Kaveri Seed Company (KSCL) Q4 14/15 earnings summary

Executive summary

• FY15 delivered record revenue and profit, with consolidated revenue up 14.85% YoY and consolidated PAT up 44.02%; results improved despite delayed monsoon, lower farm income and depressed crop prices.

• Growth strategy centers on R&D, new hybrid launches, a diversified crop portfolio and wider geographic reach; nine new hybrids launched during the year.

Financial highlights

• Consolidated revenue from operations was ₹11,612.3 million, versus ₹10,111.1 million in FY14; consolidated PAT was ₹3,009.6 million, versus ₹2,089.6 million.

• Consolidated EBITDA was ₹3,254 million, versus ₹2,309 million; EBITDA margin expanded 518 bps to 28% from 23% in FY14.

• Consolidated EPS was ₹43.68, versus ₹30.40 in FY14; standalone PAT was ₹3,018.4 million, versus ₹2,105.6 million.

Outlook and guidance

• Cotton volumes expected to moderate as credit is reduced to manage receivables and protect margins; market-share gains targeted in non-credit markets including Madhya Pradesh, Gujarat and Maharashtra.

• Maize, paddy, bajra and vegetable seeds expected to drive strong growth, supported by higher hybrid-seed penetration and increased product acceptance.

• Longer-term cotton prospects tied to herbicide tolerance, high-density planting and mechanical harvesting; commercial sales of the Three-by-One HDP hybrid planned for the coming year.