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kaveri seed company limited

koveri seeds

31st January 2017

Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd.


I S t Floor New Trading Ring Exchange Plaza, 5th Floor,
Rotimda Building Plot No.C/l, G Block,
P.J.Towers, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E)
MUMBAI - 400 001 MUMBAI - 400 0051

Scrip Code: 532899 Scrip Code: KSCL

Dear Sir,

Sub: Presentation: Kaveri Seed (23 b FY 2017 Results Announced on 3 l S fJansray,


2017 - Reg.

Please find attached herewith Presentation of Kaveri Seed Company Limited Q3 & FY
2017 Result announced on 31st January, 2017. The same was displayed at our
Company's website at www.kaveriseeds.in

This is for your kind information and record.

Thanking you,

Yours faithfully,
AVER1 SEED COMPANY LIMITED

CHAND
LE TIME DIRECTOR
\

Encls: a/a.

Regd. Office : # 513-8, 5th Floor, Minerva Complex, S.D. Road, Secunderabad - 500 003. Telangana, India
Tel : +91-40-2784 2398, 2784 2405 Fax : +91-40-2781 1237 e-mail : info@kaveriseedsh
CIN : LO1120AP1986PLC006728
Results Presentation Q3 & 9M FY17
Safe Harbour

Certain statements in this document may be forward-looking statements. Such forward-looking statements are
subject to certain risks and uncertainties like government actions, local political or economic developments,
technological risks, and many other factors that could cause our actual results to differ materially from those
contemplated by the relevant forward looking statements. Kaveri Seed Company Limited will not be in any way
responsible for any action taken based on such statements and undertakes no obligation to publicly update
these forward-looking statements to reflect subsequent events or circumstances.

2
Contents

1 Quarterly Performance & Outlook

2 Business Overview

3 Appendix

3
Quarterly Performance & Outlook
Industry Backdrop

5
Industry Backdrop - Rainfall

Source: IMD

6
Industry Backdrop - Rainfall

Source: IMD

7
Industry Backdrop - Rainfall

Source: IMD

8
Industry Backdrop Commodity Prices

Cotton

YoY QoQ
Rs. Per Quintal Jan. 2017 Jan. 2016 Dec. 2016
Change % Change %

Andhra Pradesh 5,175.78 4,236.06 22.2 4,848.69 6.8

Gujarat 5,352.40 4,614.11 16.0 4,986.72 7.3

Karnataka 5,466.60 4,886.04 11.9 5,349.68 2.2

Madhya Pradesh 5,391.02 4,730.14 14.0 5,052.35 6.7

Maharashtra 5,338.11 4,518.54 18.1 4,988.26 7.0

Telangana 5,082.96 4,265.08 19.2 4,878.77 4.2

Source: AGMARKNET

9
Ind-AS Reconciliation

Reconciliation between the profits as reported earlier and the Ind AS recast profits for the quarter and nine months
ended December 31, 2016

Q3 FY16 9M FY16
Particulars
Rs (in Lakhs) Rs (in Lakhs
Net Profit reported as per IGAAP 1,245.55 18,688.38
(i) Recognition of Biological assets 50.08 (55.91)
(ii) Restatement of Grant and Subsidies (0.51) (1.65)
(iii) Fair value adjustment of Financial Assets (0.41) (3.91)
(iv) Tax on above adjustments 66.14 84.02
(v) Profit on sale of Investments (186.72) (441.68)
Net profit recast to Ind AS 1,174.12 18,269.24

Amount of "Sales Schemes" grouped under "Other Expenses representing amounts in the nature of discounts and
rebates, have been reduced from Net Sales as a result of Ind-AS adjustment for the quarters ended 31.12.2016,
30.09.2016, 31.12.2015 and for the nine months ended 31.12.2016 and 31.12.2015. The said adjustment has not been
carried out for year end figures of March 31,2016 which has been disclosed in accordance with accounting standards
notified under the Companies(Accounting Standards). Schemes & incentives which typically would form 18-20% of
Revenues would as per Ind-AS not form part of Revenues

The Company has valued financial assets (other than investments in subsidiaries which are accounted at cost), at fair
value. Impact of fair value changes as on the date of transition, is recognized in opening reserves and changes
thereafter are recognized in Profit and Loss account or Other Comprehensive Income, as the case may be

