KAVERI SEED CO LTD (NSE: KSCL) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
Unidentified Speaker
Mithun Chand — Whole Time Director
Analysts:
Unidentified Participant
Agastya Dave — Analyst
Saania Jain — Analyst
Dhruv Saraf — Analyst
Aabhas Verma — Analyst
Krushi Parekh — Analyst
Yashovardhan Banka — Analyst
Nilesh Doshi — Analyst
Presentation:
operator
Ladies and gentlemen, you are connected to the Cauvery Seat Company’s Q4FY25 earnings conference call. Please stay connected, the call will begin shortly. I repeat ladies and gentlemen, you’re connected in the Cauvery Seed Companies Limited Q4FY25 earnings conference call. Please stay connected, the call will begin shortly. That SAM Foreign. Ladies and gentlemen, good day and welcome to Cauvery Seed Companies Q4 and FY25 earnings 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 at the end of today’s presentation. Please note that this conference call will be recorded. Joining us today on this call is Mr. Mithun 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 consideration, please refer to the earnings presentation.
I would now like to hand the call over to Mr. Mithun Chand. Over to you sir.
Mithun Chand — Whole Time Director
Thank you. Good evening and welcome everyone to our quarter four 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 would touch upon the operational financial performance of the company and then open the floor for the question and answer session. Financial Year 25 Financial Highlights Revenue from operations was at 76.95 crore as compared to 80.54 crore in quarter 4 24. EBITDA was at minus 15.31 crore as compared to 10.72 crore. Net profit was at minus 30 crores as compared to 2.79 crores in quarter 4.
Financial 24 Revenue from operations was at 1121.57 crores as compared to 1062.43 crores in financial year 24 grown by 5.57%. EBITDA was at 274.29 crore as compared to 270.43 crores in financial year24 grown by 1.43%. Net profit was at 265.21 crore as compared to 293 crore in financial year 24. Cash and books stands at 556 crores in financial year 25 as against 443 crores in financial year 24. Major Highlights Witnessed good growth rates across all over non cotton segments like hybrid rice Selection, rice, maize and vegetables. Volume growth across segments like Bajra hybrid rice selection, rice, maize and vegetables has resulted in proportionate higher realizations which is very encouraging.
Trend pat for the current year is down on account of one time. Entry of interest of 8.85 crore on the loan given by the company to the employed trust and increasing employees cost of rupees 4.95 crore on account of increase of in valuations of ESOPS even for employees and increase in depreciation of 5.68 crore due to recent addition of a new office revenue during financial year 24 quarter 4. Financial 25 was slightly down because of no one time exports to government of Tanzania. But rupees 24 crores in financial year 25 financially 24. Acquired. Remaining. Acquiring remaining 30 stake in distribution company Aditya Agritech Private Limited for rupees 23.60 crores to increase company stake to 100%.
Some of the operational highlights. The contribution of new products to volumes of Bajra was up from 64 to from 64 to 74%. Hybrid rice volumes increased by 13% and revenues increased by 26%. Selection rice volumes increased by 22% and revenues increased by 39%. Maize volumes increased by 7% and revenues increased by 22%. Vegetable seed volumes increased by 3% whereas revenues increased by 8%. Export sales stands at 22 crores in financial aid 25 as compared to 66 crores in financial A24. This decline is due to political unrest in Bangladesh and there was no one time order from Government of Tanzania.
Volumes of non cotton hybrids increased by 24% and revenues by 22%. Volumes of cotton hybrid decreased by 35% and revenues decreased by 27%. I would now open the floor for question and answer session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and. Two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Agastya Dawe from CAO Capital. Please go ahead.
Agastya Dave
Thank you very much for the opportunity. Am I clearly audible? Yeah. So, congratulations. So how are you seeing the upcoming season? The buildup on the balance sheet indicates. That you guys are preparing for a fairly robust season. But I would like to understand your point of view. What are you seeing in the market and how do you see the season panning out?
Mithun Chand
The season looks good for the coming year. Even the prediction for the monsoon is good. We might get monsoon on time. The acreages at the present looks more or less stable there. Solid pressure on cotton acreages. But we see a very encouraging trend for maize coming up and dry segments. It will be slightly sideways but it should be stable. In terms of our plants, we have built up inventory for a couple of reasons. One, we anticipate a good season. Second thing as we were almost empty with the entire inventory and it was really tough in terms to produce more in these tough times.
So where the strategy wanted to maintain a buffer inventory. That’s one of the reason why we built up the inventory.
