Ladies and gentlemen, good day and welcome to Kaveri Seed Company's Q3 and nine-month FY 2026 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone.
Please note, 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 earning presentation. I would like to hand the conference over to Mr. Mithun Chand. Thank you, and over to you, sir.
Thank you. Good evening, and welcome everyone to our Quarter 3 nine-month Financial year 2026 earnings conference call. We hope you have had a chance to review the presentation of our results, which is also available on our website.
I would touch upon the operational and financial performance of the company and then open the floor for the question answer session. Highlights. Revenue from operations has registered a growth of 16.94% to INR 1,221.56 crores as compared to INR 1,044.61 crore in nine months financially 2025. EBITDA was at INR 358.39 crore as compared to INR 324.78 crore, registered a growth of 10.35%. Net profit was at INR 308.91 crore as compared to INR 294.46 crores, grown by 4.9%.
For the quarter 3 financial 2026, revenue from operations was at INR 173.65 crores, registered a growth of 16.08% from INR 154.77 crore. EBITDA was at INR 25.38 crore as compared to INR 25.09 crore, registered a growth of 1.14%. Net profit was at INR 7.46 crores. Cash in books stood at INR 309 crores as against INR 409 crores.
We are happy to declare a good set of quarterly numbers. Maize and selection rice volumes growth have resulted good revenue growth. Had there been a good rate support in maize during the quarter 3 financial year 2026, we would have delivered better profitability growth during the nine months of our operations.
Having said that, this is a good indication for next year performance, as we are able to clock better growth rates across our best performing segments like rice, maize, and vegetables. Our investments in expanding plans, capacities, and increased spending in R&D is going to contribute for increasing share of new products in both cotton and non-cotton segments.
The demand spike and increasing acreages of maize hybrid rice and selection rice, and vegetables are going to be major drivers in the years to come. This year, commercially, maize prices were hovering around 1,200-1,600% against 1,200 in the previous year, which affected rabi maize cultivation in early markets like Madhya Pradesh, Maharashtra, Gujarat, and Karnataka.
The increasing areas of mustard and our continuous focus on bringing new varieties in it is paying off, and this is going to be a sellable business in the next couple of years for us. We are able to convert volumes of non-cotton seeds into revenues growth due to good realizations and increasing market share and leadership in some of the leading segments where the company has good dominance in the market.
During the quarter, volumes of non-cotton hybrids increased by 6.1% and revenues increased by 13%, and volumes as well as revenues of cotton seed have registered a growth. Research paddy has grown by 51% in volume, whereas vegetable seeds have grown by 5% in volume. Sunflower has grown by 94% in volume, and mustard has grown by 64% in volume.
Our efforts in entering into newer international markets in the last five years and increasing registration of our seeds in these countries are expanding at ground level and delivering good results on our export front.
Exports have witnessed steep growth of 8% in revenue during the current quarter and continue to grow, and every year would be better than the previous year unless there is going to be any major unforeseen disruption in these markets.
As for our nine-month results, we are witnessing continuous growth in increasing contribution of new products. Cotton sales continue to impact by increased illegal cotton and high cost of production. All rice segments are doing well, both on volumes and revenues front. We are able to maintain hybrid rice volumes in spite of restrictions in state of Punjab, which has been one of the largest markets for us.
Whereas revenues of hybrid rice increased by 17.9%. Selection rice volumes increased by 7% and revenues increased by 14.2%. Maize volumes increased by 21% and revenues increased by 42.6%. Vegetable seeds volumes increased by 1.5% whereas revenue increased by 11.4%.
During the next quarter, we are expecting major growth in spring maize in Bihar, U.P., and Punjab. Similarly, expecting growth in summer millet in Gujarat, Rajasthan, and Western U.P. I would now open the floor for question answer session. Thank you.
Thank you so much, sir. Ladies and gentlemen, we will begin with 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. Our first question comes from the line of Amit Agicha from HG Hawa & CO Please go ahead.
Yeah, thank you for the opportunity. Sir, what percentage of annual revenue is currently reinvested into R&D and breeding, and how should this trend evolve?
As of now, the spend is in between 8%-10% of our total revenue, both including revenue and CapEx. Going forward, they should stabilize at this end, lower than what we have spent in the last year because most of the CapEx is already done there.
How many new hybrids are expected to be commercialized annually across cotton, maize, and rice?
That's a continuous activity. We don't track by number, but each and every segment we have very good pipeline hybrids. We have more than 200 hybrids in our portfolio. Each segment has got a different pipeline, so it's very difficult to track the number. But yes, in terms of major crops like rice, maize, and cotton, we have at least 8-10 hybrids which are really doing well.
Sir, can I put some color on, what is the typical gestation period like from lab research to commercial launch?
