Kaveri Seed (NSE:KSCL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Kaveri Seeds Company Q2 and H1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode. There will be an opportunity for you to ask questions at the end of today's presentation. Please note that this conference call will be recorded. Joining us today on this call is Mr. Mittun Chand, Executive Director. Before we begin, I would like to mention that some of the statements made in today's call may be forward looking in nature and may involve risks and uncertainties. For a list of such consideration, please refer to the earnings presentation.

0:50 I would now like to hand over the call to Mr. Mithun Chand. Over to you, sir. Thank you. Good evening, and welcome, everyone, to our Q2 and first half twenty seventeen earnings conference call. We hope you had a great chance to review the presentation of the results, which is also available on our website. I will touch upon the operational financial performance of the company and then open the floor for a Q and A session. Revenue from operations was at INR125.44 crore as compared to INR96.61 crore in Q2 twenty twenty six, a growth of 29.84%. EBITDA was at INR 5.42 crore as compared to a loss of INR 6.47 crore. Net loss narrowed to INR 3.21 crore as compared to a net loss of INR 15.05 crore.

1:38 On a segmental basis, non quarter revenue were at INR 116.82 crore as compared to INR 90.53 crore, a growth of 29%, while quarter revenue were at INR 8.61 crore as compared to INR 6.0 crore, a growth of 41.7 crore. From operations was at INR 940.44 crore as compared to INR $10.41 crore. EBITDA was at INR 286.68 crore as compared to INR 315.88 crore in first half 'twenty six. The EBITDA margin of 30.48% as compared to 13.32%. Net profit was at INR 268.09 crore as compared to INR 301.45 crore.

2:25 Cash on book stood at INR 178 crore. On a segmental basis, non core revenue was at INR $7.18 crore as compared to INR $8.17 crore, a decline of 12.12%, while quarter revenue were at $2.24 crore as compared to INR $2.24.9 crore, a decline of 1.3%. The major highlights. First half twenty twenty one was shipped by El Nino and the delayed onset of the monsoon. The rainfall deficit impacted swing across the major growth segments and reflected in lower interest towards premium high value products with which weighed heavily on the first quarter. The second quarter was saw a recovery with revenue growing at 29.84% and EBITDA rising to 5.42 crore compared to INR 6.47 crore loss.

3:23 Despite the lower revenue, the company broadly maintained maintain an EBITDA margin at 30.48% of net revenue as compared to 30.32% of first half twenty twenty six. May was the largest drag of the half on the half with the volume down by 36% and revenues down by 36.3%, owing to a nearly 30% drop in selling acreages in Karnataka. New products continue to gain share with new cotton products contributing 37.7% as compared to 21.4%. And new single cross hybrids contributed a substantial 21.8% plus percent of the maze portfolio. The export business grew 2.63 times to INR33.07 crore from INR12.56 crore in first half.

4:15 The Board has declared an interim dividend of INR5 per share, that is 250% of the face value of INR2 per share. Operational items, the contribution of new cotton new products of cotton was up from 21.4% to 37.7%. Cotton volumes are maintained vis a vis last year in spite of challenges like illegal cotton and reduction in the first half of twenty twenty seven. Revenues at INR222 crores as compared to INR222 crores. In quarter two, quarter end revenues grew by 41.7%. In quarter end, the company has established a strong foundation with new products in the northern markets of Haryana, Punjab and Rajasthan as well as in central and southern markets.

5:04 MACE revenues were at INR 188.47 crores as compared to INR 295.84 crores, a decline of 36.3, while new single class hybrids contributed a substantial 21 plus percent growth in Mace portfolio. Hybrid RISE revenues were at INR 264.4 crores as compared to INR 282.56 crores, a decline of 6.4. In quarter two, hybrid party raised a significant growth to INR 17.33 crores from INR 2.37 crores, primarily due to the export business. Selection wise, revenues increased by 2% to INR169.45 crore as compared to last year.

