Kaveri Seed Company has received a notice of hearing from the Income Tax Appellate Tribunal (ITAT), Hyderabad, regarding its income tax appeal for Assessment Year 2022-23. The matter is scheduled for hearing on October 15, 2026.

The appeal, filed by the Income Tax Department under Appeal No. ITA2422/Hyd/2026, challenges an order passed by the Commissioner of Income Tax (Appeals). The tribunal notice was received by the company on September 18, 2026.

Background of the Dispute

The core issue in the appeal relates to a tax demand of ₹56.21 crore raised by the tax authorities. This demand was primarily based on the disallowance of exemption claimed by the company on agricultural income for AY 2022-23.

Previously, the Commissioner of Income Tax (Appeals) reviewed the case and allowed the company’s claim. In an order dated April 7, 2026, the appellate authority held that the income in question qualified as agricultural income, thereby deleting the entire demand.

Company Stance

Kaveri Seed Company stated it is evaluating the notice and will take all necessary steps to defend the matter before the tribunal. The company believes it has a strong case on merits.

In its disclosure to stock exchanges pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company indicated it does not expect any material adverse impact at this stage.

Key Details

The disclosure serves as a continuation of earlier intimations provided by the company regarding the receipt of the demand notice and the subsequent appellate order.

Kaveri Seed Company reported a contraction in both revenue and profitability for the first quarter of the fiscal year ending March 2027. The agri-input manufacturer saw its consolidated net profit decline to ₹2,798.4 million, down from ₹3,271.6 million recorded in the corresponding period last year. This represents a significant drop in bottom-line performance amidst challenging market conditions.

Top-line growth also decelerated during the period. Total consolidated revenue for Q1FY27 stood at ₹7,425.0 million, compared to ₹8,585.3 million in the same quarter of the previous fiscal year. The decline in sales volume or pricing pressure appears to have directly impacted the overall earnings trajectory for the company.

Financial Performance Overview

Despite the decline in absolute profit figures, the company maintained operational efficiency in terms of margin retention. Key financial indicators for the quarter are detailed below:

The operating profit before interest, taxes, depreciation, and amortization (EBITDA) decreased to ₹2,963.3 million from ₹3,444.3 million year-on-year. However, the EBITDA margin showed resilience, contracting slightly to 39.9% from 40.1% in the prior year period. This suggests that while the scale of operations shrank, the cost structure relative to revenue remained largely intact.

What the Numbers Show

A notable divergence exists between the company's top-line contraction and its margin stability. While revenue fell by approximately 13.5% (from ₹8,585.3 million to ₹7,425.0 million), the EBITDA margin remained stable at nearly 40%. This indicates that fixed costs were either managed effectively or reduced in line with lower production volumes, preventing a sharper decline in operating leverage. However, this operational efficiency was not sufficient to offset the volume-driven revenue loss, resulting in a net profit decline that outpaced the revenue drop in percentage terms.

Corporate Governance Updates

The Board of Directors, in a meeting held on August 13, 2026, approved the re-appointment of key management personnel for a further five-year term, subject to shareholder approval at the Annual General Meeting (AGM). The re-appointments include:

• G.V. Bhaskar Rao as Chairman & Managing Director
• G. Vanaja Devi as Whole Time Director
• C. Vamsheedhar as Whole Time Director
• C. Mithun Chand as Whole Time Director

The Board also re-constituted the Audit Committee, Nomination and Remuneration Committee, and Corporate Social Responsibility Committee. The 39th Annual General Meeting is scheduled for September 29, 2026, with the register of members closed from September 26 to September 29, 2026.