Kaveri Seeds reported a net profit of Rs. 240 Cr.

Kaveri Seeds reported a net profit of Rs. 240 Cr.

Kaveri Seeds reported a net profit of Rs. 240 Cr.

Kaveri Seeds reported consolidated revenue increased by 9% YoY to 690 Cr., led by higher cotton acreage and improved volumes. The EBITDA, at 250 Cr., improved by 18.3% YoY, while PAT grew 19.1% YoY to 240 Cr. The EBITDA margin improved to 37.1%. Cotton volumes increased by 8.3% YoY while revenue fell by 3.8%. The non-cotton volumes improved by 9.8% while revenue increased by 10% YoY. The company intends to improve volume and revenue for the rest of FY23 with double-digit growth in this segments.

Volume growth aids the topline:

The use of illegal cotton seeds has come down as organised players have gained market share in the cotton seed segment, which has also led to an increase in revenue. The new product launches continued in the quarter as the company introduced newer products across all segments. The new products in the North American market include KCH111, VIPLAV, Money Maker, and KCH 9333. The selected rice volumes grew by 15.2% in FY23. Hybrid rice volumes increased by 6.1% and revenue by 1.0%. The introduction of new hybrids such as the 425, 471, 729, and 473 fueled the segment’s rapid growth. The vegetable seed sales volume increased by 25.9% while revenue decreased by 2.5%. The company is expecting double-digit growth in maize, sunflower, vegetables, and rice in the second half of the year. Farmers’ sentiment has also been influenced by the delay in the onset of the monsoon across India until mid-June.

The company continues to see encouraging growth in vegetable seed acreage, revenue growth, and volumes. The overall exports of KSCL have contributed to 19 Cr. in revenues. The management expects exports to contribute a significant share in the next year. The high market shares and cotton prices drove increased cotton acreage during the current year. Increased competition in the cotton segment led to muted growth due to smaller companies with low realisations crowding the market, which will eventually result in lower overall realisations and higher discounts given during the quarter. The price of cotton per packet was up by 40 YoY.

The company remains confident that discount reversals will happen next year due to lower illegal BT cotton share and overall better market sentiment, despite not being able to realise prices. There is a decrease in acreage due to rain shortages. The higher prices will result in more acres in the cotton crop, which is a major risk for the company.

KSCL’s earnings seem to have normalised and are likely to improve for the rest of FY23. The contribution from the non-cotton segment is improving, and the division is expected to post double-digit growth. The leadership position, R&D focus, healthy product pipeline, presence across crop categories and strong distribution network will act as key levers for growth over the long term. The increasing contribution from the higher-growth projected non-cotton segment will aid the performance. There is a decrease in acreage due to rain shortages. The higher prices will reduce acres in the cotton crop.


In June 2022, the EPS was Rs. 41.27, compared to Rs. 33.44 in June 2021. The ROCE and ROE were at 17.1% and 16.3%, respectively. The stock was trading at a P/E ratio of 10.9x. The company is debt free, and the asset turnover ratio was 0.48x. The scrip is trading at Rs.461, down by 3.05% on Friday.

Equity Right

Infosys reports a net profit of Rs.5,350Cr. in Q1 FY23. 

Infosys reports a net profit of Rs.5,350Cr. in Q1 FY23. 

IT leader, Infosys reported a net profit of Rs. 5,360 crores. compared to Rs.5,195 in June 2021. The firm missed the street estimation of Rs.5,550 crores.
Total revenue for India’s second-largest firm was at Rs. 34,470 crores
a jump of 23.6% YOY. The operating margin was at 20.1%, down by
1.4% QOQ. It managed to beat the revenue estimates but disappointed PAT and margin. The EBIT margin declined to 20.1% by 150 bps onshore and offshore wake hikes were higher resulting in lower PAT because of constrained talent supply. Though the quarterly attribution was down and jumped from 27.7% in March 2022 to 28.4% in the June quarter, the
attribution elevated by 70 bps. Infosys was double-digit across
business segments in constant currency. Digital technologies grow by 37.5% CC. The total free cash flow during the June quarter was at 5,106 crores and improvement in ROE to 31%. Large-deal TCV for the quarter was at 170 crores down by 25% QOQ and 34% YOY. They have updated earning guidance from 13% YOY to 14%- 16% YOY giving a strong demand.
The net addition stood at 21,171 employees VS 13,599 in last 4 quarter.
The company is on track to hire 50,000 fresher in FY23. The company got 19 new deals. Management said that they have a healthy pipeline for the near future. The total number of active clients was at 1778 clients compared to 1741 clients in March 2022 and 1195 in June 2021. The top 10 clients contribute 13% of total revenue and the top 10 clients contribute around 20% of the revenue. Revenue per employee was down by 1.4% QOQ to US$56.9K due to investments in fresher and the total employees were recorded at 3,35,186.
We consider the margins to be under pressure due to an increase in travel, wage hikes in senior management, and supply side-cost in Q2 FY23. The management mentioned in the concall that the pricing is stable, thus we expect 21% to 25% in the near future. The scrip closed at Rs.1,503 down by
0.81 %. The stock touched a 52-week high of Rs. 1953.90 and a 52-week low of Rs.1,367.15. The Bangalore-based firm’s market cap is at Rs. 6.30 lakh crores.