5:51 In quarter to twenty seven, research party grew by approximately 22%. Vegetables revenue were at INR25.99 crore as compared to INR31.7 crore, a decline of 18%. Revenues from other crops are INR70 crore as compared to INR40.8 crore, a growth of INR71.6 crore. To build on the export momentum, the Board has approved the incorporation of only owned subsidies, subsidiaries in Tanzania, Kenya, Vietnam, Thailand, Philippines, Indonesia, Gambia and Peru, which will focus on product realization, research for seed and vegetable crops and marketing and distribution. The company holds the globally recognized ISA accreditation for the AQC lab besides its ISO NAVL accreditation.

6:44 The overall growth story remains intact. The first half has been challenging on account of the weather, but the recovery in the second quarter, the rising share of new products and growth in export gave us confidence in the direction of the business. We'll continue to work on new variants across maize, vegetables, rice and cotton and to build our presence in international market through the new subsidies. I will now open the floor for Q and A session. Thank you. Thank you, sir. We'll now begin the question and answer session. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assemble.

7:40 The first question is from the line of Prashup Shah from Bugler Rock, PMS. So my question is we are expanding into eight countries. We have and we had also sent some samples to Philippines in the last quarter. So but the results, we were awaited yet. So... And as you see that foreign country farmers are tougher to convince to use our products. So just wanted to know what is the thought process going behind, like, expanding into so many countries because earlier also we had tried Bangladesh, but we weren't as successful as we thought we would be? Basically, if you see our export business compared to five years back to now, we have increased our our business hardly from INR 10 crores to 12 crores to almost like INR 65 crores, 70 crores now.

8:36 Going forward, right now, if you see our model, we are exporting our seed and willing it to some distributor there and they are selling our seed there. But going forward, we want to establish our own brand. To establish our own brand, we went to test there, which takes three to four years to test it. So for that, we require registration for the company, incorporation of the company and registrations trialing and registration of the hybrids under the company. So now we want to open up going forward. It will take some time, maybe four, five years. So it will take some time for us to test trial and then introduce hybrids and create our own brand there. So that's the reason we are trying to incorporate the company. For example, in terms of Bangladesh, we are not are not failed there. We are successful. We are doing business in Bangladesh.

9:25 The only thing is that still we are trying to develop the brand. Once we develop the brand, we'll sell it on in our name. Whereas in countries like Africa, we need to register our hybrids, which takes three to four years for us. So already, if you see our if you see our exports, we have done a good business in Tanzania. We have done business in Indonesia, Philippines, and Vietnam. So we are trying to develop our own brand there, which takes time. At the same time, we'll try to export our business to distributors, and then we'll try to build our own hybrid. So, basically, I think the difference this time would be better in Bangladesh versus African country, then the registrations take more time as compared to Bangladesh what we have seen. Yes.

10:17 Yes. But end end of the day, if you want to sell our own hybrid and our own brand, we need to register there. For that, you require a local incorporation. Right now, are just exporting a scene. They are they are selling on their own brand. Okay. My next question is that we we are a Seed Company. In a in a previous call, you have mentioned that this period is very challenging for us to do this and, you know, less rainfall and such sort of things. Just wanted to know that we have faced such times, such tough times in the history of the company. So I wanted to what is different this time and how are we tackling this situation differently? So if you see our sale right now, first half is already done where we have seen the majority of the impact. I don't see much impact will be there. Definitely, will be some impact in the second half as well.

11:07 But we have already seen the impact. We are down by 10% in overall sale. If you see in the region wise, if you take May as a crop where we are down by more than 35 to 40% and majority of that decline is from Karnataka where we have seen more than 30% deficit rainfall and especially in Southern Karnataka, Northern Karnataka. So that has impacted our May sales a lot. Even then, we were able to cope up in some areas. And overall, the situation where we were strong in terms of sales like Telangana, Kumbai, Andhra, parts of Maharashtra, the rainfall and the shortages are pretty down. So that has impacted us. Even in the tough conditions, we're able to maintain that except for in May, we were able to maintain our market share and revenues close to what we have done last year.

12:01 So this is one of the tough year where we have seen and I think we are all seeing the reports how difficult, how challenging is this season this year. And yes, we are in this business, but it's one off year, nothing to worry about the future. And if you see the competence and by seeing the situation, I think we have really done well and compared to many players in the industry. And just one more thing on this market share. My question is on the illegal cotton front. You have always mentioned that the government is doing taking steps to stop this illegal cotton sale. But still, sir, companies like Kaveri, Kaveri Seed, who are leader in cotton seeds, have faced challenges in gaining or rather maintaining the market share in the cotton seed business.

