Ladies and gentlemen, good day, and welcome to the Kaveri Seed Company's Q2 and H1 FY 2025 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 after the presentation concludes . Please note that this conference is being 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 risks and uncertainties. For a list of such considerations, please refer to the earnings presentation. I would now like to hand the conference over to Mr. Mithun Chand. Thank you, and over to you.
Thank you. Good evening, and welcome everyone to our quarter two, first half 2025 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 and answer session.
First up, financial highlights. Revenue from operations has registered a growth of 3% to INR 889.84 crore as compared to INR 863 crore first half of last year. EBITDA was at INR 299.68 crore, remained flat as compared to INR 298.87 crore in first half 2024. Net profit was at INR 279.41 crore as compared to INR 278.55 crore. It remained flat. Cash on books stands at INR 559 crore as against INR 732 crore in the previous half year. For quarter to financial year, revenues from operations were at INR 81.76 crore. EBITDA was at INR 6.89 crore. Net profit was at INR 3.49 crore.
The major highlights, board has recommended a 250% dividend, that is INR 5 per equity share on a face value of INR 2 per equity share. Increase in volumes in hybrid rice and selection rice and maize had resulted in increase in revenues due to good realizations. Non-cotton segment has grown by 24% in the first half of the year on account of major contribution like selection, hybrid rice, and maize have done well. Exports during the first half were impacted by unrest in Bangladesh. This has resulted in muted growth rates at revenue level and further below EBITDA and PAT. Increase in volumes in both selection and hybrid rice and maize has resulted in good growth rates on account of good realizations. Company's exports are to recover in the second half of the year during Kharif season as the situation in Bangladesh is stable now.
Operational highlights. The contribution of new products to volumes of bajra were up from 59%- 73%. Hybrid rice volumes increased by 18%, and revenues increased by 28%. Selection rice volumes increased by 20% and revenues by 34%. Maize volumes increased by 9% and revenues by 24%. Vegetable seed volumes increased by 11%, whereas revenue decreased by 13%. Exports sales stand at INR 6.1 crore in first half of 2025 as compared to INR 25.93 crore in the first half of 2024. The decline is due to political unrest in Bangladesh. I will now open the floor for question and answer session.
Thank you. We will now begin the question and answer session. Participants who wish to ask a question may press star and one on your 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. We have the first question on the line of Dhruv Saraf from Bowhead India. Please go ahead.
Good afternoon, sir. If I just look at your maize revenue growth in H1 2025, which is up 24%, and if I were to just knock off Q1 of this year. What I see is in Q2, maize has de-grown for the company bio-wise to the tune of around 30%-40%. What could be the reason, sir, given that other competitors have shown good results in maize in Q2 specifically?
Our majority of the sales were done in the first quarter itself. Even though it is in the second quarter, it is nothing but a spillover of first quarter. We had a good sale in the first quarter. I do not know about the other companies. They might have done their sale in the second quarter. But it is all of a half to half comparison is a good comparison.
Right, sir. There could be some front-loading that happened, which is why Q2 was subdued basically.
Not exactly front-loading, but we take the actual liquidation of the stock, but the areas where we operate, the liquidation might have taken place in the first quarter itself.
All right, sir. That helps. Just to understand the difference between standalone and consolidated numbers for this quarter, so we see that this INR 40, INR 50 crore, INR 50, INR 60 crore difference. Could you just tell us what this difference is on account of?
Sorry?
The difference between standalone and consolidated numbers.
Huh?
What explains this difference? I mean, what leads to this difference between standalone and consolidated number of Q2?
You just wanted to have the consolidated for the Q2, only for the Q2?
Yeah. Consolidated for Q2 is at INR 137 crore, whereas standalone is INR 85 crore. There is a difference of INR 50 crore that we see. What account for this difference of INR 50 crore?
Basically, we have other four subsidiaries in the company. One is Microteck, Genome, Genomix and Aditya Agri Tech Private Limited. These are the contribution from those companies.
Sure. All right, sir. Thank you.
Okay.
Thank you. We have the next question from the line of Gunit Singh from ECI. Please go ahead.
Hi, sir. I want to understand with the new tax regime, would we still be able to do buybacks going forward or buybacks are out of the question?
Again, it is a management decision what we need to take, but we have still more time for the buyback because we have completed the buyback in the last March. So we will decide in the later course of action.
Yeah, you will decide, but I am saying that, is it still possible with the new tax regime, or is it practically impossible now with the new tax regime? I want to understand the processes of management on this.
That's all that we need to discuss and decide on. It's not an individual decision, it's a board decision. We see how the shareholders get benefited out of it. We will most probably in the next quarter or so, we'll have a clear clarity on it.
All right. Currently you haven't had a discussion regarding this fee yet?
