Kaveri seeds company limited -- kscl


(Hitesh Patel) #1075

venkatesh,

The list u put up extends to some more pharma companies like etc., Housing finance companies etc, manufacturing/consulting companies like newspaper companies etc. Kitex is under my watchlist. I would want to watch it for any improvement in business fundamentals.


(Mukesh Tolani) #1076

An interesting read this ;


(MHS) #1077

India “not scared” if Monsanto leaves, as GM cotton row escalates -

U.S. seed company Monsanto is welcome to leave India if it does not want to lower prices of genetically modified cotton seeds as directed by the government, a minister said on Wednesday, in a sign the rift between New Delhi and the firm is widening.


(Rohit) #1078

In case if monsanto leaves india…what could be the potential effect on Kaveri seeds…Does that mean they will loose all the cotton seed business…which makes around 70% of the total revenues…Please some one answer this if I am interpreting this wrong


(Srinivasan Sundaram) #1079

Worth reading…

How Monsanto found an able adversary in the Sangh parivaar


(Amit Mantri) #1080

KSCL management had said in the concall that the forensic audit initiated by SEBI was a routine matter. SEBI response to RTI request - Has initiated only 2 forensic audits over the last 3 years (including KSCL). Seems like SEBI rarely takes such a step.

SEBI response attached.


(Varadharajan Ragunathan) #1081

Wow amazing diligence amit - keep up the good work.


(Somenath Paul) #1082

Thanks Amit for filing the RTI and getting the response.


(Mukesh Tolani) #1083

Good to see the initiative taken by you., Amit


(Kamal Raj M M) #1084

A good initiative, Kudos to Amit,

But the reply from SEBI and KSCL is contradicting.

KSCL is saying it is a “routine matter” but SEBI’s reply implies it is a “rare event”. Now I understand it is upto us to seperate the “Chaff”, but I am concluding that the doubt on KSCL is still unresolved.

Correct me if I am wrong.


#1085

Think again. The 50% loss is not notional, but real.


(narenarora) #1086

Rough notes on Kaveri Q4FY16 concall

Q4FY16 concall Rs. Cr
Revenue FY16 FY15 FY16 FY15
Cotton pkts - lacs 55.86 86 540 790
Maize - tons 9150 10067 157 162
Paddy - tons 2000 1510 80
Lint 48 39
Others ??
825 991
Royalty paid cr 38 155
(11 lac pkts in maharashtra. Total mkt in maharashtra = 1.3 cr)
Total market size = 75000 mt. Mkt leader - Dupont, Monsanto

Jadoo volume FY16 = lac pkts 35
Jadoo volume FY17E= lac pkts 44

AP and telangana state govt discouraging farmers to go for cotton. Hence acreage may drop in FY17

FY17 guidance - cotton 6.5 to 7 million packets
FY17 guidance - non cotton 23-25% growth over FY16

Maize acreage may go up…… Due to good expected monsoon

EBIDTA - non cotton = 28-30%
Cotton seeds market size 5.3 cr 14-15
4.3 cr 15-16
4.2 cr 16-17 E

EBIDTA per packet - cotton seeds - Rs 200

KSCL expects 20% volume growth in FY17 over FY16 resulting in market share gains

Strategy for market share gains

  • extending credit (mainly in telangana)
    Wont compromise on margins
    of the 20% volume growth targeted…10% (about 5.5 lacs incremental pkts growth from maharashtra)

employee costs….9 cr per quarter - standalone. 11cr per quarter - consolidated

Decision for utilisation of around 500 cr towards dividend or buy back in Q1FY17 con call

Forensic audit is under process. May take about 1 year to complete

New plant in karim nagar…… near main paddy growing area
Capacity = 10mt per hour

Production cost - cotton seeds FY16 340 per pkt
Production cost - cotton seeds FY17E 380 per pkt

The incremental cost would be passed to dealers (reduction in discount) and farmers

Mithun Chand interview - 11/May…CNBC

	Impact of changes in MRP and Royalty

Particulars Earlier Current
MRP of cotton seeds 930 800
Royalty (incl of service tax) 185 49
Net 745 751

So there is no impact on margins due to reduction in MRP as royalties have been reduced correspondingly
However, the production cost is likely to increase in FY17 (refer concall notes above)

Disc: Tracking. Not invested


(Rohit) #1087

Any updates on account recivables ? are they improved ?


(Yogesh Sane) #1088

Area under sowing for kharif cotton crop is down by 20% while it is up for almost everything else as of July 15 2016 (Source ministry of agriculture). However, total sowing area is up by 4% this year compared to same period last year. Looks like farmers have switched from cotton to pulses and other cash crops. Monsoon is also delayed this year. that will push some seed sales to July from June. This will impact June qtr sales which is a major qtr for Kaveri.
If June qtr results are bad stock will take a beating. No news on SEBI audit yet. So that’s another overhang.


(narenarora) #1089

Thought of sharing this article in todays ET (20/Aug/16). The landscape for GM seeds appears to be very large…it covers maize, soyabean, cotton, potato, canola, papaya, alfalfa and squash. And there would be many more to come.

From the article one can deduce that Nuziveedu seeds equation with Monsanto has soured significantly. Wondering whether - Once the Monsanto - government issue is resolved…would it be a significant advantage for Kaveri Seeds?


(Rohit) #1090

Any updates on the results…I cant see anything on BSE website.
This quarter is usually the most important quarter and results are still not out…


(Yogesh Sane) #1091

Monsanto pulls new GM cotton seed from India in protest

This is not a good news for Kaveri. 70% of their sales come from BT cotton and they and other seed companies depend on Monsanto for developing new varieties of seeds to protect against pests that develop resistance to existing seeds.

Earlier this year, govt put price controls on private royalty price arrangement between Monsanto and seed companies. Monsanto had threatened to pull out of India. Govt has since withdrawn the order but Monsanto is still pulling out.


(Tolaha) #1092

If not from Kaveri and other Indian seed companies in similar position, then from where will the farmers buy cotton seeds? So this should be bad for all Indian seed companies. The farmers might shift to other crops and that should be a big push for cotton prices.

Going by the tough stance taken by the government, hoping that they have the indigeneous solution for this around the corner.


(Amit Mantri) #1093

Kaveri Seed made a 3 cr donation to TRS in FY15


(narenarora) #1094

http://economictimes.indiatimes.com/markets/commodities/indian-scientist-develops-genetically-modified-cotton-after-success-with-mustard/articleshow/54034384.cms