Basically, it is a very time-taking process. As we are there in the industry for the last many years, we are able to give hybrids in a very continuous manner. To begin with now, if some person starts now, everything will start at the first gate, it will take him straight two years to get a hybrid. So we have a very long gestation time.
Thank you for answering the question, sir. I will join back if I have more questions. Thank you.
Thank you.
Thank you. Our next question comes from the line of Dhruv Saraf from Bowhead India Fund. Please go ahead.
Hi, Mithun Chand, sir. Congratulations on the good set of numbers. Sir, just wanted to understand-
Thank you.
-why our Q3 gross margin is down almost 500 basis points year-on-year, and they're nearly at multi-year lows if I look at Q3 in the past as well. So, key reason for this?
Q3, yes.
Hello? Sorry.
Hello?
Hello? Yes, sir, can you hear me?
I can hear you.
Yeah, I am asking about the gross margin.
I am sorry, sir, but your line is breaking.
Am I audible? Sorry. Am I audible now?
Yes, you are. Are you talking about the gross margins for the consolidated or the Yeah.
Yeah.
Both. This time we have explained that the cost of production was a bit high when compared to the previous years and especially crops like cotton and even that has impacted us to some extent, and we were not able to pass on everything to the farmer. That we already mentioned in the first quarter result, where we are seeing impact. When you are talking about this quarter, the gross margins fell by 4%.
compared to previous year, which is in line with the consolidated one.
The key reasons in this quarter is given that cotton has a very low season this quarter. Why would gross margins have fallen this quarter specifically?
Even in maize and rice, the cost of production is a bit high when compared to the previous years. Usually we used to sell higher in terms of high rates in rabi, but we were not able to pass it on to the farmer this time. So that 2%-3% has impacted this quarter. But it will not continue going forward because the production prices have already stabilized now. We do not see that going forward.
All right. Sir, secondly, you spoke about cash at INR 310 crores versus INR 410 in the previous quarter. Sir, has there been further investment in working capital, either due to inventory or debtors, and do you see this normalizing going ahead in Q4?
Yes. If you see the overall inventory levels, if you take the overall cash flow, majority of that, close to INR 100-200 crores plus, has been into the inventory. Even the inventories are higher, trade payables are also lower when compared to the previous year.
I think once the season goes on, it will normalize it. As they build the inventory, that's the reason we are seeing some sort of cash outflow towards building up the inventory. Some to be towards the CapEx, but not much.
Sure. Sir, lastly, sir, I wanted to get your sense on the cost of production for the coming season across cotton and non-cotton crops. Now that you would have received a lot of the cotton stock for the next season, how is the next season looking like, especially for all of these cotton, maize, and rice on both cost of production and the general outlook on the season?
Basically, when you compare to year-on-year basis, if you compare to last year to this year, the cost of production has not gone up. In some cases, it has in fact gone down when compared to the previous years. Even though if the costs are stable, then any of you will increase the prices to some extent that can be absorbed. It will normalize to what it used to be earlier in between that 45%-48%.
All right, sir. I'll get back in with you. Thank you.
Okay.
Thank you. Our next question comes from the line of Saania Jain from Care PMS. Please go ahead.
Hi, thank you for the opportunity. My first question was for the non-cotton segment. The other crops category has shown a strong growth at 59%. Could you please elaborate what are the key drivers behind this growth? Is this export-led?
It's a combination of all the other crops. Other crops include wheat, mustard, bajra, sunflower, everything comes in the other crops. The mustard and wheat moves in this segment. That's the reason we have seen a good growth in the other crop segment.
Okay. Could you provide the revenue breakup for this segment?
We don't have the revenue breakup as of now, but overall it's a very small portion when compared to the overall revenue. Because more than 80% of the revenues are contributed by three crops, maize, cotton, and rice. They're a very small segment which comes in a very few quarters, especially like third and fourth quarter.
Okay, got you.
But I'll try to cover the number when I will speak the next time. Yeah.
Okay. Thank you. I wanted to understand, we have mentioned in the investor presentation that research paddy volumes grew by 51%. What constitutes of research paddy?
Research paddy is nothing but a paddy which are the varieties which are developed by our own company.
This is not included in paddy sales?
Sorry. There are two types of paddy. One is hybrid paddy.
Okay.
There are two types of paddy. One is hybrid paddy, what we report, and the research paddy. Both are in the paddy segment. Research paddies are varieties, whereas hybrid paddies are hybrids. That's the only difference.
Okay.
We generally give the split of it.
Okay. Just a last question. What are your views on the draft Seeds Bill for 2025, and has there been any recent developments or updates, and what could be the potential impact of it on the industry or on the company?
