Kaveri Seed Company Limited announced its H1 FY2025-26 results, showcasing double-digit growth in revenues and EBITDA. Despite the revenue growth, the company faced challenges in profitability.

Financial Highlights

• Standalone revenue from operations reached Rs. 1041.91 crore in H1 FY26, up 17.09% from Rs. 889.85 crore in H1 FY25.
• Consolidated revenue from operations was Rs. 1077.43 crore in H1 FY26, showing 14.54% growth compared to Rs. 940.67 crore in H1 FY25.

Segment Performance

• Maize volumes increased by 29.7% with revenues growing 56.76%.
• Cotton sales were impacted by increased illegal cottonseed usage and higher production costs.
• Hybrid rice volumes grew 0.9% with revenues up 21.48%, though sales were affected by restrictions in Punjab.
• Selection rice volumes increased 2.60% with revenues up 11.07%.
• Vegetable seed revenues increased 31.06%.

Product Innovation

The contribution of new products to cotton volumes increased from 11% to 36%, indicating successful product development efforts.

Dividend Announcement

The board recommended a 250% dividend of Rs. 5 per equity share on a face value of Rs. 2 per equity share.

Challenges

While Kaveri Seed Company achieved strong revenue growth, it faced profitability pressures. Cotton sales were particularly affected by external factors such as illegal seed usage and increased production costs.

Kaveri Seed Company Limited, a leading Indian seed company, reported strong financial results for the first quarter of fiscal year 2026, with significant growth in its non-cotton segments offsetting challenges in the cotton business.

Financial Highlights

• Revenue from operations increased by 16.98% year-over-year to Rs. 945.31 crores
• EBITDA rose by 13.68% to Rs. 332.85 crores
• Net profit grew by 11.88% to Rs. 316.50 crores

Segment Performance

Non-Cotton Segments

The company's non-cotton segments showed robust performance, with overall volumes up 8% and revenues increasing by 31%. Key highlights include:

Cotton Segment

The cotton segment faced challenges, with volumes decreasing by 15% due to the prevalence of illegal seeds and higher production costs. However, the contribution of new cotton products to total volumes increased from 12% to 34%.

Management Commentary

Mithun Chand, Executive Director of Kaveri Seed Company, stated, "We are delighted to declare a good set of numbers on account of increasing acreages and higher realizations of non-cotton segments like rice and maize. Increased volumes of non-cotton hybrids have resulted in good realizations, which has been well reflected in the overall revenue growth."

Future Outlook

• The company expects 20% growth in non-cotton segments over the next 3-5 years
• Overall company growth is projected at 15-20% for the same period
• Management highlighted increased R&D investments of Rs. 60 crores annually
• Export growth of 30-40% is anticipated, targeting markets in Bangladesh, Tanzania, Vietnam, and Philippines

Challenges and Opportunities

• The cotton segment faces challenges from illegal seeds, particularly BG-II RRF seeds
• The company is awaiting potential approval for BG-III cotton seeds
• Kaveri Seed Company is expanding its product portfolio in both cotton and non-cotton segments through its subsidiaries

Conclusion

Despite challenges in the cotton segment, Kaveri Seed Company's strong performance in non-cotton segments, particularly maize and vegetables, has driven overall growth. The company's focus on R&D and expansion into new markets positions it well for future growth in the coming years.

Note: All financial figures are based on stand-alone results.