12:51 So every time there is an increase of illegal sale of cotton and smaller players are coming up in this cottonseed business. So since how, like, how are you tackling this situation of market share? Because every time we see some steps have been taken, but nothing caused these smaller players to come and take our market share in the illegal quarter. There are two things in this. One is that the illegal quarter is going year on year. It went up significantly high in the previous time. Right now, it's just going marginally. But if you see the government is also taking steps to control it. And as when we see in terms of the actual real practical problem, if you see in the last ten to twelve, in fact, in the last fifteen, sixteen years, have not seen any new technology which got introduced in GM technology.

13:49 And the legal BT, which is like once I said BG to RRF is already there in the market. That's taking note. That's the reason it's taking time. But when you see the market share of the new hybrid that is going up, the market share of the older hybrid is coming down. For us, we are able to maintain and we'll grow further because we have new hybrids which we have introduced in Northern segment and Central and Southern segments, which are really doing well. That's the reason we think that we'll definitely even though the illegal BT is there at this percentage, we'll definitely grow next year in terms of the hybrids. Okay. Last question is, just wanted to know companies like Bayer have grown in certain cities like Mays, but we couldn't do so. So you had mentioned that there... The problem is that we don't have the product for that particular state like my... As in.

14:43 So are we planning I'm to not sure that how big... How much the bear has grown because I don't have the exact figures. I'm going to what. But, yes, if you see the overall acreage in India, except for Madhya Pradesh, no other state has grown. If you see the overall May deals, the latest yields, if you see the comparison compared to previous year, the yield will be lower by at least 25%, 20% to 25% compared to last year in terms of the May's output. That way, we shall figure what we get in terms of the productivity. But in terms, yes, in terms of the Madhya Pradesh, it has really picked up in the last four, five years. We are not that very strong in Madhya Pradesh. But if you see southern parts of India, especially Karnataka, the combined Andhra, so we are pretty much strong there.

15:32 So my question was on that front, says that there are certain states that we don't have products for that particular state like Maharashtra or MT, but we are stronger in the southern states. We have products for Maharashtra, we have products for MT, but it's taking some time. We are late in entering the MT market. Okay. Okay. Thank you. But going forward, definitely, we'll be increasing our market share in NPR also. Okay. Thank you so much. Thank you. The next question is from the line of Viraj Kacharya from SIMPL. Please go ahead. Yes. Hi. Thanks for the opportunity.

16:17 Just a couple of questions. First is on the cotton piece, just an extension to what the earlier participant was asking. I understand there's been a sizable penetration of illegal cotton in the marketplace and there's a material contraction in the acreage what it should be for cotton three or four years back. But if I look at our own last, say, ten years sales growth, we've grown around 6% to 7% annualized growth. So while the non cotton has been growing at a very healthy double digit, the cotton pieces where it's just shrunk. So if there is no material change in new technology and everyone is just fighting into the value proposition on the second level technology, either in terms of better yield or tolerance level of pest infestation, How should we understand our cotton portfolio growing from here?

17:16 Can it double over the next three, four years? Or do you think it will be able to only sustain the current level based on the new launches we made? How are you looking at it? So basically, if you see our portfolio, when you compare our portfolio for six, seven years back to now, even though it looks like 56% mere growth or flattish sale in the last five, six years, but if you see our product mix, as rightly pointed out, we have grown more in non cotton segment than the cotton segment. In fact, we are de grown in cotton, where we had at the peak we are close to 85% of our revenue was from cotton. Right now, it's less than 20% from cotton. So we have the product mix has changed. The product portfolio, I mean, portfolio has changed in terms of the contribution of the revenue.

