Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Forensic Accounting

<ul>
<li>In our previous insight on <a href="https://www.smartkarma.com/entities/kaveri-seed-co-ltd" target="_blank" data-smartkarma-citation="entities:11278:1" rel="noopener">Kaveri Seed (KSCL IN)</a> , <a href="https://www.smartkarma.com/insights/kaveri-seed-wilting-sprouts" target="_blank" data-smartkarma-citation="insights:20276" rel="noopener">Kaveri Seed: Wilting Sprouts</a> we had predominantly highlighted the challenges faced by cotton seed players due to the external conditions.</li>
<li>In this insight, we particularly dwell into the forensics checks of the company and present our takeaways.</li>
<li>Key takeaways include concerns on investments, receivables, working capital cycle and some disclosures.</li>
</ul>


In our previous insight on Kaveri Seed (KSCL IN) , Kaveri Seed: Wilting Sprouts we had predominantly highlighted the challenges faced by cotton seed players due to the external conditions.
In this insight, we particularly dwell into the forensics checks of the company and present our takeaways.
Key takeaways include concerns on investments, receivables, working capital cycle and some disclosures.


External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<div><div><div><div><ul><li>Revenue fell 6% YoY in FY22 due to lower cotton/maize (down 24%/16%) volumes.</li><li>Cotton seed volumes were impacted by lower cotton acreage and the use of illegal herbicide-tolerant Bt (HTBt) seeds, which impacted sales of branded seeds.</li></ul><ul style="list-style-type: none;"><li> </li></ul></div></div></div></div><div><div><div><div><ul><li>Maize volumes fell due to no sales to the government.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Revenue fell 6% YoY in FY22 due to lower cotton/maize (down 24%/16%) volumes.Cotton seed volumes were impacted by lower cotton acreage and the use of illegal herbicide-tolerant Bt (HTBt) seeds, which impacted sales of branded seeds. Maize volumes fell due to no sales to the government.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kaveri Seeds - Revenue Fell 6% YoY in FY22 Due to Lower Cotton/Maize (Down 24%/16%) Volumes.

<p>KSCL's reported a weak operating performance in 2QFY22, despite a 10% surge in revenue on account of higher input cost and other expenses. EBITDA/PAT was below our estimate. Factoring in its 2QFY22 performance, we decrease our FY22E/FY23E earnings estimate by 8%/7% due to higher RM prices. We value the stock at 12x FY23E EPS to arrive at our TP of INR630. We maintain our Buy rating....</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

KSCL's reported a weak operating performance in 2QFY22, despite a 10% surge in revenue on account of higher input cost and other expenses. EBITDA/PAT was below our estimate. Factoring in its 2QFY22 performance, we decrease our FY22E/FY23E earnings estimate by 8%/7% due to higher RM prices. We value the stock at 12x FY23E EPS to arrive at our TP of INR630. We maintain our Buy rating....Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Lower maize seed volumes drags performance

External broker reports(aggregated public sources), Chola Securities

Chola Wealth Direct

<p>In 1QFY22, KSCL's standalone revenue declined by 8.8% YoY to 6.8bn; on the back of lower volumes in Cotton and Maize segments. Maize segment volumes declined by 18.3% YoY while revenue decreased by 7.8% YoY. Cotton segment volumes and revenue were lower on a YOY basis by ~28%, as area under cultivation has decreased in all major cotton...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

In 1QFY22, KSCL's standalone revenue declined by 8.8% YoY to 6.8bn; on the back of lower volumes in Cotton and Maize segments. Maize segment volumes declined by 18.3% YoY while revenue decreased by 7.8% YoY. Cotton segment volumes and revenue were lower on a YOY basis by ~28%, as area under cultivation has decreased in all major cotton...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<p>Kaveri Seeds (KSCL)'s 1QFY22 revenue fell 12% on account of de-growth in the Cotton and Maize, offset by growth in the Hybrid Rice and Vegetables segments. Cotton seed sales volumes were impacted by lower cotton acreage and the use of herbicide-tolerant Bt (HTBt) seeds, which further impacted branded seed sales. Also, the pandemic affected the supply chain, resulting in the lower absorption of cotton hybrids by dealers and distributors and the consequent unavailability for the farmer.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Kaveri Seeds (KSCL)'s 1QFY22 revenue fell 12% on account of de-growth in the Cotton and Maize, offset by growth in the Hybrid Rice and Vegetables segments. Cotton seed sales volumes were impacted by lower cotton acreage and the use of herbicide-tolerant Bt (HTBt) seeds, which further impacted branded seed sales. Also, the pandemic affected the supply chain, resulting in the lower absorption of cotton hybrids by dealers and distributors and the consequent unavailability for the farmer.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Lower cotton seed volumes drag down overall performance

India

Kaveri Seed Company Ltd. produces, processes, and markets hybrid seeds for crops that include corn, sunflower, cotton, paddy, and grain.

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Kaveri Seed (KSCL IN)

Kaveri Seeds- Forensic Analysis

In this insight, we dwell on the forensic checks of the company. Key forensic takeaways include concerns on investments, receivables, working...

Nitin Mangal

Kaveri Seeds - Revenue Fell 6% YoY in FY22 Due to Lower Cotton/Maize (Down 24%/16%) Volumes.

Lower than expected operating loss in 4QFY22 aided by lower OPEX. Revenue fell 6% YoY in FY22 due to lower cotton/maize (down 24%/16%) volumes.

Motilal Oswal

Lower maize seed volumes drags performance

KSCL's reported a weak operating performance in 2QFY22, despite a 10% surge in revenue on account of higher input cost and other expenses. EBITDA...

Motilal Oswal

EARNINGS UPDATE- KAVERI SEEDS LTD 1QFY22

In 1QFY22, KSCL's standalone revenue declined by 8.8% YoY to 6.8bn; on the back of lower volumes in Cotton and Maize segments. Maize segment...

Chola Wealth Direct

Lower cotton seed volumes drag down overall performance

Kaveri Seeds (KSCL)'s 1QFY22 revenue fell 12% on account of de-growth in the Cotton and Maize, offset by growth in the Hybrid Rice and Vegetables...

Motilal Oswal

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