Yes. Still we have some more time left for that.
All right, sir. Got it. Thank you very much.
Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question from the line of Nitin Awasthi from InCred Equities. Please go ahead.
Hello sir. I wanted some volume numbers. If you could shed light on your four core products. How much was the sale in volume terms for the first half of this year? That would be cotton, hybrid rice, selection rice, and maize.
You want the overall volumes?
Yes, sir. Total volumes just for these four products.
Usually we are not disclosing volumes as of now. But if you want, I can give the overall company volumes. Let me think. For the first half of last year, we had done volumes for 3 crore 97 lakh kg. For this year, we have done 4 crore 39 lakh kgs.
Okay. What has been the realization in the first half for per packet of cotton?
The realization is around close to INR 734.
Okay. So INR 730 odd rupees. Sir, next thing I wish to understand is how much is the maize market expanding by. What was our share, and where do we indicate to go with the growth in the market?
As of my CC, compared to last year half to this year half, the maize was up by close to 8%-9%.
Mm-hmm. Total.
Total as in India level, 8%-9% level. Just to say 5%. It is in the single digit numbers between 5% and 8%. 5%-7% is the total growth rate. Going forward, we see a good acreage coming in maize as the economical plans are also coming up. The maize rates are good. It is much remunerative for the farmer now. We think going forward, maize as a crop should do well.
Sir, the market share bit?
Market share of Kaveri?
Yes.
At present, we have market share of around 8%-9%. Year- on- year, we think that we can grow our market share, especially in maize. We have very good pipeline hybrids in maize. Not only that, even it is much visible in the first half. You can see, even though the cotton is down by more than 30%, close to 30% in the first half, we were able to match our revenues as we have increased our sale in both rice and maize segment. Overall, you can say non-cotton segment. Going forward, we see a very good growth rate coming in for these crops.
Understood, sir. The main season for maize, where you have the higher sale, maize is normally a crop where in H2 our sales are higher than H1. This year again and going forward, do you expect similar kind of growth or more growth in H2 for maize?
I do not think so. Usually, H1 contributes to the majority of the maize. Even from last year, the maize was around INR 120 crore out of INR 490 crore.
Okay.
Anyhow, H1 can dominate the majority of the time. But in the second half sales, maize is the only crop which contributes more to the revenue.
Understood, sir. That is all, sir. Thank you.
Thank you. We have the next question from the line of Harsh Vora from DR Choksey. Please go ahead.
Yeah. Hi, sir. My question is regarding table segment. If you can just throw some light on the drop in revenue we have witnessed in H1. How do you envision the growth of this segment over the next three years, and do you see any export potential in this segment?
You are talking about export or cotton?
No, vegetable seeds.
Vegetable seeds, if you see the overall first half, there is a slight decline of 2.5%, 3% growth. It comes to 12% odd. The season just got delayed this year because of the heavy rainfall in most of the parts. We do not see any threat in vegetable seed. We are pretty confident that we will grow in vegetable as desired. That will be contributed in the second half of the season.
Got it, sir. Any export potential going forward?
Last year, if you see the overall exports of around INR 65 odd crore, we had done close to INR 25 odd crore in Bangladesh itself. Other sale in Tanzania of INR 27, 28 crore, as if you recollect, last year con call, we said that's one of the sale because we had done a government sale. Especially in terms of Bangladesh, out of this INR 24 crore, we might lose INR 10-INR 1 2 crore in export because we already lost the season because of the entrance. We are trying to get that sale in some other parts of the world because we are starting in other countries like Vietnam, Ivory Coast. We are getting orders from there. We see that some of the revenue should be covered in those parts.
If you see as the overall growth of exports, leaving one year like this, but overall, if you see, we would grow in export as well as we are entering into many other new countries, and we are getting very encouraging results from those countries where the hybrids are really doing well. We are pretty confident about export business as well.
Got it, sir. You're planning to do exports across all products then?
Yes. Especially all products in a sense, not cotton, but basically maize, rice, and vegetables.
Got it, sir. Thank you so much.
Thank you. We have the next question on line of Sanjiv S from Dream Rider. Please go ahead.
Hello.
Hi.
Hello.
Sanjiv, your audio is not very clear. Request you to go on the handset mode.
Hello. Is it audible now?
Much better. Come closer to the microphone.
I just wanted to get a sense of how the government business is panning out.
Government business for our company?
Yes.
We don't participate much in the government subsidies. If you see the revenue of the company for this year is hardly some few crore. Even I doubt that. It's in the single digit, not more than that.
Okay. And hello.
Yeah.
Are there any new products that have been launched or are in the pipeline going forward?
