Kaveri Seed Company Ltd (KSCL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Motilal Oswal Financial Services): Ladies and gentlemen, good day, and welcome to Kaveri Seeds Q2 FY25 Post Results Conference Call hosted by Motilal Oswal Financial Services. As a reminder, all
Moderator (Motilal Oswal Financial Services): Ladies and gentlemen, good day, and welcome to the Kaveri Seeds Company Q2 and H1 FY '27 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. 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 risk and uncertainties. For a list of such consideration, please refer to the earnings presentation. I would now like to hand over the call to Mr. Mithun Chand. Over to you, sir.
Mithun Chand (Kaveri Seed Company Ltd): Thank you. Good evening, and welcome everyone to our Q2 and first half '27 earning conference call. We hope you have had a chance to review the presentation of the results, which is also available on our website. I will touch upon the operation and financial performance of the company and then open the floor for a Q&A session. Revenue from operations was at 125.44 crore as compared to 96.61 crore in Q2 '26, a growth of 29.84%. EBITDA was at 5.42 crore as compared to a loss of 6.47 crore. Net loss narrowed to 3.21 crore as compared to net loss of 15.05 crore. On a segmental basis, non-cotton revenue were at 116.82 crore as compared to 90.53 crore, a growth of 29%. while cotton revenue were at 8.61 crore as compared to 6.08 crore, a growth of 41.7 crore %. Revenue from operations was at 940.44 crores as compared to 1,041 crore. EBITDA was at 286.68 crore as compared to 315.88 crore in first half '26. With an EBITDA margin of 30.48% as compared to 30.32%.
Mithun Chand (Kaveri Seed Company Ltd): crore as compared to 301.45 crore. Cash on books stood at 178 crore. On a segmental basis, non-cotton revenue was at 718 crore as compared to 817 crore, a decline of 12.12%, while cotton revenue was at 224 crore as compared to 224.9 crore, a decline of 1.3%. The major highlights, first half '21 was shaped by El Nino and the delayed onset of the monsoon. The rainfall deficit impacted showing across the major growth segments and reflected in lower interest towards premium high-value products with which weighed heavily on the first quarter. The second quarter was saw a recovery with revenue growing at 29.84% and EBITDA rising to 5.42 crore compared to 6.47 crore loss. Despite the lower revenue, the company broadly maintained to maintain it EBITDA margin at 30.48% of net revenue as compared to 30.32% of of first half '26. Maize was the largest drag of the half on the half with volume down by 36% and revenues down by 36.3%, owing to a nearly 30% drop in sowing acreages in Karnataka. New products continue to to gain share, with new cotton products contributing 37.7% as compared to 21.4%, and new single cross hybrids contributed a substantial 21.8 plus percent of the maize portfolio. The export business grew 2.63 times to 33.07 crore from 12.56 crore in first half. The board has declared an interim dividend of Rs. 5 per share, that is 250% of the face value of Rs. 2 per share. Operational highlights. The contribution of new cotton new products of cotton was up from 21.4 to 37.7%. Cotton volumes were maintained, vis-a-vis last year in spite of challenges like illegal cotton and reduction in acreages in first half of '27, revenues at 222 crores as compared to 224 crores. In quarter two, cotton revenues grew by 41.7%. In cotton, the company has established a strong foundation with new products in the northern markets of Haryana, Punjab and Rajasthan, as well as in central and southern markets. Maize revenues were at 188.47 crores as compared to 295.84 crores, a decline of 36.3%, while new single cross hybrids contributed a substantial 21. plus percent growth in maize portfolio. Hybrid rice revenues were at 264.4 crores as compared to 282.56 crores, a decline of 6.4%. In quarter two, hybrid paddy registered significant growth to 17.33 crore from 2.37 crore, primarily due to the export business. Selection rice revenues increased by 2% to 169.45 crore as compared to last year. In quarter two '27, research paddy grew by approximately 22%. Vegetables revenue were at 25.99 crore as compared to 31.7 crore, a decline of 18%. Revenues from other crops at 70. 70 crores as compared to 40.8 crores, a growth of 71.6%. To build on the export momentum, the board has approved the incorporation of wholly-owned subsidies subsidiaries in Tanzania, Kenya, Vietnam, Thailand, Philippines, Indonesia, Zambia and Peru, which will focus on product registration, research for seed and vegetable crops and marketing and distribution. The company holds the globally recognized ISTA accreditation for the QC lab, besides its ISO NABL accreditation. The overall growth story remains intact. The first half has been challenging on account of the weather, but the recovery in the second quarter, the rising share of new products and growth in the export gave us confidence in the direction of the business. We'll continue to work on new variants across maize, vegetables, rice and cotton and to build our presence in international market through the new subsidiaries. I would now open the floor for Q&A session. Thank you.
