Kaveri Seeds Company Limited , announced its Q1 FY 21 ,financial results for the quarter ended June 30, 2020. The Board of Directors of Kaveri Seeds Company Limited approved the financial results for the quarter ended 30th June 2020 at its meeting held in Secunderabad on Thursday, 13th August 2020. The Accounts have been subjected to a Limited Review by the Company’s Statutory Auditors.
Mr. GV Bhaskar Rao, Chairman & MD , Kaveri Seeds , said “ Even as business activity in most economies gradually resume, we, at Kaveri Seeds, have fully adapted to the “New Normal”, and have seamlessly executed our operations in the last few months. Our unique business model which comprises of more than 40000 distributor touchpoints , continuous addition of new products to the portfolio , a robust product pipeline , strong inventory and investments done in R & D , building new infrastructure and processing plants keeping in mind the evolving environment . This has enabled us to ensure that the seeds reached the farmers well in time before the sowing season inspite of the pandemic crisis.
Our vision of creating an organization which does not have dependence on only one crop type has played out well given the changing climatic conditions i.e early / late arrival of monsoons and changing commodity prices may change the cropping patterns for a particular year .
We have gained market share in both falling and stable market across all crops. This determines our leadership in the entire industry. Maize & Rice has contributed significantly to our profitability. Our investments in integrated seed conditioning plant and biotechnology labs have helped the company to increase the germination vigour and longevity of the seeds. The biotechnology lab has fast paced the testing process making sure that the seeds reached the farmers on time inspite of the disruption caused by the pandemic.
Business Highlights
· Strong operational performance. Gross margins for Q1FY21 stood at 47.59%
· Net Sales for Q1FY21 stood at Rs. 719.48 crore, compared to Rs. 627.58 crore for Q1FY21 up 14.64% YOY
· Delivered strong operational performance. Operating EBITDA margins (excluding other income) at 39.88%
· PAT at Rs. 295.29 crore for Q1FY21 compared to 229.58 crore for Q1FY20 and a growth of 28.62% YOY
· Timely rains helped in increased early sowing for Cotton, maize and rice
o Cotton down in key states like Maharashtra , Gujarat due to fall in prices and adequate stock in market discouraging farmers to shift to Soybean in Maharashtra & groundnut in Gujarat
o Maize is down largely in Telangana which due to Govt Discouraged Maize & in other states like MP & Gujarat due to prices are down.
· Vegetable acreages are up YoY partly contributed by diversion from main crops
· Proactive planning and placement helped to increase sale
· Business is running well operationally despite the pandemic since company is in essential services
· Supply chain is smooth and there are no issues with respect to labor sowing of Millet crops has been delayed due to intermittent rains. Other crops like Cotton Maize & Rice Pulses have been sown well in time
Volumes Data
Cotton:
· Volumes increased by about 5% in Q1FY21
o Cotton sales increased slightly due to early sowing this year. Have gained some volume in North & West markets
Maize:
· Maize volume increased by 7% and increase in revenue by 9%
o Despite negative markets in Telangana, volume increased in all other states. Increase in value is driven by premium segment product portfolio contribution
Hybrid Rice:
· Volumes Increased by 44% & increase in revenue by 53% in Q1FY21
o Hybrid Paddy KPH 468 helped translate to strong growth & introduction of
o 2 New Hybrids KPH 471 & KPH 7299 have also helped to strengthen for future growth
o Revenue growth is largely driven by Premium product 468 and price increase
Selection Rice:
· Volumes Increased by 23% & increase in revenue by 28% in Q1FY21
o In selection rice, there has been consistent performance across geographies. Timely placement & rains has helped to grow across markets
o Revenue growth is driven by premium product growth and is more than general product segments
Vegetables:-
· Vegetable volumes increased more than 250% in revenue and volume also more than 250%
o Three major crops helped in the growth of Volume and revenue i.e. Hot Pepper, Okra & Tomato
o Three new Hybrids in hot pepper KHPH 1213 & KHPH 1225 & KHPH 1217 helped to translate strong growth in vegetables
o New Hybrids Kaveri 055 in Tomato has also helped to strengthen future growth
