Ladies and gentlemen, good day and welcome to the Kaveri Seed Company's Q4 and FY 2026 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 the conference call will be recorded. Joining us today on this call, 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 considerations, please refer to the earnings presentation. I would now like to hand over the call to Mr. Mithun Chand. Over to you, sir.
Thank you. Good evening and welcome everyone to our Quarter Four Financial 2026 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 Q&A session. Financial highlights. Revenue from operations were at INR 82.21 crore as compared to INR 76.95 crore in quarter four 2025, grown by 6.84%. Net loss was at INR 25.65 crore as compared to INR 29.25 crore in quarter four 2025. Revenue from operations was at INR 1,303.77 crore as compared to INR 1,121.57 crore in Financial 2025, grown by 16.25%. EBITDA was at INR 349.75 crore as compared to INR 274.29 crore in Financial 2025, grown by 8.34%. Net profit was at INR 283.26 crore as compared to INR 265.21 crore in 2025, grown by 6.81%. Major highlights.
Financial year 2026 was a strong year for the company, with the revenue from operations growing by 16.25% to INR 1,303.77 crore, while PAT increased by 6.8% to INR 283.26 crore on account of delivering good growth rates across all non-cotton segments like rice, maize, and vegetables. Contribution from new cotton hybrids improved significantly, increasing from 10.3% to 30.05%, demonstrating strong acceptance of newly launched hybrids and strengthening of our future cotton portfolio. Expecting growth in cotton sales across North, Central, and South India driven by new hybrid products. Maize remained the key growth driver during 2026, with volume growth of 18.84% and revenue growth of 40.17%, supported by improved acreage and stronger market demand. Hybrid rice revenues increased by 18.3% despite restrictions in Punjab, while selection rice increased by 2.58% and revenues grew by 9.76%. Hybrid rice growth is expected from key markets including Punjab, Uttar Pradesh, Bihar, Chhattisgarh, and Jharkhand.
Export business delivered exceptional performance with approximately 90% growth during financial 2026, while quarter four exports registered growth of nearly 76%, reflecting increasing acceptance in major international markets. Export business performance are expected to remain strong. Expecting growth in rainy millet across Rajasthan and Uttar Pradesh. The contribution of new products of volumes of cotton was up from 10.3% to 30.05%. Hybrid rice revenues increased by 18.3%, selection rice volumes increased by 2.38%, and revenue by 9.76%. Maize volumes increased by 8.84%, and revenues increased by 40.17%. I would now open the floor for Q&A sessions.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then 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. Again, to register for a question, please press star and one. Participants, you may press star and one to ask a question. Your first question comes from the line of Siddhant Dand with Goodwill. Please go ahead.
Yeah. Hi. My first question is regarding the inventory levels. Last year, our inventory had a pretty abnormal jump of 38%, but sales grew by only 16%. This year also, we've had a 17% inventory growth over the last year level. Is inventory expected to normalize to a certain level, or will we keep this extra buffer that we've started to create?
17% up. This year we have produced more because last year there was a lot of competition in terms of production areas. We have produced more intentionally to keep some buffer stocks. That's the reason we are increasing a bit of higher inventory level. But it's not an issue for the company. Just strategically, we have produced much to some extent. This time to some extent, even 5% to 7% gains were also higher. That is also an impact of what we see in what do you see in inventory levels?
Okay. I agree. Okay, that's all good to know. Just a usual, any update on Bt3, BG-III trials?
As of now, nothing but just moving in a very slow pace, but nothing concrete as such. Once we get any update, we will definitely let you know. But it is still moving at a very slow pace.
Okay. El Niño effect or something that we see on our sales anytime, or it is not really a thing?
It is too early to say because there is a lot of mixed opinion about the monsoon altogether. But in the last week or three or four days, we have seen pre-monsoon showers across most of the parts. So that may not be a right thing to judge. But as a seed business, we require initially two or three showers before the seeds. So we may not have much impact. But the delay in the monsoon may impact the cropping patterns. But as we are there in most of the crops and we are a product mixed company, so we might mitigate that risk. As of now, we do not see much of threat in that.