Agastya Dave
Understood, sir. So, thank you very much. All the best, sir.
Mithun Chand
Thank you.
operator
Thank you. The next question is from the line of Sanya Jain from CARE pms. Please go ahead. Hi Sanya, you are unmuted. Can you speak?
Saania Jain
Yeah. Thank you for the opportunity. Actually just two questions. What is the expectations of cotton portfolio in quarter one and since our non cotton portfolio has been very well in what do we expect in Expy. 26 considering the high base.
Mithun Chand
Regarding cotton last year we had we were down close to 30% in terms of the volumes. And with the low base we are pretty confident that we will grow in cotton this year. Even though the acreages may not grow. But as a company, as a level we’ll grow with this base. And we are launching couple of new hybrids which we are tested last time. Those hybrids are also doing well. So as a cotton as a portfolio going forward looks very increasing. And the other hand non cotton segment, we have already witnessed a good growth this year going forward.
Even with this high base, we can easily grow with the 12 to 15% growth in this non cotton segment also.
Saania Jain
Okay, got it. And what is the plan for the cash generated from operations?
Mithun Chand
As of now we don’t have much plans. We need to discuss and then come back once we have a concrete plan. As of now we’ll keep cash with us. This time we have seen because we have built up the inventory, most of the cash is getting deployed there. Once we have the real cash then we’ll have a strategy and we’ll let you know.
Saania Jain
That’s it for my friend. Thank you.
operator
Thank you. We’ll take our next question from the line of Dhruv Saraf from Bowhead India Fund. Please go ahead.
Dhruv Saraf
Yeah. Hi Mitun sir. About the cotton price hikes. Government has announced a 4% price hike this year. So is that commensurate with the cost increases that you’ve seen in the production of cotton or how do you see this equation?
Mithun Chand
Yes, this time we have seen a huge increase in the cost of production. The government has increased only by 4%. But there’s a lot of pressure in terms of the cost of production. Not only in cotton, but all other crops. We have seen a sharp rise in the production cost. Whereas in the other crops we might able to pass it on to the farmer. But in cotton, even though the prices they have increased by 4%, it will be really difficult for us to pass it on because there’s a lot of inventory in the system. We might be able to realize good figure in terms of the new hybrids.
But whereas in the old hybrids it may be a little bit difficult. But we, we are trying to push the realizations or try to pass it on some at least some cost to the farmer. But only in the season we get to know.
Dhruv Saraf
Questions, if you may allow. What was your R D spend as a percentage of sales this year? And how is it likely to be in 2026?
Mithun Chand
Yeah, sorry.
Dhruv Saraf
And the second question was that you mentioned that inventory has gone up because you’re keeping some buffer. I could not really exactly hear why this buffer and is this structural like you know, you would want to keep going forward higher inventory as a buffer because you had the experience last year of, you know, non availability of seats to md so is that one should. One should assume that inventory now generally speaking will be higher what it used to be in the past as a percentage of revenues. Thank you.
Mithun Chand
Sorry, what was the last one?
Dhruv Saraf
Should we expect that inventory going forward, you know, like this year should on a structural basis, not like oneof basis should be higher, you know, as compared to it used to be in the past as a percentage of sales, a percentage of cost of production because you want to keep some.
Mithun Chand
In in terms of the R and D cost, the revenue, I mean the recurring expenditure was close to six and a half percent. And in if you. If you add the fixed expenses altogether, it was in between 8 to 9% of our total sales. And in terms of the inventory we have intentionally strategically we have built up the inventory, we will have some sort of a buffer stock as in some markets, as the production arrives very late in the first quarter or the last half of the last quarter of the financial year or the first quarter of the financial year.
So we are missing some markets. So we want to build up those inventory levels and going forward it may not the sudden increase what we have seen this year May not be there in going forward but the inventory levels will be slightly, usually higher than the previous years.
Dhruv Saraf
Thank you so much, sir.
operator
Thank you. The next question is from the line of Abhas Verma from East Green Advisors. Please go ahead.
Aabhas Verma
Sir. Am I audible?
Mithun Chand
Yeah.
Aabhas Verma
Yeah. So I had a question regarding your revenue growth guidance of 10 to 12% for the next two years that you had given earlier. So in one of your calls you had mentioned that the cotton portfolio is expected to grow at around 1520% and the non cotton. And the non cotton portfolio at around 15% plus minus 2% the thing. Yes. So given that could. Could you please help me reconcile how this translates into a lower consolidated growth guidance of 10 to 12%. So am I missing something here or. If you can.