Minor impact on depreciation due to change in computation of asset life

In line with Ind-AS recommendation Company has reported Standalone results


10
Q3 & 9M FY17 Performance Review
Revenues impacted by :
Growth Growth
Rs. lakhs 9M FY17 9M FY16 Q3 FY17 Q3 FY16
Cotton revenues declined primarily (%) (%)
due to reduction in hybrid cotton seed
price along with moderation in cotton Net Sales 62,959.03 67,543.46 (6.8) 6,785.18 6,976.62 (2.7)
seed volumes. The selling price of
Total Income 62,959.03 67,543.46 (6.8) 6,785.18 6,976.62 (2.7)
hybrid cotton seed has been reduced
as per the CSPCO (Cotton Seeds Price Cost of Production 35,325.87 36,497.22 (3.2) 3,751.69 2,941.34 27.6
Control Order) 2015 and Price
Notification issued by Ministry of Gross Profit 27,633.15 31,046.24 (11.0) 3,033.48 4,035.28 (24.8)
Agriculture
Gross Margin (%) 43.89 45.96 44.71 57.84
Maize performance impacted by lower
Employee cost 2,603.15 2,132.25 22.1 743.61 851.45 (12.7)
acreages in Bihar and coastal Andhra
Pradesh Other Expenses 8,526.27 9,185.44 (7.2) 1,949.66 1,558.27 25.1

Profitability impacted by : Other income 3,258.28 742.61 338.8 1,009.72 241.32 318.4

Write-off of Rs. 7 cr in Q3FY17 as EBITDA 19,762.02 20,471.15 3.5 1,349.94 1,866.87 (27.7)
against none in Q3FY16
EBITDA Margin (%) 31.39% 30.31% 19.90% 26.76%
Other Expenses higher due to Rs. 5.22
cr of CSR expense in Q3 FY17 as Depreciation 2,193.69 1,802.99 21.7 689.30 755.09 (8.7)
against Rs. 0.55 cr in Q3 FY16
Finance Cost 7.95 12.94 (38.6) 4.23 3.79 11.6
Significantly higher Other income
resulted in higher capital gains tax PBT 17,560.37 18,655.23 (5.9) 656.40 1,108.00 (40.8)

translating to higher tax outflow PAT 16,566.59 18,269.24 (9.3) 355.25 1,174.12 (69.7)

In FY16, the Company based on PAT Margin 26.31 27.05 5.24 16.83
notifications of various state
governments, short provided the
royalty by Rs. 65.5 crore. The same had
been included in contingent liability 11
Cash investments as on 31 December 2016

Rs.in Lakhs

Fund House Liquid Liquid Plus FMPs Short Term RE Fund Medium Term Total

HDFC 500 2,500 2,500 3,800 9,300

Tata 700 700

Birla 650 2,615 6,900 10,165

Reliance 1,650 7,300 8,950

ICICI 1,302 2,777 800 7,703 12,582

SBI 1,000 1,000

Kotak 1,350 4,000 5,350

DSP Blackrock 1,000 1,000

UTI 500 500

IDFC 800 1,600 2,400

ASK 500 500

Total 4,802 5,927 3,500 6,415 500 31,303 52,447

Total cash on books of Rs . 537.94 crore as on 31 Dec., 2016


12
Q3 & 9M FY17 Operational Highlights
While overall cotton seed volumes in India declined by Jaadoo and ATM performance continues to be better than
15% YoY, Kaveri volumes moderated by just 4% competition
Gained cotton seed market share across states 3 new cotton hybrids under demonstrations with farmers
including AP and Telangana 1 hybrid to scale up in FY18
More than 30% YoY improvement in Maharashtra 3 new hybrids launched in maize for Kharif season
volumes; more than 20% YoY improvement in
Madhya Pradesh & Rajasthan volumes 1 hybrid to scale up in FY18
In 9M FY17, maize volumes grew by over 20% YoY 2 new hybrids to be launched in upcoming Kharif
Exports of maize has gone up by 30% YoY 3 new hybrids launched in pearl millet
Contribution of non-cotton crops to grow up Scale up of all 3 hybrids
R&D investments focused on core crops cotton, maize, 1 new hybrid launched in hybrid rice and research rice
rice, pearl millet and vegetables each
Both to be scaled up in upcoming Kharif
1 new hybrid and 2 new research variety to be
launched