Are you expecting cotton to continue de-growing?
Cotton should grow this year. This year, the sentiment is also good across India. In the initial trend, we see the cotton acreages was also growing. There will be El Niño effect. Even the sentiment for cotton is also good because it's a hardy crop. The sentiment is good, and we see there will be an increase in the acreage, and definitely we'll have an advantage in that. We'll be definitely growing in cotton as a whole.
Within that, you expect new products to become It went from 10%- 30%. Can it become 50%+ of our business?
Most of the growth what we anticipate this year should come from the new products. That we have already seen the initial trend last year. That will continue to grow.
Will it have a similar margin or lower, something because of price cap?
This year, we may not be able to increase the prices like how we have increased last year. But the other production cost is also slightly lower than last year. So in that way, we will be able to maintain the margin. Slightly maybe in a better way than last year because the other cost will come down.
Okay. Overall production costs are down from last year?
Because the yields are higher, the production cost is slightly down.
Okay, great. Thank you so much.
Okay, thank you.
Thank you. Your next question comes from the line of Dhruv Saraf from Bowhead India Fund. Please go ahead.
Good afternoon, Mithun sir. Sir, just wanted to understand on the balance sheet, sir. On the other current liabilities, we have seen a reduction from INR 600 crore of last year compared to INR 470 crore this year. So sir, what does this pertain to? Is it due to lower customer advances that you have received?
Yes. If you see the advances as such from last year to this year, we have received INR 75 crore- INR 80 crore of lower advances.
Okay. What could be the reason behind-
That's the main impact of that.
Okay. What would be the reason behind this-
Even the trade payables are also lower compared to last year.
Yeah. What would be the reason behind this lower advances, sir? Is it because of expectation of a poor season, for example?
Not really, but the sentiment of the farmer for the cash flow is a bit tight across the channels. Even we have not insisted more on advances because the margins are getting shrunk.
Okay. Margins would be at the farmer's end, is what you're trying to say?
No. Margins at the company level. If we take an advance, we need to give more incentives to them. We are not encouraged taking more advances, not floated attractive schemes.
Okay, sir. Sir, in terms of the key crops for us, cotton, maize, and rice, how do you see the channel inventory in the system for all three of them? If you can touch upon the illegal penetration, especially in cotton for this year.
So as of now, nothing is there in the channel. But if you see in the company levels because as a seed, nothing will be left in the channels. But most of the inventory will lie with the company or in the season with the channel. The season is yet to begin. The placements are slightly happening now in some areas. So the inventory levels are pretty high in the system, especially with the companies.
Right.
So that is a challenge. But as the inventories are high, then there is a risk that we may not be able to increase the prices unlike what we did last year. But the branded products move more now.
Okay. So would it be the same, as you said, for all three crops, or do you see any difference in, let us say, cotton versus the other
The inventory is high in all three crops. In all three crops, the inventories are high.
Okay, sir. What-
As I said that most of the yields are also good. Most of the channels got the inventory. Coming back to your second question regarding the illegal Bt. Except in Gujarat, we do not see any rise in illegal Bt. In Gujarat, it is still continuing as of now.
It is still continuing as of now. Okay, sir. All right. Sir, your expectation in terms of how FY 2027 could pan out, in terms of volume growth or revenue growth and margins?
Last time we have increased prices, that's the reason we have seen a lot of revenue growth. This time, the majority of the contribution will be from the volume growth. We see there's 15%+ of growth at the top line, and we might grow much higher than what we have projected, like 15%+ at the company level. But in cotton, it should be more than 21%.
Volume growth in the good case running 21% is what you're saying?
Overall, the revenue should be in between the 15%-20% growth. And cotton should beat the overall company in terms of the growth.
Okay.
As of now, we may not increase the prices, so the revenue growth will be in line with the volume growth.
Sure, sir. Understood. Thank you, sir. I will get back in touch.
Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. The next question comes from Amit Doshi with Care PMS. Please go ahead.