Mithun Chand
Nothing. We were a bit conservative in the giving the guidance. But by. By seeing the portfolio it should be plus 15% non cotton segment with the non. With the big base 15 + or -2%. That will continue and cotton with the small base will year. But when, when I gave a guidance of like 10 to 12 percentage for next three to five years not for regist.
Aabhas Verma
So. So do you still maintain that 10 to 12% or we can expect something higher than that also? Like is it considerable?
Mithun Chand
That’s the minimum what we see. It should be better than that.
Aabhas Verma
Okay. Okay. And just one more question. So when you are giving this 10 to 12% does it include the export guidance of 160 crore as well? Or like have you.
Mithun Chand
Export guidance of.
Aabhas Verma
I mean exports guidance in your. You had given around one.
Mithun Chand
No, what. What I meant is that in the. In the earlier call I gave a guidance in the next five years. In the next five years the export market. Export market can be 150 crores. And even in the same time I’ve even given the guidance of vegetables also close to 150 crores.
Aabhas Verma
All right. All right. So 10 12% is including everything. You have factored in everything into that, right?
Mithun Chand
Yes.
Aabhas Verma
Okay. Okay. Thank you. That’s it. From my side and all the rest.
operator
Thank you. Participants, in order to ask a question, please press Star one. Now the next question is from the line of Khrushi Parek from Bugil Rock pms. Please go ahead.
Krushi Parekh
Yeah, hi. Khurshi Pare here from Bugle Rock PMS. I just want to understand. So we have this 40% jump in the inventory and I understand there is buffer also. So one thing is that what proportion of this can be construed as buffer and what is something that we would expect to be sold in this financial year itself. And also can you give us some understanding on the mix in terms of cotton, non cotton and in the overall inventory, New products, old products, something like that.
Mithun Chand
So we have increased the inventory across all crops. It’s not specific to one crop. We have increased the inventory in cotton and non cotton segments also. There will be close to 20 to 25% of the inventory as buffer stock across all crops. Leaving some varieties we have produced some varieties the most, I mean to say moving hybrids which are in large segment, we have produced more because we can always use it for the next year, wherein the discards will be very low. In that in those crops we have increased our inventories significantly high. And in terms of the cotton also, the inventory is like last year, very minimal.
Now this time it will be like close to 6 to 7 million packets.
Krushi Parekh
Okay, okay. So if you can just give some understanding on what is the proportion of the new products that we have in the market now and how are we approaching it against the competition? Because I believe last quarter you had mentioned that we don’t have products in terms of the yield and everything are pretty much similar to the competition also. But then how are we approaching to grow our products versus that of competition and how are we looking to take on the competition this year?
Mithun Chand
It will be difficult to explain about each market and each product we are doing. But I can give you the guidance. Like in the next three to five years, more than 50% of the revenue will be contributed by the new products. New products in the sense which are already placed in the market, which are already launched in the market for the last one or two years and newly launched, newly to be launched products. These will contribute to more than 50% of our revenue.
Krushi Parekh
Okay, but any sense in terms of. Because how are our products differentiated versus that of competition. That will be the pickup in the market and grab some market share.
Mithun Chand
There are so many variants to do that. Basically end of the day you all it all boils down to yield. But how do you arrive to yield is a different way. One is by like stress conditions, you have to need to perform one like low pest, low diseases. So different crop maturity date. So different crop has got a different parameters to look on. So when we, when we see a competitor hybrid or when you want to increase the market share, we see that it should in that given condition, in that given particular condition higher hybrid need to do give better yield than the existing one and the maintenance should be low.
These are the two factors what we see.
Krushi Parekh
Okay, and then we go on to the Educating the farmers about our differentiation.
Mithun Chand
Yeah, definitely see one, when we launch an hybrid, it should be tested in the farmer’s field only. That’s how we also create awareness program among farmers and show the difference between our hybrid and the competitor hybrid. That’s how we, we increase the awareness and we create demand for that.
Krushi Parekh
So typically this would be one to two year cycle. And then yeah, initially when once you.
Mithun Chand
Launch the hybrid, once you launch a hybrid based on the base, it will take one to three years because we need to market in different areas. So as two to three years is the right time where you get the good visibility, first year will be very small.
Krushi Parekh
Okay, and, and sorry, if I may just continue on this question now. What proportion of our current, you know, products is something that is field tested and new in the given year?
Mithun Chand
What is field?
Krushi Parekh
What, what proportion of our inventory currently is new and is already tested over last one to two years? Across geographies, more than 95% of the.
