Kaveri Seed Company (KSCL) Q4 15/16 earnings summary

Executive summary

• FY 2015-16 was pressured by two successive weak monsoons, drought, low commodity prices and competitive inventory liquidation; performance declined, while cash generation and inventory controls strengthened.

• Consolidated revenue was ₹910.17 crore, EBITDA ₹206.00 crore and net profit ₹172.69 crore, versus ₹1,176.66 crore, ₹325.08 crore and ₹300.96 crore, respectively, in FY 2014-15.

Financial highlights

• Standalone revenue was ₹864.91 crore versus ₹1,131.18 crore; standalone PAT fell 41.31% to ₹177.12 crore from ₹301.84 crore.

• Consolidated revenue from operations declined 23.09% to ₹892.78 crore; consolidated PAT decreased 42.62% to ₹172.68 crore from ₹300.96 crore.

• Consolidated EPS was ₹25.01 versus ₹43.68; standalone EPS was ₹25.65 versus ₹43.81.

• Standalone operating cash flow rose to ₹225.16 crore from ₹162.68 crore, supported by working-capital movements.

Outlook and guidance

• FY 2016-17 was expected to deliver robust growth, supported by forecast normal or above-normal monsoon, higher commodity prices, adequate seed availability and market-share gains.

• Growth priorities included cotton recovery, maize expansion, higher hybrid and selection paddy volumes, and scaling the high-margin non-cotton portfolio; vegetables were a longer-term opportunity.

• Management planned to commission the Molangur plant to expand paddy processing and supply capacity.