That is a continuous activity what we do. We always try new products in each and every crop segment. We have launched some hybrids in maize, in cotton, even in rice, and even in other crops as well, including bajra and wheat, mustard. That is regular activity, and apart from these hybrids which are launched, there are many other hybrids which are in the pipeline, which also have a good potential in the future years.
How much would be the share of new products launched in the overall revenue?
That depends on the crop to crop. Usually, the hybrid which is launched in the last three to five years, we call it a new product. The overall contribution will be in between 20%- 35% in every year, in the range of 20%- 35%.
What would be the CapEx for the current fiscal?
Most of the CapEx is already done. We might invest other INR 25- INR 30 crore for this year, and year on year, we always say INR 35- INR 40 crore, but INR 25-I NR 30 crore should be more than enough.
Okay. We have substantial investments also, and since we have most of the CapEx we have already undertaken, is there any plan to distribute surplus cash to investors to maybe higher dividends or buyback?
If you see in the last seven, eight years, we have done more than six buybacks, and every year we are a dividend-paying company. We have just completed our buyback in the month of February, March. Always we try to distribute cash which is not required for the company. As earlier I answered the question regarding the buyback tax has now changed. We need to take a decision on that. I think in the next coming quarters, we will have a clear clarity on that.
And sir, reservoir levels are almost 87% filled and-
Sorry, which levels?
Reservoir levels.
Okay.
They are expecting good demand as well as output in the Rabi season. How should that kind of lead to
More or less, Rabi for us is a very lean quarter. Usually second half is a very lean quarter when compared to first half. Most of the crops are like wheat and rice, which are all selection rice and some sort of maize. For maize, we think it will be in line with last year numbers. Vegetables is a very small segment for us, but we see a good growth in vegetables. But overall, if you see second half, we should be in line with last year numbers.
Okay. Okay, sir. That is it from my side.
Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question on the line of Anurag Jain, an individual investor. Please go ahead.
Good evening, sir. My question is, for the half year balance sheet, the outstanding amount for biological assets is at INR 383 crore. This is the highest ever in last four or five years. Is this indicative of the anticipated growth for next year? Is the company undertaking higher production for the seeds for use in next one year?
Yes, well, that's one way to look at it. As rightly said, the production is pretty high this year and I think we have one of the largest production what we have taken in the company's history. Most of the inventories are at almost zero levels, so we are trying to procure more. That is one of the reason where we see higher production. The other thing is that we see very good areas coming up. I mean, these are very good volumes. We are anticipating a good volume for the next coming years. In a combination of both, the production is more and that same is affecting the balance sheets.
All good. Thank you.
Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question on line of Dhruv Saraf from Bowhead India. Please go ahead.
Sir, we had some challenges in cotton in terms of production over the half year. Is it fair to say that these challenges are now behind us and the next cotton season should be good for us in terms of volumes at least?
Yeah, the kind of production what we have taken up this year and the present crop yields what we see usually now, unless and until something really bad happens with the climatic conditions. Otherwise, we'll get the anticipated production and with a good yield. I don't see any challenge in the production for the next year, not only in cotton, but most of the crops.
Right. Also, I had a question on high-density planting. In detail, there have been some actions and things led by the textile industry as well regarding promoting the use of high-density planting practices in cotton. Are you seeing any action happening on the ground or is it just still more words than action?
Basically, most of the companies, including Kaveri, is working on high-density planting. But we are yet to get a very suitable hybrid which gives better yields. But the research is on. Definitely, as the minister said, and the industry is trying for it, definitely down the line, the future of cotton seed will be high-density plantation.
Okay.
The other reason, not only high density, but the other reason is that even to get daily labor is also getting difficult, farm labor especially, to pick the cotton seeds. So it is a need for the cotton crop to be mechanized. The picking of cotton crop should be mechanized. That is also one of the reason why the industry will move to high-density planting.
Right. Sir, you have launched a product, I think it is 9392. Was it specifically for high-density planting or is it agnostic of that?
It is not exactly for high-density planting, but if you see the crop, it is slightly high density, but it is not like what is there. High-density plantation is nothing like that. It is more than double the seed rate what we sow now. At least double. It is more than that, but at least double.
All right. Sure. Thank you very much.
Thank you. We have the next question on the line of Rohan Patel from Turtle Capital. Please go ahead.
Yeah. It's clear now.
Mr. Patel, your audio is not very clear. If you could kindly go off speaker phone.
Sorry. Hope so now I am audible.
Yes, we can.
Yes.
Considering that this year our base for the cotton is the lowest and we expect that next year there are no more production challenges. With this low sales base, how much can cotton grow from here? Can we get that close INR 350 crore, INR 400 crore base next year?
