Kaveri Seed reports 13% decline in Q2 profit

The net sales of Kaveri Seed has gone up by 27 per cent to ₹117.66 crore in the quarter ended September 30, 2019, as against ₹92.56 crore in the same quarter last year. The net profit saw a decline by 13 per cent at ₹13.52 crore in the quarter as against ₹15.52 crore.

In the first half, the company posted net sales of ₹745.23 crore as against ₹671.29 crore in the same period last year, showing a growth of 11 per cent. The net profit stood at ₹244 crore (₹225.62 crore), showing an increase of 8 per cent.

“Revenues have been impacted as the season ended. We, however, expect revenues to go up in the next two quarters because of good rains in September and October,” C Mithun Chand, Executive Director of Kaveri Seed, has said.

“Cotton volumes increased by about 16 per cent in the first half. We have gained in cottonseed market share in Gujarat, Maharashtra and Northern markets. Contribution of new products went up from 14.36 per cent to 23.57 per cent of volume,” he said.

Cottonseed sales witnessed an increase in the quarter due to extended sowing season in Andhra Pradesh and Karnataka due to delayed monsoon which was followed by the prolonged monsoon.

“The volumes in maize sales and revenues had come down by 16 per cent and 6 per cent respectively as the acreage came down due to late arrival of monsoon. Volumes in hybrid rice and non-cotton business have gone up,” he said.

He said the operating EBITDA margins (excluding other income) stood at 14.58 per cent in the second quarter as against 10.46 per cent in the comparable quarter last year.

Outlook

Mithun Chand said high commodity prices across the board to keep the sentiment positive among the farming community. “Maize and rice area for rabi season is expected to go up with the increase in groundwater table due to normal monsoon and stable commodity prices,” he said.