Cotton seed revenue & volumes Rice seed revenue & volumes Maize seed revenue & volumes
788.0
784.0
780.0 9.0 *includes hybrid & research
776.0
772.0
768.0
764.0
760.0
756.0
752.0
748.0 8.5 84.0 7.1 8.0 200.0 10.9 10.4
744.0
740.0
736.0
732.0
728.0
724.0
720.0
716.0 80.0 7.0
712.0
708.0
704.0
700.0
696.0
692.0
688.0
684.0
680.0 8.0 76.0 7.0 180.0 8.7 10.0
676.0
672.0
668.0
664.0
660.0
656.0
652.0
648.0 72.0 7.0
644.0
640.0
636.0
632.0
628.0
624.0
620.0
616.0
612.0 7.0 68.0 160.0
608.0
604.0
600.0
596.0
592.0
588.0
584.0
580.0 64.0
576.0
572.0
568.0
564.0
560.0
556.0
552.0
548.0 5.5 5.4 60.0 6.0 8.0
544.0
540.0
536.0
532.0
528.0
524.0
520.0
516.0
512.0 6.0 140.0
508.0
504.0
500.0
496.0
492.0
488.0
484.0
480.0 56.0
476.0
472.0
468.0
464.0
460.0
456.0
452.0
448.0 52.0 5.0 120.0
444.0
440.0
436.0
432.0
428.0
424.0
420.0
416.0 5.0 48.0 6.0
412.0
408.0
404.0
400.0
396.0
392.0
388.0
384.0
380.0 44.0
376.0
372.0
368.0
364.0
360.0
356.0
352.0
348.0 4.0 40.0 4.0 100.0
344.0
340.0
336.0
332.0
328.0
324.0
320.0
316.0
312.0 36.0
308.0
304.0
300.0
296.0
292.0
288.0
284.0
280.0 32.0 3.0 80.0
276.0
272.0
268.0
264.0
260.0
256.0
252.0
248.0
244.0 3.0 28.0 4.0
240.0
236.0
232.0
228.0
224.0
220.0
216.0
212.0 24.0 60.0
208.0
204.0
200.0
196.0
192.0
188.0
184.0
180.0
176.0 2.0
172.0
168.0
164.0
160.0
156.0
152.0
148.0
144.0 2.0 20.0
140.0
136.0
132.0
128.0
124.0
120.0
116.0
112.0 16.0 40.0 2.0
108.0
104.0
100.0
96.0
92.0
88.0
84.0
80.0 1.0 12.0 1.0
76.0
72.0
68.0
64.0
60.0
56.0
52.0
48.0 749 495 412 8.0 70 78 76 20.0 167 149 188
44.0
40.0
36.0
32.0
28.0
24.0
20.0
16.0
12.0 4.0
8.0
4.0
- - - - - -
9MFY15

9MFY16

9MFY17

9MFY15

9MFY16

9MFY17

9MFY15

9MFY16

9MFY17
Gross Revenues (Rs cr) Sales Volume (mn packets) Gross Revenues (Rs cr) Sales Volume ('000 tons) Gross Revenues (Rs cr) Sales Volume ('000 tons)

Gross level revenues shown to enable comparison with previous years 13


Growth Strategy

Products

Market
Network
Ramp up of newly launched
Industry products
Trends Over the next 3-5 years,
Reinforce cotton leadership in introduce new products in
Andhra Pradesh, Telangana and cotton, maize, pearl millet and
Karnataka paddy

Deepen cotton penetration in Expand product offering in


The Surge for Food - Increasing vegetables
demand for food and agri products Maharashtra and Gujarat
Focused on strengthening Developing farmer-centric
Increasing hybridisation - higher product pipeline for future
acceptance of Commercial Seeds distribution network beyond
South and Central India, to Farmer acknowledged
Favourable government policies northern, eastern and western performance of products like
Seed Replacement Rate geographies Jadoo, ATM, etc. has provided
Sustain strong momentum in visibility for medium to long
Cotton Seed: The White Gold
new markets such as term growth
o High Density Planting (HDP)
Chhattisgarh, Jharkhand, West
o Mechanical Harvesting Bengal and Odisha
Maize & vegetables : High demand Explore attractive export
Rice: Higher under-penetration markets
Establish market network for
vegetables

14
Business Overview
The Kaveri Moat : Seeding Profitable Growth

Strong P&L record, Cash


Leadership in key crops: Top
rich, consistent dividend
5 Rank
paying

Benchmark R&D:
Diverse Product portfolio Comprehensive germplasm
addressing crop rotation & repository
shift

Market adjacent, Pan- India


Operations with
comprehensive distribution
network; unmatched
Brand Salience: Preferred Choice for processing & storage
farmers, growers, distributors capabilities

High Entry Barriers,


Farmer-centric Product
Indispensable industry
Pipeline: Superior
agronomic features

Unrivalled farmer loyalty: Best placed to scale-up


Nurturing farmer production
relationships since decades

16
Company Profile

To realise our vision, every


With consistent performance in member at kaveri will adopt
all functional areas of the consequential values of the
Company, our endeavour is to Our Our Company and inculcate
make Kaveri a benchmark seed sustainable business practices. In
company with the best of
Vision Mission our endeavour to reach the goal,
research, innovation and product team Kaveri would uphold all
development. brand promises to its
stakeholders.

