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Kaveri Seeds: Seeking transparency in pricing - Views on News from Equitymaster
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Kaveri Seeds: Seeking transparency in pricing
Feb 12, 2016

Kaveri Seeds announced the results for third quarter of financial year 2015-2016 (3QFY16). The topline grew by 1.1% for the third quarter and fell by 24.2% for the first nine months of the fiscal. Profits fell by 76% YoY and 40% YoY respectively in 3QFY16 and 9mFY16. Here is our analysis of the results.

Performance summary

  • Sales dropped by 24% in 9mFY16.
  • Operating margins dropped from 59.8% to 50.8% over the past year primarily due to cap on selling price of seeds and higher input costs.
  • The company provided for higher doubtful debts this quarter and changed its policy to recognize doubtful debts in 2 years against 3 years earlier.

Consolidated financial snapshot

(Rs m) 3QFY15 3QFY16 Change 9mFY15 9mFY16 Change
Total income 907 917 1.1% 11,212 8,494 -24.2%
Expenditure 400 620 55.0% 4,506 4,179 -7.3%
Operating profit (EBDITA) 507 297 -41.4% 6,706 4,315 -35.7%
Operating profit margin (%) 55.9% 32.4% 59.8% 50.8%
Other income 25 42 68.0% 109 116 6.4%
Interest 1 1 20.0% 1 2 38.5%
Depreciation 168 251 49.4% 3,760 2,579 -31.4%
Profit before tax 364 87 -76.0% 3,054 1,850 -39.4%
Tax 5 (1) 56 49 -12.5%
Profit after tax/(loss) 359 88 -75.5% 2,998 1,801 -39.9%
Net profit margin (%) 39.5% 9.6% 26.7% 21.2%
No. of shares (m)# 69.1
Diluted earnings per share (Rs) 26.2
P/E ratio (x) * 13.4

*on a trailing twelve-month basis

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