Mithun Chand
Inventory close to normal. More than 95% of the inventory is the products which are moving hybrids. Because when you launch an hybrid will be very low, the quantity will be very minimum. Once we see the performance, then only we’ll increase the inventory. So that’s what I said in the early call, in the earlier way, the inventory, what we have now, majority of the inventory is from the moving hybrids which are already approved in the market.
Krushi Parekh
Okay, great. Good to hear. Thank you. Thank you so much.
operator
Thank you. The next question is from the line of Yasha Vardhan from Tiger Asset. Please go ahead.
Yashovardhan Banka
Hello Sarah. Thank you for the opportunity. So do you understand what is the gross margin sustainability going ahead?
Mithun Chand
The margins should sustain. The margins this year were like gross margins this year was close to 46, 47%. That should remain same in like 1 2% less or minor because this year we have high inventory cost and in cotton we may not pass on. This year might be slightly stressed. But going forward there are pretty huge chances, high chances that the gross margin should further go up as we will be increasing in vegetables and other crops, Bajra, which are high gross margins. Again, it should go up this year Friday we need to check only because of cotton.
Yashovardhan Banka
Understood, sir. And so. So on the inventory front, how much. Are we expecting to be utilized in Q1?
Mithun Chand
Basically, if you see the trend like 70% of our revenue comes in the first quarter. It’s right, it’s. It’s easy to take like first half and second half because some, there might be some similar sales based on the monsoon or overall of the monsoon. So first off contributes like 70 to 80% of our revenue. That will. That will continue going forward.
Yashovardhan Banka
So first off as an H1, right?
Mithun Chand
Yes, H1.
Yashovardhan Banka
Okay, okay, okay.
Mithun Chand
And even in H1, even in H1 the Q1 contributes a lot. But as I said that there might be some slower sales which we place in the market in the first quarter itself. But sometimes they recognize the sale in the second quarter Q2 because the if it is not liquidated, we don’t recognize it as sale. Understood, sir. So lastly, we’ve already spoken about the monsoon.
Yashovardhan Banka
We just wanted to understand if you can elaborate a bit on how the good monsoon will benefit us.
Mithun Chand
Good monsoon in the sense that if you get rainfall in time and it’s a widespread rain across country, then the season will be as anticipated. Otherwise there might be a chance in the crop shifting.
Yashovardhan Banka
Okay, okay.
Mithun Chand
That might impact sales to some extent. But as a company we are there in most of the crops. When compared to other companies, we have a minimal risk in that. The risk is very minimal for us because we are already there in most of the crops.
Yashovardhan Banka
Understood, sir. Thank you. All the best.
operator
Thank you. Participants who wish to ask questions may press star and one at this time. The next follow up question is from the line of Dhruv Saraf from Bowhead India Fund. Please go ahead.
Dhruv Saraf
Mithun. Sir, just wanted to understand some color on the Bangladesh business. So we’ve seen a big drop in exports this year. So do you think that business gone for the next one or two years or do you see it coming back?
Mithun Chand
It will come back. This year is a hit what we have taken. But that’s the reason I said that it’s not only Bangladesh which is coming up in the next one to three years. There are many other countries we have added upon. Like we are there in Africa and the Southeast Asian countries. So with a consolidated weight will go to 150 crores in the next five years. And this year we’ll definitely see growth in these segments. Bangladesh will also pick up.
Dhruv Saraf
So this year itself you’ll see Bangladesh come back.
Mithun Chand
Yeah, yeah, we can see the Bangladesh. No, last time. There are a couple of reasons. One was a political issue. Second, there were a lot of inventory in the market in last year in Bangladesh markets because before that the season was not that great. Now the most of the inventories are down. The. The. The issue is also sorted out and I think we can get back to those sales what we had done earlier. And in fact we have better plans in Bangladesh going forward.
Dhruv Saraf
Thank you, sir. Thank you.
operator
Thank you. The next question is from the line of Heath Javeri from Money B. Please go ahead.
Unidentified Participant
Acreages. You mentioned that we expect the cotton. Acreages to fall this year. So why is that and why are we focusing on the cotton portfolio going forward in this year at least if. You’Re saying that the acreages are falling. So I just want to get some. More color on that.
Mithun Chand
As a crop, cotton is not that lucrative when compared to other crops like maize. The MSPs of maize and the current trading, current market rate of maize is also pretty good. So people are slightly inclined towards May this year and as various cotton. This crop shift is very natural in terms of agriculture wherein some crops will do well and some crops will fall. But cotton as a crop we can’t neglect it. And going forward cotton has also very good focus on it. And with the small base what we have descent based what we are right now, we have good scope to increase market share that the reason we are focusing on cotton and going forward our focus will be on cotton as well.
