Isnt everyone thinking exactly like you do…? Think this is low risk entry point to wait out the next 6 months… because the stock will start moving much before the next Q1 earnigs in anticipation…
Hybrid rice might be down due to Rice acerage shriking this year.
Dic: Invested hence biased
The present price is a long term support for the stock. So it’s a good price to accumulate since the fundamentals are changing.
Earnings call transcript link here
Seems they don’t have much pricing power as their volumes have been increasing yet their revenue has been stagnant. Besides, this time, the excuse of illegal BT is not valid as well. This is a bit of concern.
However, the mgmt is quite confident that this is a temporary phenomenon. They mentioned this almost 3 times during earnings call.
The mgmt seem to be conservative and shareholder friendly. Besides, there is a huge barrier to entry. A single hybrid seed would take 2-3 years to be grown and then has a life of 3-4 years. This long cycle, coupled with huge R&D spend is something that can keep competitors at bay.
Need to watch for margin improvements in next few quarters. The R&D efforts and CAPEX should ideally result in more volume growth and margins should revert back to usual. In thats the case, the earnings would improve and potentially PE rerating would occur.
Disc: Invested and might be biased
market not reacting much to this so it appeares it alredy priced in as this has been ongoing concern for some time for all seed companies…
buy back up to 700 rp per share…
Can someone help me understand what Mr. Mithun means when he says "promoters are not eligible to participate. We are not participating? "
Aren’t promoters the one who came up with buyback 
Source: Nov Concall
Board of the firm has approved the buyback and yes as majority shareholders; promotors must have agreed to the idea, thats right.
But since its not a tender based buyback, company will buy the shares to the limit approved (125.6Cr) from the open market and promotors not participating means they will not sell their holding in the market during this period of buyback.
Does it mean, always in any buyback program, the promoters can participate only through tender route and NOT through market route ?
Yes. Correct. Promoter CAN NOT participate in Market buyback method as per law.
Kaveri seed has seen an impressive rampup in rice and vegetable revenues over past few years. However, due to cotton sales decline, consolidated sales have not shown much improvement.
FY23Q4 concall notes
Disclosure: Invested (position size here, no transactions in last-30 days)
Just to add, in Bangaladesh, they are giving a good fight to MNCs and they are looking at expanding to other markets as well. But, unlike other products, in this case farmers need to be educated and convinced about the efficacy of the seeds. This will take some time (2-3 years) until the brand is established.
I also feel very safe with the management with their capital allocation strategy. They do not spend the earnings on questionable investments. For example, when asked about investments on GM technologies, they mentioned that it is much cheaper to license those from Monsanto and other companies and there is no monopoly by monsanto there. Besides, they give our consistent dividends and also buy back shares regularly.
There is heavy competition and they are susceptible to ups and downs of agri sector. But, they are growing slowly and steadily. As mentioned by @harsh.beria93, the consolidated results do not show the read efforts due to the drag of cotton.
If one expects rapid growth, then this is not the investment. However, the valuation of stock is quite low and the company is yet to achieve economy of scale in varieties of crops as well as expanding into export market. It will take 2+ years for the growth to kick in. Until then, we can enjoy our dividends 
Disc: Invested around 5% of portfolio
It’s amazing how you continue to keep track of so many cos in a systematic manner @harsh.beria93
My two cents on the current situation of this once multi-bagger:
Revenue hit an upper cap of 1000-1100 Cr in 2015 and the company has struggled to breach that mark in the last 8 years. Noticeably, 2015 was also the year when the tide turned for the stock price. There are sectors where companies grow to a limit and hit a ceiling revenue because of externalities and fragmented market structure. This seems to be one such sector.
Cyclicity: Cotton seeds are still the largest contributing segment and due to its cyclicity of demand, there is cyclicity in Revenue, Profitability, EPS and hence in the stock price. This has been mentioned in this thread earlier by @Shresth_Toshniwal . Below chart shows Qtrly Revenue, Net Profit, EPS & Stock Price since March-20. This can be charted for earlier periods as well.
The company is changing its segment revenue mix to focus more on non-cotton segment (Rice & Vegetable seeds), yet there are too many externalities which it cannot control, viz: monsoon variation, govt. policies, illegal BT-Cotton in market, etc.
Disc: Not invested.
Kaveri Seeds Q1 FY 24 concall highlights -
Sales - 736 vs 686 cr
EBITDA - 278 vs 247 cr ( margins @ 38 vs 36 pc )
PAT - 275 vs 245 cr
Cash on books- 741 vs 560 cr
Q1’s PAT > FY 23’s PAT
Delayed monsoon impacted sowing of Maize. Expect maize sowing to pick up in Rabi season
Sunflower, Mustard seed exports to start from second Qtr. Expect Maize, Vegetable seed exports to grow in Q2
Company banking on new products to boost profitability
Company’s export focus is on - Bangladesh, ME, Vietnam, Cambodia, East Africa, Phillipines
Company’s products (seeds)-
Cotton, Maize, Rice, Bajra, Sunflower, Vegetables
In Q1, cotton volumes were stable, revenues up 9pc
Bajra, Hybrid rice volumes were also stable
Contribution of new products in Bajra at 68 vs 52pc YoY
Hybrid rice revenue up 9 pc due price hikes
Maize volumes were down due delayed monsoon. Expecting pick up in Q2
Vegetables volumes were down due fall in output prices. Key products - Watermelon, Okara, Tomato, Bitter Gourd, Cauliflower, Cabbage, carrot
Launching new varieties in Mustard in Haryana, UP, Rajasthan
Kaveri has expanded its vegetables seed business team along with the offerings in the vegetables division. This team is separate from the staple crops team
This business is difficult to crack. However, company has been at it for over 7 yrs now. Continue to be very bullish here
Expect this ( otherwise stagnant ) business by 25-30 CAGR over next 3-4 yrs. This is a high margin business
No new update on the 73 cr Tax demand notice received by the company
Spending a lot on vegetable seeds R&D
Segment wise revenue break up for Q1 -
Cotton- 348 vs 319 cr
Hybrid Rice- 181 vs 165 cr
Selection Rice- 110 vs 90 cr
Maize- 87 vs 96 cr
Vegetables- 18 vs 18 cr
Aim to take Vegetables sales to 150-180 cr/ annum in 5-7 yrs
Likely to catch up lost volumes in Maize in Q2, Q3, Q4
LY exports were 20 cr. Expect to do 30-35 cr this FY
Chilli, Okara and Tomatoes are the biggest and most profitable vegetable mkts. EBITDA margins vary from 30-60 pc !!!
Aim to clock 100 cr revenues from Mustard in medium term. Its also highly profitable product
Have a partnership with Monsanto for some GM crops. Waiting for Govt approvals for launch
Last 5-6 years were years of consolidation. Company has reduced its dependence on cotton to a large extent by investing a lot on other crops
Growth should pick up from this yr onwards
Aim to do 200-250 cr export revenues in 4-5 yrs
Disc : initiated a tracking position after 8 yrs