We are serving Indian farmer We have over three decades of


consistently to improve their crop experience in application of the
yields ever since inception. We science of genetics and principles
have developed enduring Our Our of plant breeding in the evolution
relationships with farmers across of crop hybrids, quality seed
India; and our Kaveri Seeds Reputation Expertise production, conditioning and
brand enjoys wide reputation and processing and in building
loyalty, owing to our product extensive distribution network
range and quality commitment. with strong farmer relationship.

17
Relevant facts

Around
30 + Years 65,000 acres 775 + ~ 100 MT/hour 8 MT/day
Rich experience in Indian
seed industry Seed production across Team strength Total average throughput Ginning capacity
different agro-climatic
centres

100 + 1,00,000 + 213 14,000 MT


Developed high-quality Loyal production growers Number of filings to date Total cold storage capacity
hybrid and varieties across
field crops and vegetables

7 15,000 + 87 2,900 MT
State-of-the-art seed Point of sale across 15 key Registrations State-of-the-art seed
technology, processing states in India technology, processing
and storage plants and storage plants

3 rd 6,00,000 sqft 70 + 16 MT/day


Largest producer of hybrid Cumulative warehouse Outreach trial centres Environment-friendly
cotton seeds in India space at multiple strategic cotton delinting capacity
location across India

18
Progress Down The Years

Public offer and


Received DSIR
listing in stock
Kaveri Seed Launched first hybrid recognition for
incorporated Maize our R&D exchange

1976 1986 1991 1997 2000 2001 2004 2007

Seed production
unit started by Initiated R&D Seed conditioning plant Commissioned seed
Shri G. V. programme launched at conditioning plants at
Bhaskar Rao Kandlakoi, Telangana Gundla Pochampally and
Eluru

Achieved significant
Launched
benchmark turnover Listed by Forbes-best under Listed by Forbes-best under premier cotton
of over Rs. 1,100 a billion in Asia Pacific a billion in Asia Pacific Hybrid Jaadoo
crore

2015 2014 2013 2012 2011 2010 2009 2008

Conferred the Bio- Listed by Forbes-best under Launched Kexveg, Commissioned seed
Excellence Asia a billion in Asia Pacific new initiative for conditioning plants
Award by the premium vegetables. at Gundla
Department of IT, BT Listed by Forbes-best Pochampally and
and S&T, Government under a billion in Asia Eluru
of Karnataka Pacific 19
Diversified Seed Portfolio

FIELD CROPS

20
Diversified Seed Portfolio

VEGETABLES

Market oriented Capability to


Wider
& need focused Access to a produce over
acceptance of High brand
breeding wide range of 100 high quality
key products in High value recall across
programs products hybrid seeds
the market premium product
resulting in owning to the across
place leading to hybrids of field segments in
highly well- commercial
significant and vegetable farming
successful established crops, food
increase in crops community
product R&D set-up crops and
revenues
portfolio vegetables

21
Leadership Product Portfolio

Top 5 rank in key crop segments Kaveris cotton seed volume break-up by state
Kaveri is amongst the top
Kaveri Market three seeds companies in
Crop (m packets) FY14 FY15 FY16
Share (%) in FY16 the cotton and sunflower
Cotton 13 AP & Telangana 4.40 5.42 3.42 segments, and top five in
Maharashtra 1.06 1.33 1.12
the maize, paddy and
Maize 9 pearl millet segments
Karnataka 0.66 1.26 0.45
*Rice 6 Gujarat 0.14 0.16 0.25 Combined, these crops
Madhya Pradesh 0.19 0.16 0.16
account for more than
Pearl millet 10 90% of revenues of the
Others 0.25 0.29 0.18 Indian hybrid seed
Sunflower 28 All India 6.70 8.63 5.59 industry

Cotton seed *Rice seed Maize seed

12.0 18.0 20.0 3.0 6.0 12.7 12.8 14.0


5.0 14.0 12.0
18.0
10.0 15.0 5.0 12.0
13.8 16.0 4.2 12.0
3.9 10.0
8.0 14.0 2.0 4.0 10.0
12.0 8.0
6.0 10.0 3.0 8.0
8.0 6.0 6.0
4.0 6.0 1.0 2.0
4.0 4.0
2.0 4.0 1.0 2.0 2.0
6.8 8.5 5.7 2.0 1.3 1.5 2.0 11.2 10.1 9.2
- - - - - -
FY16
FY14