Yeah, thank you, sir. Sir, regarding inventories, obviously you said all the mix of all the three crops will be there, but for the cotton especially, since now the hybrid is contributing more, would we have more inventory of the old cotton seed, which ultimately would call for a write-off considering two to three years of shelf life?
If you check the inventory compared to last year, the inventories are only up by 15%- 18%. As we are anticipating more than 15% growth in this year, so we are in line with the inventory levels. But in terms of the write-offs, most of the inventory is in new production, so we may not worry about the write-off. Especially in cotton, the seed will last for three years. So the inventory, what we have is hardly maybe maximum of 1.3 to 1.5 years, not more than that. If anything is left, we will use next year.
Okay. You mentioned that this illegal cotton seed is still continuing in the state of Gujarat. Despite that, our confidence is extremely high on the cotton seed.
Yes.
Is it just because of the price parity that we would have vis-a-vis illegal cotton or anything else apart from that?
We are not competing with illegal cotton at all. We are competing with the normal legal Bt cotton across. If you can see, our new hybrids have contributed more even in last year. Those hybrids have performed well last year, so we are anticipating a growth in those hybrids. That will contribute the majority of revenue in cotton.
Okay. Now, do you believe the overall reduction in last four years have come down from 45 to under 20? Of course, last year was a reparation. What could be next year's likelihood?
So definitely from-
30% or so would be the cotton.
Definitely, if you compare to last year, the contribution of cotton will definitely higher this year compared to last year because we see a very good growth in cotton this year. That doesn't mean that we will not grow in other crops. We will also grow in other crops, but cotton will be growing much better than other crops.
Okay. Sir, we saw some announcements regarding the tax rulings which in favor of the company at the appellate level. Do you want to throw some sort of a management highlights in terms of what is the likelihood of past as well as future such tax liabilities or the obligation vis-a-vis the call of Income Tax Department.
Whenever we have any litigation or any with the tax authorities, we have already intimated to the exchanges and to the investors. Because as we claim it as an agriculture income, it is not our company, it is across the industry where most of the companies claim it as an agriculture income. We are not the first or the only company who claim it. There is a dispute, and across, if you see, not only to Kaveri, but across industry you see all the seed companies have won against the tax department. It is just a recognition of the income, and we have won at the Commissioner of Income Tax (Appeals) level, and in most of the cases, most of the companies have got many orders at ITAT and High Court. Even though there might be a litigation, we are not worried about it. That is what we were saying in the last years also.
We had a litigation. We were pretty confident that the nature of the income is agriculture income, and that is all clear in most of the courts. It is a matter of time. As of now, we do not have any other litigations as of now. If some litigation definitely comes in, definitely we will know. As of now, we do not have any litigation.
Okay. Sir, anything update on the Seeds Bill that was earlier last year proposed? Anything on that?
That should come this year, most probably. Any time. It is moving very actively. That should be out very soon.
Oh, okay. And sir, since last two years, obviously dividend has been maintained. Last two, excepting last year, we had done buyback as well. This year there is no announcement of dividend, additional dividend. Any thought process at how to balance that?
Usually we give only one-time dividend. That is usually in the second or third quarter we will see. We were regularly dividend paying. We have not changed our policy regarding dividend. Even though we do not have a policy, we are giving you the same time. In terms of the buyback, last year we have not done because we were pretty much sure that we are producing more, we need to maintain for the inventory, that the money is stuck, and that is what you are seeing now. Once we realize this money in the next three to five months, then we will come back with that.
Okay. And the last question, sir. Since now last year, of course, the cost of production, et cetera, were higher. Now you are saying that the cost of production is likely to be lower. On the other side, price is not going to happen. Would you, like you said, that 15%-20% growth should be there on the revenue level. On the margin front, over 24%, do you believe that we can cross into reduction in cost of production?
As most of the other expenses are same or will be lower than last year and slightly lower production cost compared to last year. That is where we see that the margin should go up this year compared to last year.
Okay. Thank you, sir, and wish you all the very best.
Thank you.
Thank you. Participants, if you wish to register for a question, you may press star and then one now. The next question comes from the line of Anurag Jain with an individual investor. Please go ahead.