Unidentified Participant
Okay, that’s it from my side. Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star one to ask a question. The next question is from the line of Anurag Jain who is an investor. Please go ahead.
Unidentified Participant
Good afternoon sir. Am I audible?
Mithun Chand
Yeah, yeah.
Unidentified Participant
Good afternoon sir. Basically the Tata Group company Rallis in. Its conference call had mentioned that the entire seed industry is facing distribution challenges related to processing of seeds, packing of seeds and sending seeds to the market. So is this something that is affecting Cauvery seeds also in the current season?
Mithun Chand
Not really because we have our most of the facilities are owned by Cauvery itself and we don’t do much on what you say that we don’t hire much of facilities from outside. It’s all in build facilities. We have faced this challenge earlier that the reason the strategy we have done that everything should be in our and we are having that in house processing facility as of now. And for us we don’t see much of a challenge. It’s not a major challenge for us to address.
Unidentified Participant
Okay sir. And sir, how is Kavehl placed in. Terms of capacities for processing seeds and. Packing seeds for the next two, three years? We already have the capacity to account for the growth for next two, three years or Cauvery will need to do some capex or you know to enhance capacity for processing and packing.
Mithun Chand
At present if you see India we have got one of the largest and highest processing facilities. What we have right now both in terms of the processing facilities, in terms of the warehouses, in terms of the cold storage, we have one of the highest capacities and processing facilities right as of now for for the anticipated growth we already have planned. And whatever new capacities or new lines, whatever we have built, we have made it compatible to add on. And that’s a continuous activity to increase the facilities. But going forward 20 to 30 crores per annum will be the capex for maintenance and addition of new for new plans.
Unidentified Participant
All right, thank you.
operator
Thank you. We’ll take our next question from the line of Nilesh Doshi from Green Lantern Capital. Please go ahead. Thanks for taking my question.
Nilesh Doshi
What was the sale of cotton?
operator
Sorry, sorry to interrupt you sir, but your voice is breaking.
Nilesh Doshi
So can you, can you hear me now?
Mithun Chand
Yeah, yeah. What was the cotton seat sale last year? M. It was around 3.6 million packets.
Nilesh Doshi
And I think you mentioned in one. Of the answers that the inventory you. Have created is 6 to 7. 7 million packets.
Mithun Chand
Yes, yes, yes.
Nilesh Doshi
Second is, can you just tell me. The inventory of finished goods as of 31st March?
Mithun Chand
I don’t know the exact figure right now but whatever is there apart from the biological assets which is shown in the balance sheet as of now. Apart from everything is like stock which is already there in the plants. So some there are different. Different ways we make it finished ready to go to market only we when we try to send it to the market. Otherwise it’s all stored in bulk seed at a different levels.
Nilesh Doshi
And how much would be biological assets as of end of march?
Mithun Chand
It’s like 200 crores. I do. Exactly. I don’t have the figure right from the presentation but it’s like 200 odd crores.
Nilesh Doshi
Take it offline.
Mithun Chand
I’ll get back to you regarding that one.
Nilesh Doshi
Sure, yeah. Thank you. Thank you so much.
Mithun Chand
Thank. You.
operator
Thank you. The next follow up question is from the line of Dhruv Sara from Bowhead India Fund.
Dhruv Saraf
Please go ahead mit. Just one clarification. On the balance sheet we see a CVIP of around 90 odd crores. This is despite commissioning GCF CWIP of 90 crores on March in the balance sheet.
Mithun Chand
I’m missing you what you are saying.
Dhruv Saraf
The capital work in progress sir that is there on the balance sheet as of March of 89 crores. So what does the CWIT pertain to? Because you’ve already commissioned the Biotech Center.
Mithun Chand
No. 1 one is we have set up new office space now that is already commissioned. Some part is left out and some go downs and some RD centers we are building up. That is in the capital working process.
Dhruv Saraf
Okay, so that is over and above the biotech center you’ve already commissioned.
Mithun Chand
No, biotech is also part of it. Biotech we have not commissioned yet. It’s just a process.
Dhruv Saraf
Okay, sure.
operator
Thank you. Thank you. Ladies and gentlemen. This was our last question. Thank you for joining the call. For any other information, please be in touch with Mr. Rama Naidu from Intellectual PR on 992-020-9623 on behalf of Cauvery Seed Co. Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.