No. In the new Seeds Bill, a lot of the things are trying to be addressed. One nation, one license. Most of the licenses are decentralized now. Proper registration of the hybrids, proper research, proper documentation, everything is coming in the new Seeds Act. It will be a very organized market, and it will be very helpful for the farmers in most of the things. Some are still debating on some facts, but overall, it looks good when compared to the previous ones.
Any recent updates that has happened?
No. The draft is circulated within the industry, and we all have submitted the comments, and more or less it should be passed any time.
Okay.
There may be one round of discussion also.
Okay. Thank you.
Thank you. Our next question comes from the line of Amit Agicha from HG Hawa & CO as a follow-up question. Please proceed.
Thank you for the follow-up, sir. With over INR 300 crore cash, what is the capital allocation priority? Like any inorganic opportunities or dividend buybacks, or what is the company's plan?
In the previous year, we have done all dividend. Anyway, we are giving it, we used to do all the buybacks in the last years. This year, because we were building up the inventory, we have seen some sort of a liquidity, I mean to say, the cash got stuck in these activities. So we have not taken any decision on it.
But in terms of the organic growth, we are open for it. Because as it is a very temporary situation what we are facing as of now, but maybe in next three to six months, the cash will be the free cash what we generate.
So that we are open for inorganic growth even as of now. But in terms of the buybacks, that have a meeting in the first quarter, the follow-up quarter, then we will decide about the buyback thing. We will take a decision for the buyback.
And the last question, sir. How is the company strengthening farmer loyalty and repeat usage, like in a highly competitive seed market? Are there any plans to digitize the farmer engagement, demand forecasting or deal analytics?
No, already we have done it. Most of that is digitalized now. We have the huge database of the only farmers follow-ups that are already there. We have digital marketing network. We have huge social media networks for that. We track everything from demand generation to the crop harvest.
Thank you, sir. I appreciate you answering my questions, and all the best for the future. Thank you. That's it from my side.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Sahil Malhotra, an individual investor. Please go ahead.
Good afternoon, sir.
Good afternoon.
My question is with respect to the demand received from income tax authorities. In two consecutive years, we have received a demand, and one year we received a demand for INR 56 crores and second year we received a demand for INR 70 crores. I would like to get an update.
How the management is pursuing these cases and whether in future we are getting this exemption from the tax authorities for the agriculture income or not, whether any provisions have been made in this regard or not? Hello?
Ladies and gentlemen, sorry, the management line has been disconnected. Please stay connected. We are connecting the management line again. Thank you. Ladies and gentlemen, the line for the management has been back. Thank you, and over to you, sir.
Hi. Sorry, the line got disconnected. I was just answering the income tax one. Our cases are pending with the Commissioner of Income Tax (Appeals). Once we get the outcome of the appeal, we will update the status.
Sir, are there any provisions we have made for this demand, INR 56 crore and INR 70 crore?
Provisions, we have made the appeal statement for that. Otherwise, we are showing it in contingent liability.
As such, no provisions have been made till now?
No, because we have cash, we have not made any provision for that.
Okay. When we are likely to get the update? Because one case was in 2024, and this case also around 9 months back. So when we are likely to get an update on these two cases?
Basically, there are three cases pending at the appeals stage. It has been almost 2 and a half years there. Most probably it should come back in the next 6 months or so, because the hearings are going on, the proceedings are going on. That should come back.
Okay, sir. Okay. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Anurag Jain, an individual investor. Please go ahead.
Good afternoon, sir. Am I audible?
Yeah. Please.
Sir, one question is a follow-up on the previous one regarding the cash. There is a dip in cash. How have the receivables moved during the last one year? Because maize seed is the one which has grown significantly compared to other seed varieties. Is there some significant sales to government agencies, government corporations for maize seeds? Is that leading to a buildup in receivables?
Not much. If you see actual receivables as of now, at the end of December 31. Last year, it was close to INR 175 odd crores. This year, it is close to INR 250 odd crores. Just INR 75 crores have gone up because the sale is also higher in this quarter.
We are just waiting for that. But we don't see any government portion in it. There is an insignificant portion of government in it. We are not worried about that. As a company policy, we provide anything more than two years are bandits. We don't carry it.
Okay. For exports, how do the receivables work? Are the receivables outstanding for longer?
No, usually we work on LCs. We don't give any credit there, but a few cases.
Okay. So the receivables would be pertaining to our domestic sales only, not for the exports.
Majority of them are domestics. We don't see any difficulty in getting it. At the year-end, it will get outlined. Usually, at the year-end, the outstanding are in between INR 80-90 crores or something like that. It should come back to those levels.