One second, please. Just seeing what are the this year figures for the exact in the cotton. This year we have done altogether like five. If you see cotton as such, we have done close to INR 340 crore this year itself, INR 350 crore I think. Mm-hmm. Yeah.
Yeah.
One question.
Presentation, is it shown H1 that you did INR 258 crore?
INR 258, one second. I just need to check. It should be. Sorry, I'm taking last year. Sorry. Right, you are right. Cotton, we have done 93, yes. We have done around INR 250 odd crore.
Yeah.
Next year it should be at least 20% more than what we have done now.
Okay, 20% more than what we have. Considering that our non-cotton, the base is higher, we are growing around 25%-30% in all of the hybrid selection. Will this trend continue?
What we see is that overall this year we had a very muted growth because there are a couple of reasons. One is the cotton, we are down by more than 30%, and the other thing, we are slightly down in terms of the exports. The exports were not as anticipated, for whatever reason it is. Going forward, what we see is that 10%-12% growth and 15%-18% of the bottom line should much reflect. Next year as we see, as cotton is already low, we will at least grow by 20% in cotton next year. Other crops, we see a good potential in most of the crops. So next year the growth rate should be in that 15%-20%.
15%-20% should be the growth rate for next year?
Yes.
That would lead to 20%-25% growth in bottom line?
Actually, more than 20%. I am sure of 20%+ .
And we were going to bring some. We have lost market share in cotton due to our hybrids being mature enough, and we were planning to bring two to three new hybrids in cotton to get back our market share back. So how is the progress going over there? Have we started commercializing?
Yeah. For the next year, what I am saying of the 20% growth, basically it is only because of these new launch products. We are seeing good traction in those products and we have given good production for those products as well. So those are the major contributors for the growth of next year.
Okay. After we reach back towards INR 350 crore base in cotton next year, so how will cotton as a portfolio grow from over there? Can we come back to a INR 500 crore product cotton? Can cotton be INR 500 crore again, like what we used to have in?
Sure. What we believe internally is that we have very good pipeline products which are yet recently launched are also giving very good results. We are pretty sure that we can go back to those previous levels what we had. It's a matter of three or four years from now.
Okay. Taking a medium to long-term time horizon, the non-cotton portfolio should be growing at a rate of somewhere around 15%? Can we expect that?
Already we are one of the biggest in the non-cotton segment and as a crop it's growing, and as a company we are growing much better than the industry. These two combinations should, as a mix of all products, not particular to cotton drive, but we have many other products like mustard, bajra. There are many other products. As a whole, if you divide both cotton and non-cotton segment, as cotton is with a low base, it should be in that 15%-20% in the next three to four years, and we should be in between 20%-15%. Overall as a company we see 20%-15% growth very conservatively.
Okay. Yeah. Thanks for answering the questions, and best of luck for future. Thank you so much, sir.
Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question on the line of Mohammed Patel from Care Portfolio Managers. Please go ahead.
Yeah, hi. This is a follow-up to the previous participant. The non-cotton has done really well in FY 2025, and the base is high. Should we expect non-cotton growth to slow down in FY 2026 to single digit?
We do not see any single digit growth. It should be a double digit growth. It may not be like that 45% or so, but it should be in the 12%-15%.
Even on this higher base?
Yes.
Okay. My next question is, exports was INR 6 crore in H1 FY 2025. What should be this number for H2 roughly?
Overall we have done INR 66 crore last year in terms of the exports. As I said earlier, there was a one-time sale of INR 28 crore in Tanzania, which we don't know whether we'll get it or not. That again depends on the government policy. Other thing we have done INR 24, INR 25 crore in Bangladesh. So INR 25 crore of Bangladesh sale will be like INR 12- INR 13 crore this year, as we have already lost some sale in the second quarter. Whereas the decline in Bangladesh sales may be INR 6 or INR 7 or INR 8 crore might be covered in other parts of the world, like Vietnam, Ivory Coast and other countries we are exporting. So that we have a chance to cover. But in terms of the Tanzania we need to see whether we'll get this type of order or not.
Going forward if you see export as a segment, it will grow at more than 15% as a whole on year-on-year basis. We need to take the base of this year. From this year we can easily grow at 15%-20% in vegetable in export market.
You think it's to be INR 20 crore or excluding Tanzania?
It should be much better than that.
Should be better.
If you see exact like we have done only 6 crore from first half of export this year, next half should be in between INR 30-INR 40 crore.
Excluding Tanzania.
Overall. Tanzania we do not know but it should be what plus or minus should be INR 30 crore and INR 40 crore.
On that base we can expect to grow at 15%-20%.
Yes.
Thank you.
Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. As there are no further questions, this will be the end of the conference. Thank you for joining the call. For any other information-
Thanks.
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 for joining us. You may now disconnect your lines.
Okay.