18:04 Yes, if you see our current sale when compared to previous year, whatever sale we are doing, majority of the sale is from the new habits, not from the older habits. Going forward, as we as it takes a lot of time, we are very much aware that it takes a lot of time for us to introduce new habits. So we have done in the last two, three, four years, maybe one and a year delay we had because of the monsoon effect and everything. So we're not able to advance as what we thought. But if you see the present performance for this year, the hybrids are really doing well when compared to other competitors. And going forward, definitely we can double our sale in the next three to four years in terms of the cotton portfolio. And basically we are pretty confident because of our product performance in the market.

18:51 So definitely from here on, don't see quarter going down. Even in this stage, you see overall quarter neckerages are down, illegal quarter picking up and there are new technologies, new segment, which is coming up. Even in this tough scenario, we were able to maintain our volumes. So that itself shows the strength of our product portfolio. And going forward, definitely, we'll see a positive trend in quarter as well. What will be the age profile of the portfolio in quarter? What did it come to the new product and old? If you see in that, the growth which we are seeing, like 50% is all about new portfolio now. And going forward, majority 85% to 90%, if you see in the next three to four years, 85% to 90%, more than 90% will be a new portfolio.

19:43 So incrementally for cotton, will the growth be largely de product driven? Or you think there are pockets in market in terms of geography or applications we are not there and that is what will help us grow because that two twenty five to 50 growth order quarter in portfolio, you will have the old parts, which after a certain age will be going out of shelf. While the new products are scaling up, there is a negative effect as well. So just kind of looking at doubling, say, from INR $2.50 odd crores to INR 100 crores in three, four years. How are you looking at the construct of that? So that's what I was saying. Even in the earlier statement I've given that whatever will be the sale after four to five three to four years down the line, majority of close to 80% to 90% of the sale will be from new hybrids only. Whatever the incremental growth will be only from the new hybrids, not from the older one. And even that older one get will be ferried out and the entire market share from the older one will be also be taken by the new one.

20:49 By taking that scenario and situation, anticipating that, I say that it will be 80% to 90% of the new hybrid workforce. Okay. Just two more questions. On the noncotton, see, especially, we were also looking at scaling up with segments like vegetables and foods. But I think last few years, we had minimal success, right? And we have tried this earlier as well, but the segment competitive intensity is very high and you have MNCs who are quite dominant in the space. So when we are looking kind of breakeven, any color you can give where are we in terms of launches? How are we going about? Any color you can give on that?

21:35 We are growing in vegetables also. If you see our portfolio before ten years, it was almost zero. Now we are all last year, we had done INR 65 to INR 70 crores in vegetables itself. Yes, the growth what we thought thought will be around 100 crores in the next one to two years, which is very much possible as of now. But in the last two, three years, we have seen season changing pretty fast. That has impacted much. But in terms of the competition, MNCs are not new for us. If you see our competition in most of the portfolio product portfolio, we are competing with both domestic and MNCs. We are the only player in India who compete with both domestic and MNC. And if you see, except for cotton, in all our segment is all we are competing with MNC. The competition is not new and we compete with them and we have we place our hybrids on par or much better than that. Then only the farmer will accept it.

22:36 We are not worried about the competition. Competition is always there. And definitely based on our product performance, we say that we'll grow in those segments. Okay. And in terms of the export piece, the last question. See, as you said, if you want to grow our own brand, then we need to have entities and apply for registration. So typically, what is the time line for one to get registration? And for us to scale up in each of those markets, would we need to have investments in P and L in terms of fleet on street or how are we looking into the go to market? There are two things to notice in this. One is like these are the entities which we are incorporating right now only to register a hybridity there, which requires a minimum cost in terms of the investment.

23:30 That doesn't mean that we are stopping our exports. We'll be doing we'll be continuing with the present model where we'll be exporting. But directly, we are not be selling under our brand. We'll be exporting through distributor. They will sell on our brand or their own brand based on the country requirements. But going forward, as we are establishing and growing in growing in export, we want to establish our own brand in those countries. That's the reason we are trying to incorporate those companies. And it will take a long time, actually nothing less than four to five years to start a business there. But somewhere we need to start, we are starting it right now. In terms of the investments, it's a very minimum investment. What growth segments you think has maximum potential for exports?

