Kaveri Seed Q2 Revenue Rises 30%, Narrows Loss

Q2 FY27 Performance (YoY Comparison):

Revenue from operations: ₹125.44 crores (up 29.84% from ₹96.61 crores in Q2 FY26)
EBITDA: ₹5.42 crores (compared to a loss of ₹6.47 crores in Q2 FY26)
Net Loss: ₹3.21 crores (narrowed from a net loss of ₹15.05 crores in Q2 FY26)

H1 FY27 Performance (YoY Comparison):

Revenue from operations: ₹940.44 crores (compared to ₹1,041 crores in H1 FY26)
EBITDA: ₹286.68 crores (compared to ₹315.88 crores in H1 FY26)
EBITDA Margin: 30.48% (compared to 30.32% in H1 FY26)
Net Profit: ₹268.09 crores (compared to ₹301.45 crores in H1 FY26)
Cash on books: ₹178 crores

Q2 FY27 Segment Growth:

Product-wise Performance (H1 FY27):

Maize: Revenue was ₹188.47 crores, a decline of 36.3% YoY. Volumes were down 36% due to a nearly 30% drop in sowing acreage in Karnataka. New single-cross hybrids contributed a substantial 21.8% growth in the maize portfolio.
Cotton: Contribution from new products increased to 37.7% from 21.4% last year. The company has established a strong foundation with new products in northern (Haryana, Punjab, Rajasthan) and southern markets.
Hybrid Rice: Revenue was ₹264.4 crores (vs. ₹282.56 crores YoY). In Q2, hybrid paddy registered significant growth to ₹17.33 crores.
Vegetables: Revenue was ₹25.99 crores in Q2 (vs. ₹31.77 crores).
Other Crops: Revenue was ₹70 crores.
Exports: The export business grew 71.6%.

The Board declared an interim dividend of ₹5 per share, i.e., 250% of the face value of ₹2 per share.
The dividend payout amounts to ₹33.07 crores, up from ₹12.56 crores in the previous period.

International Expansion:

The Board approved the incorporation of wholly-owned subsidiaries in 8 countries: Tanzania, Kenya, Vietnam, Thailand, Philippines, Indonesia, Zambia, and Peru.
These subsidiaries will focus on product registration, research, and distribution to build the company's own brand internationally.
The process of registration and establishing a brand is lengthy, taking 3-5 years per country.

Inventory:

Inventory levels are high (approx. ₹1,200-₹1,300 crores) but consist entirely of new produce from this financial year. Management does not anticipate major write-offs as the inventory is properly stored and has good germination vigor.
The majority of inventory is in rice, cotton, and maize.

Guidance:

For the full year, management anticipates revenue to be approximately ±10% of the previous year's standalone second-half revenue of ₹260 crores.
EBITDA margins are expected to remain stable or be slightly positive, supported by good export traction and the northern cotton market in Q4.

Illegal Cotton: Management acknowledged the challenge but stated the market share of illegal cotton is marginal and growing only marginally year-on-year. The company is combating this with new, superior hybrids.
Margin Pressure: EBITDA margins were down slightly (~1%) on a consolidated basis. The decline is attributed to higher expenses in subsidiaries.
Subsidiaries: Aditya Agritech and Genomics are marketing companies that sell seeds supplied by Kaveri. Their revenues are not ₹100 crores each, and profits are significantly lower (approx. ₹8-10 crores).
Dependency: The hybrid rice business has a large dependency on the '468' variety, though new hybrids are being introduced.
Cash Flow: The decrease in cash position from the previous quarter is attributed to higher inventory levels and payments to creditors.
CWIP: Capital Work in Progress of ~₹120-130 crores is primarily for agricultural land (50-60%) and machinery/office assets. The land is not yet registered, causing the capitalization delay.