KSCL Q3 FY26 earnings call.
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Revenue
₹210 Cr
verified against source
Revenue YoY
16.94%
reported change
EBITDA
₹358.39 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Kaveri Seed reported 9M FY26 revenue of ₹1,221.56 cr (up 16.94% YoY) and PAT of ₹398.91 cr (up ~35.5% YoY), with Q3 standalone revenue of ₹173.65 cr (up 16.08%). The stock-in-trade (inventory) was built up significantly (~₹200+ crores) to ~₹309 crores cash from ₹409 crores, affecting near-term liquidity. Gross margins contracted ~400 bps YoY in Q3 due to high cotton production costs and inability to fully pass on price increases—a transitory issue as input costs have now stabilized. Segment performance was robust: maize revenue surged 42.6%, hybrid rice 17.9%, exports 86%, and mustard volumes 64%. The new seed bill's "one nation, one license" framework is expected to benefit organized players like KSCL. Management targets margin normalization and awaits pending income tax appeals (₹56 cr + ₹70 cr demands) resolution within 6 months.
Colored figures show movement against the previous available record.
Guidance to track
- Expect major maize seed sales volume growth in Q4 FY26 driven by Rabi sowing in Bihar, Uttar Pradesh, and Punjab, extending the strong Q3 momentum.
- Extending hybrid rice growth into summer rice season across Gujarat, Rajasthan, and Western Uttar Pradesh during the next quarter.
- New cotton hybrids launched recently are performing well in the market; expect good revenue increase starting from FY27 (June 2026 onwards) as these gain market share.
- Management expects gross margins to normalize back to the 45-48% range going forward as production prices have stabilized and will not continue to impact profitability.
Risks flagged
- Gross margins fell ~400 bps YoY in Q3 due to high cotton production costs and inability to pass on full price increases to farmers. Management attributed this to industry-wide inventory buildup but expects normalization.
- Cash declined from ₹409 crores to ₹309 crores as inventory built up by ~₹200 crores due to higher production in anticipation of demand. Receivables also rose by ₹75 crores to ₹250 crores. Working capital may not fully normalize by Q4.
- Two consecutive income tax demands of ₹56 crores (FY24) and ₹70 crores remain pending at commissioner appeals stage for ~2.5 years with no provisions made. Outcomes expected within 6 months represent a contingent liability risk.
- Cotton sales continue to be impacted by illegal Bt cotton seed sales in the market. Management expects volumes to remain sideways rather than decline further, but this structural headwind was raised by analysts and not fully resolved.
Key quotes
- The cost of production was a bit high compared to previous years, and we were not able to pass on everything to the farmer. That 2-3% has impacted us this quarter but it will not continue going forward because the production prices have already stabilized now.
- Most of the companies have taken aggressive production and that has resulted in extra cost of production for all the companies. When you see the Q2-Q3 results, most of the companies have got huge inventory and it was heavily flooded in the market.
- We are open for inorganic growth as well, but in terms of buybacks, we'll have a meeting in the follow-up quarter then we'll decide about the buyback.
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