Good afternoon, sir. My question is on the capital investment, capital expenditure. There is a capital work in progress of INR 99 crore at the standalone level and INR 129 crore at the consolidated level. What is the CapEx being undertaken by the company and its subsidiaries? What kind of facilities are being built?
Most of the facilities are office building or plant and machinery. Land, office building, and plant and machinery. These are the ones with most of the CapEx in there. Out of which only INR 30 odd crore is with one building which is going on, and some with the acquisition of land and some with seed processing unit and the machinery.
The land purchase is basically for R&D land or for building purpose?
For R&D.
Okay. Thank you, sir.
Thank you. Participants, you may press star and one to ask a question. A reminder to everyone, you may press star and then one to ask a question. The next follow-up question comes from the line of Dhruv Saraf with Bowhead India Fund. Please go ahead.
Mr. Mithun Chand, if I just look at the gross margins over the last two, three years, we have seen a falling from those peaks of 49% to roughly 49.5% to 47% today. So in FY 2028, sir, do you expect any gross margin expansion or will the margin expansion purely be led because of operating leverage?
Even we see something gross margin level because in the last two, three years, rightly said, rightly observed, the cost of production has gone up and in the same ratio we were not able to pass it on to the farmer. Now, the cost of production is slightly lower and the prices remain at the last year level at least, if not higher. So we might increase the gross margin this year. So the addition in the bottom line should be across all gross and the operational levels.
Okay. Sir, I just wanted to specifically touch on Maize. You had alluded to the fact in one of the earlier calls is that Maize inventory in the system is very high compared to previous years. And given, sir, this is an El Niño year, maize has competing crops like soybean and pulses, which are expected to do well. Do you see very high pricing pressure in maize for the coming Kharif season?
As of now, the sentiment is not that great for maize. Last year the yields are very much higher. I am talking just about the Kharif part.
Because the yields are good, the sentiment is good. One is because of El Niño. There is a big drop in El Niño. The other thing is that there is some sort of a shortfall in terms of the fertilizers in the market. That is also impacting to some extent, but it is too early to talk about that. That is the reason we just see a sideways in the Kharif part, but second rabi, we see a very positive thing for maize. For as a company as such, even in Kharif we will be growing because we are targeting some other pockets where we are not strong. We have very good address in those segments. We will be growing even in this particular tough conditions.
Okay, sir. Sir, you had a lot of success with your new products in Maize over the last two, three years. Is there any major new product launches that you are doing this year, or have you done last year which could start contributing to revenues?
That is a continuous activity what we do, but in the last two, three years what we have done, those will be a major contributor for this year and for the next year.
Sure, sir. Thank you.
Thank you. The next follow-up question comes from Anurag Jain, an individual investor. Please go ahead.
Good afternoon, sir. Sir, till now, Kaveri Seed was using the Kaveri brand in the market. Now, you have started using one of the facilities, Aditya brand also. So when you are looking at the market, how are you dividing the market segment between the Kaveri brand and Aditya brand? Are they targeting different segments, or they are competing with each other also?
In terms of the company level, it's 100% subsidiary of Kaveri. But the products what we sell in Kaveri and Aditya are altogether different. We have another subsidiary company named Genomix also. All three companies sell different products. Because as we have good R&D and we are having many new hybrids which are like V2 and in different segments. As a company, we may not be focusing on most of the hybrids. So those hybrids, for marketing way, we give it to Aditya and Genomix. In most of the cases, they compete also among themselves. But as a team, as a hybrid, they all operate independently. They are nothing related to each other.
Okay.
The main product is in Kaveri and something like V2 will go to those products.
Okay, sir. Thank you.
Thank you. Participants, you may press star and one to ask a question. As there are no further questions, this concludes our question and answer session. Thank you for joining the call. For any other information, please be in touch with Rama Naidu from Intellect PR on 9920209623. On behalf of Kaveri Seed Company Limited, that concludes this conference. Thank you everyone for joining us. You may now disconnect your lines. Thank you.