ICICI Securities: Kaveri Seed Logs Healthy Growth In Non-Cotton Seed Portfolio
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ICICI Securities Report
Kaveri Seed Company Ltd. reported revenue, Ebitda and profit after tax growth of 14.6%, 21.5% and 29.1%, respectively. Cotton, hybrid rice, maize and selection rice seeds reported volume growth of 5.1%, 44.4%, 6.7% and 23%, respectively.
With cost saving measures, Ebitda margin expanded 230 basis points YoY. Net profit grew 29.1% YoY. Kaveri Seed’s Q1 FY21 profit after tax margin (41.2%) was highest in past six years.
Revenues of cotton, hybrid rice, maize and selection rice seeds were up 4.8%, 53.2%, 8.7% and 28%, respectively.
10% higher sowing in Kharif season and early monsoon helped the company report strong revenue growth. Higher revenue growth of premium products boosted the realisations. Vegetable seed revenues were up 250% (albeit on a smaller base).
We remain positive on Kaveri with the success of non-cotton seeds and its market share gains in cotton seeds in new geographies of West and North India. Success of these initiatives will de-risk the current business model centred on cotton seeds in South India.
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