sow at the initial. For example, once we receive the rainfall in ranging from May to July across the country, once the soil is — has got enough moisture, they try to sow the seeds and harvesting accordingly duration of the crop. By changing climate conditions by writing monsoons, we are the crops are getting new press, new diseases, new viruses. So that’s what impacting the yields. So as there are new pests and new diseases, we are trying to develop hybrids which are assistant to those. So that’s the reason every time the farmer requires new hybrid. Usually the cycle at three to five years is the cycle of the hybrid, again a new hybrid comes in. So that’s how it goes on. I think that will continue going-forward also.
Janesh Shah
Okay. And with regard to the pricing, I mean, you said cost already up by 5% to 10%. How is the pricing is been marked for especially a situation where we have — like last year, there was not a — like I’m saying there was a deficient monsoon and the rural income general — farmers income generally were under stress. This year has been — the monsoon has been better, but it is on the higher side, I’m saying there is an excess in some parts. I don’t know-how that is going to have an effect. But in general, like how do you price your product and to ensure that the demand — I mean the product is well adopted by the farmer, I mean without impacting their cost of production or maybe any cost-benefit analysis that you can share with us. Thank you.
C. Mithun Chand
There are basically two sets of farmers. We deal with production farmers. Production farmers are nothing but the farmers who produce seed. It’s like we have our own research. We take land non leave and produce our own seed. So for us the cost is like the least-cost, the pesticides and whatever the labor fertilizer, everything comes into our cost and end-of-the day you need to get the better yield. So these are the cost in volume for us.
And usually when, when we do the farming when based on the other costs, the other costs are going up, definitely the seed of seed production cost will also go up and that will be the same for the commercial farmer also commercial farming, I think about where we sell our hybrid seeds and de-grow it on their own and the grain is sold-in the market. So for him also the cost is same. So over and above that the MS, either yields or MSCs have gone up, the cost of cultivation is definitely high. So that’s where the cost of production goes up. So if you get a bumperheel, the cost of production will go down.
Janesh Shah
Okay. So — but the price — your pricing is like a pass — I mean you have a pass-through kind like I’m saying whatever the increase able to pass-on.
C. Mithun Chand
So for example, if you see for example, if I produce a corn hybrid, the remuneration for the normal farmer if it takes corn hydrate like is INR30,000, INR40,000 rupees say for our pharma definitely looks at INR50%, definitely 20%, 25% more than the existing pharma. So that’s how the entire cost looks out to be.
Janesh Shah
Understood. Thank you very much.
Operator
Thank you. The next question is from the line of Parik from Roth. Please go-ahead.
Krushi Parekh
Yeah. Just one housekeeping question. So there was about, 16% 17% jump-in the employee cost. Can you help me understand why this much jump, I believe. I understand revenue has jumped 22% but from about INR35 crores last year and about INR30 crores on an average that we have for other quarters, around INR41 crores jump is something that I’m looking to understand.
C. Mithun Chand
For the entire nine months, you’re talking about?
Krushi Parekh
No, no, for the December quarter.
C. Mithun Chand
And in December quarter, sorry.
Krushi Parekh
Employee cost.
C. Mithun Chand
One, one, there are usual increments what we give and the other thing is count also we have increased account. They both will contribute for the employee cost.
Krushi Parekh
Sorry, you have increased?
C. Mithun Chand
One is account, employee count and other one is a normal increments. Okay. And the employee count is increased in a particular category of employee. So which categories. Across, across, across.
Krushi Parekh
And this is in anticipation of something.
C. Mithun Chand
So once — see, one, we are increasing production that itself shows that we require more people in the production, more people to test and more people to process. Again, again, you require more people to sell it also. So based on the areas on all those things, it all goes up across-the-board.
Krushi Parekh
Okay. Got it. So a raise will be somewhere around 8%, 8%, 9%.
C. Mithun Chand
Yeah, usually like around 8%, 10% right.
Operator
Okay. Thank you. Thank you. Ladies and gentlemen, that was the last question. Thank you for joining the call. For any other information, please be in touch with Mr Raman from Intellect PR on 99202-09623. On behalf of Kavery Seed Company Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.