Sir, two years ago, there was some outstanding receivable with government corporation which was unpaid. The company had made a provision for it, but the company was still pursuing it with the government corporation for payment. What was the outcome of that?
Still we have pending payments there. We received some INR 3 or 4 crores. We are trying to get it. We are doing that, but it is all provided in the provisions.
Yes, sir. That part I understand, that it was provided for. Sir, another question is, there has been a sharp dip in maize prices.
For the farmers output, not for the seed, but for the maize prices. In light of that, do you expect there would be some correction in the volumes for maize next year because of the sharp dip in prices? Or do you expect the maize volumes to remain stable next year?
We think maize volumes should remain good and healthy, because acreages are going up and the usage is also going up. I do agree that the maize prices are down. In fact, it went down to as low as INR 1,200- INR 1,250, INR 1,300. But right now, it's close to INR 1,800- INR 1,900. Anything above INR 2,000, near to INR 2,000 is a good price for maize.
Okay. What would be the price at which the farmer would break even? At what price the farmer would break even?
No, farmer will definitely break even. But in terms of what returns he makes it, if anything close to INR 2,000 is a good return for him.
Okay. All right, sir. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Reminder to all the participants, if anyone would like to ask a question, may press star and one. Our next question comes from the line of Dhruv Saraf from Bowhead India Fund as a follow-up. Please proceed.
Mithun sir, the last two years have been good for maize acreage. A lot of companies had spoken in the past about there has been a shortage of inventory. Do you see that going next season now that everyone knows that maize is the hot crop and acreages are going up. Is there a chance that the market could see increased supply and hence there could be pricing pressure for the industry and for yourself as well for next season and beyond?
If you see, that is what happened this quarter itself. Because last year, by seeing the demand for the maize, everyone has produced more inventory, including us. All the industry players have produced more inventory. That is the reason the prices are also up in terms of the production cost.
There was a huge availability of inventory in the second last now. That is one of the reason why we couldn't pass it on to the farmer, and that also made some dent in our revenues. It will normalize now. It will normalize now because everyone has the inventory and everyone knows that.
Okay. Do you not see the risk of extraordinary flooding for Kharif 2026 as well?
I don't see that because already it's there in the inventory. As an industry, we all know that the inventory will be available.
Okay.
Everyone is working on that in their parameters.
Not a lot of companies have taken aggressive production for next season, you're saying.
No. In fact, for this year itself, the current running year, 2025-2026 financial year, most of the companies have taken aggressive production. That has resulted in extra cost of production for all the companies.
When you see the rabi for the third quarter results, what we are talking about, when we see the maize market, most of the companies have got huge inventory, and it was heavily flooded in the market.
Okay. Understood.
Already the prices what we used to sell, that will stabilize. That is the reason we were not able to pass it on to the farmer, and that is what one of the factor why the cost of production is gone up for us when compared to the normal years.
Wonderful. Anchor, the cotton season and the cotton crop for the last year must have been harvested. Have you received any feedback in terms of your performance of new products? You have seen products like the new two, three products you have launched. How is the market feedback been for them?
Our products have really done well, performed well, and we will see that good set of growth numbers coming in the next couple of years, starting from 2026, 2027. I mean to say like June 2026. We will get to see good revenue increase in that.
Finally, on cotton itself, do you see any increase in illegal seed this year? Do you see the volume going up again for illegal seed competition?
See that it will be in the same level as what ingredient at. It should be very sideways. We will have a good, basically because we will be taking some basically because of the performance of the hybrids.
Okay. Sure. Thank you, sir.
You are welcome.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Reminder, ladies and gentlemen, anyone who wishes to ask a question may press star and one. Next question comes from the line of Jasmine Sodhi from Wealth Advisors.
Yeah. So congratulations on the great numbers, first of all. Since we were just on the subject of inventory, I would like to specifically ask about the cotton inventory. Although I feel this must be an industry-wide problem because everyone is seeing a decline in cotton sales because of the illegal HT sales. What is our position of cotton inventory? Do we see any risk?
No, as of now, we will be, to the end of the season, I mean to say, available for the next season will be in between 8- 9 million packets for us, which is in line with our anticipation. As a cotton seed, in our case, most of the hybrids what we have produced are new hybrids, so they will have a life at least for the next three to five years. So definitely we will be liquidating them, so we do not see any threat in there. In fact, we will be taking a new production for this year also, which starts in the month of May, June of 2026.
Okay, great. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Reminder, anyone who wishes to ask a question may press star and one. Ladies and gentlemen, as there are no further question, we will conclude the call. Thank you so much for joining the call.
For any other information, please be in touch with Mr. Rama Naidu from Intellect PR on 9920209623. I repeat, 9920209623. On behalf of Kaveri Seed Company Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Thank you.