FY15

FY14

FY15

FY16

FY14

FY15

FY16
Sales Volume (m packets) Market Share (%) Sales Volume ('000 tons) Market Share (%) Sales Volume ('000 tons) Market Share (%)

*includes hybrid & research


22
Benchmark R&D

One of the Largest Pools Of Germplasm in India


Significant investments in the last five years for strengthening R&D

Developed proprietary germplasm and Hybrids

Over 600 acres of dedicated research farms with varying agro-climatic conditions

o State-of-the-art Biotech, Quality check and seed technology labs

o Cold / DH storage for germplasm

Multi-location breeding and trial stations

Strong and highly motivated R&D team about 100 personnel, including more than 20 scientists

o Conjunct use of Bio and hybrid technologies in product development

o Deployment of frontier technologies Doubled haploid breeding, MAS (Marker Aided Selection), MARS (Marker
Assisted Recurrent Selection), RGA (Rapid Generation Advance), Inbred pool-heterotic bins, MPS (Multi-parent
synthetics ) and MAGIC (Multi-parent Advanced Generation Inter-cross populations

Research and Development facility recognized by Department of Science & Technology, Government of India

Partnering with ICRISAT, Melinda Gates Foundations Harvest Plus program, IRRIs Hybrid Rice Development Consortium,
CIMMYT and USDA program on Heat Tolerant Maize for Asia (HTMA) and DBTs Biotechnology Industry Research
Assistance Program (BIRAP)

Collaboration with NARS (National Agricultural Research System) Institutes and All India coordinated crop improvement
programs of ICAR

Seed is most critical to output for a farmer: Performance ensures premium, repurchase

23
Distribution Presence

Punjab

Haryana

Rajasthan Uttar Pradesh

Bihar

Jharkhand
West
Gujarat Madhya Pradesh Bengal

Molangoor Gatla
Narsingpur Odisha
Maharashtra

Gowraram Pamulaparthy
Telangana
(2 plants) Eluru

Gundla
Pochampally
Bellary

Secunderabad Karnataka

Tamil Nadu

- Head Office - Plant - R&D Laboratory 24


Best-in-class, Market adjacent, Scalable Operations

Large production area across India with a loyal producer farmer network
o ~ 100,000 production growers across 12 different agro-climatic zones
Strong Brand Equity in o ~ 65,000 acres under seed production
farming community High credibility with the farmers
Focused programmes to spread awareness amongst farming community on new products in
market

7 Company owned plants across key locations in India with a combined processing capacity of ~
130 tonnes per hour
Amongst The Largest Modern equipment for pre-cleaning, grading, cob drying, storage, packing
Processing Capacities Maize cob drying facility with a capacity of 2,900 tonnes per cycle
Green houses for screening, uniform blast nursery for disease/pest screening
Cotton delinting facility

Warehouses across India with combined storage space of ~500,000 sqft


Strong Warehouse Dehumidified, climate-controlled storage facilities
Capabilities Storage godowns of ~135,000 sqft. (cold) and ~280,000 sqft. (ambient) with holding capacity of
~25,000 MT

Network of more than 15,000 direct/indirect distributors across the country


~350 highly motivated marketing professionals on a pan India basis
Pan India Presence Outreach centers are a key ingredient of expanding operations serving as feedback/marketing
centers gauging farmer needs and educating them to grow the product in best usage techniques
25
Complete control over all stages of Product Cycle

A 7-10 year cycle


Seed production undertaken post comprehensive market trialing
Practice benchmark production regimen throughout the cycle Grower/ Breeder to Farmer

Collecting Developing Quality Distributing


Evaluating Producing
Genetic New testing & and Selling
Needs Seeds
Resources Hybrids Packaging Seeds

26
High Entry Barriers: Brand Equity Paramount

Need for high investments in


R&D for seeds
Lead time from R&D to
commercial launch is 7-8 years Need for high degree of
Requirement of a wide credibility with farmers
distribution network across India Farmers will not jeopardize their
for a diverse portfolio of seeds
years worth of income and land
considering the varied agro-
climatic conditions across India arability on unestablished
company seeds
A complex process of developing
an effective hybrid (key skills
required to choose the right kind
of lines)

27
Investor Contacts

For further information, please contact:

G. Vijay Kumar Tel: +91 40 4919 2345


Gavin Desa +91 22 6645 1237
Fax: +91 40 2781 1237
CFO, Kaveri Seeds CDR India gavin@cdr-india
Email: cfo@kaveriseeds.in

# 513 B, 5th Floor, Minerva Complex, S.D.Road, Secundrabad


-500 003 Vikram Rajput +91 22 6645 1223
CDR India vikramr@cdr-india
www.kaveriseeds.in

28
Thank you

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