Moderator (Motilal Oswal Financial Services): Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Rishabh Shah from Baglarock PMS. Please go ahead.
Rishabh Shah (Baglarock PMS): Yeah, hi. Thanks for the opportunity. So my question is, we are expanding into eight countries. Like we have and we had also send some samples to Philippines only last quarter. So, but the results we were awaited yet. So, and as you say that foreign country farmers are tougher to convince to use our products. So, just wanted to know what is the thought process going behind like expanding into so many countries, because earlier also we had tried Bangladesh, but we weren't as successful as we thought we would be.
Mithun Chand (Kaveri Seed Company Ltd): Basically, if you see our export business compared to 5 years back to now, we have increased our export business hardly from 10, 12 crores to almost like 65, 70 crores now. Going forward, right now if you see other our model, we are exporting our seed and billing to some distributor there, and they're selling our seed there. But going forward, we want to establish our own brand. To establish our own brand, we mean to test there which takes 3 to 4 years to test it. So, for that we require registrations of the company, incorporation of the company and registrations, trialing and registration of the hybrid under the company. So, now we want to open up going forward, it will take some time, maybe a 4, 5 years. So, it will take some time for us to test, trial and then introduce hybrids and create our own brand there. So, that's the reason we're trying to incorporate the company. For example, in terms of Bangladesh, we're not we're not failed there, we're successful. We're doing good business in Bangladesh. The only thing is that still we're trying to develop the brand. Once we develop the brand, we'll sell it in on and in our name. Whereas, in countries like Africa, we need to register our hybrids which takes 3 to 4 years for us. So, already if you see our if you see our exports, we have done a good business in Tanzania, we have done business in we have Indonesia, Philippines and Vietnam. So, we're trying to develop our own brand there, which takes time. At the same time, we'll try to export our business to distributors and then we'll try to build our own hybrids and name.
Rishabh Shah (Baglarock PMS): Okay. So, basically, you are saying the difference this time would be that in Bangladesh versus African countries that the registrations take more time as compared to Bangladesh, what we have seen?
Mithun Chand (Kaveri Seed Company Ltd): Yes. Yes. But end of the day, if you want to sell our own hybrid and our own brand, we need to register there. For that you require local incorporation. Right now, we're just exporting our seed, they are they're selling on their own brand.
Rishabh Shah (Baglarock PMS): Okay. My next question is that we we're a seed company and then in the previous call, you have mentioned that the season is very challenging for us to do this El Niño or lesser rainfall and that sort of things. So, I just wanted to know that we have faced such times, such tough times in the history of the company. So, I wanted to know what is different this time and how are we tackling the situation differently?
Mithun Chand (Kaveri Seed Company Ltd): So, if you see our sale right now, first half is already done where we have seen the majority of the impact. I don't see much impact will be there, definitely there will some impact in the second half as well. But we have already seen the impact. We are down by 10% in overall sale. If you see the region wise, if you take maize as a crop where we are down by more than 35% to 40%. And majority of that decline is from Karnataka where we have seen more than 30% deficit rainfall. And especially in Southern Karnataka, northern so, northern Karnataka. So, that has impacted our maize sales a lot. Even then, we were able to cope up in some areas and overall the situation where we have were strong in terms of sales like Telangana combined Andhra or parts of Maharashtra, the the rainfall and acreages are pretty down. So, that has impacted us. Even in this tough conditions, we're able to maintain that except for in maize, you are able to maintain market share and revenues close to what we are done last year. So, what is one of the tough year where we have seen and you are I think you are also seeing the reports how how how how difficult, how challenging is this season this year. And yeah, we are in the this business, but it's one-off year. There nothing to worry about the future. And if you see the our competence and the by seeing the situation, I think we have really done well when compared to many players
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