24:18 Basically, we are competing on maize and rice and in some areas GM crop, GM cotton is also there. So again, that depends on the local provider there. But these are the three main crops that we are targeting and plus vegetables. Okay. Thank you. Thank you. The next question is from the line of Dhruv Sarraf from Bo Health India's Fund. Please go ahead. Sir, just wanted to know about the inventory, sir. We've seen inventory at INR 1,200 crores, and it's kind of not decreased from March levels, whereas historically, you've seen inventory kind of seasonally weak in H1, it's kind of comes down.

25:04 So what explains this buildup of inventory and does it pose a risk of any big write off because it's now at very high level compared to your past, even if I look at the last two years or the last four, five years? If you compare to last year, in terms of the absolute terms, in terms of the inventory, we are up by 150 crores when compared to comparable on September to September basis, roughly INR 150 crores. That's what is reflecting in the cash on books as well. If you see the cash results also, yes, down because of the we have more inventory when compared to last year. The amount is close to INR 150 crores. And in the last call also, explained that one thing, the production was higher than anticipated in some crops because the yields And were the other thing is that, in the actual sales or the projected sales, anticipated sales are lower. That's the reason the inventory is piled up. But in terms of the risk factor, whether we are going to write off, the major inventory is with rice, cotton and the other big crop is maize.

26:14 And rice and cotton, it's not a difficult thing. Again, we are taking some sort of production in rice in some varieties and in cotton as well, where we have some scarcity. So these two crops is not we are not worried about. Whereas in maize, we have completely stopped taking a production this year because we have inventory. And in terms of the storing of the inventory, we have enough infrastructure while receiving itself, it's properly stored there, and we don't see any write offs as of now. And it's properly maintained and the results what we are seeing is an impact of post write offs. So what we anticipate in terms of the write offs, it will be in line. We don't see any major write offs coming forward. And because this inventory will be all be used in the Karif five year, taking any production plan for Karif or for Adi for May this year. So this inventory will be using for the next year.

27:10 Okay. So and this inventory will not be used for Ravi this year, let's say, because you know the maize prices are strong. We'll also use for Ravi as well. But if you see the maize prices, it's already got high at like 32 last day, last night. It was around close to INR 32 almost like a life high. But if you see the actual conditions here, Bihar is doing well, but most of the companies have got a lot of inventory there, There are a lot of competition in Bihar. We'll also go in Bihar and Eastern parts to some extent. But the majority of the part like Kambayanadra, Maharashtra and Karnataka, still we have not seen rains. So definitely there is some impact in terms of the second half sales in May. So we don't anticipate much of a positive response in the second half in terms of the May. But yes, Karif looks good for us.

28:08 Curry looks good. Next Curry looks good. By seeing the maze fire and the inventory levels and with the production anticipation estimates, we see that maze coming up very well in the second first half of next year. And we have we should not we are not So worried about you do you foresee any sort of like shortage in terms of making the game next year? Is that what you're trying to imply? No. Most of the companies have made it and especially like our company, Kaveri has enough made it for next year. We are saying is by seeing the maize price right now, the maize decorators will definitely go up next year. Even if sentiment is good now, but the water is very low now.

28:54 So that's the reason we are saying that it might or might not come up now. Right. So you see a 9%, 10% sales decline in QH1 of this year. What are your estimates for the whole year now? Do you expect to continue at this 910%? Or do you expect to grow in the second half given what you've just spoken about in May? And May is the largest drop in second half. If you see in the second half as a stand alone basis, because I'm not taking the consolidated one because there's other side too, other two have still there. But as a stand alone basis, we have done around INR $2.70 crores, $2.80 crores in the second half compared to last year. As of now, we see 10% plus and minus because as we are anticipating a strong export in the second half again, which is doing well. And we slightly see a decline in other crops.

29:55 So it should be compensated or 10% plus or minus should be the initial call. But right now, the if you are very much aware that one cyclone, which is affecting Andhra. So that's slightly a positive impact where you can see a maze. To what extent it will have fill the tanks that will make some impact on the maize and other crops. If even they are saying that, that will be extended for some parts of Telangan and parts of slight extent of Karnataka, So that will be a positive figure for us. But we need to wait for another week or so till we... Till this festival, Diwali. Alright, sir. Alright. I'll come back in a few. Thank you, sir. Thank you. The next question is from the line of Sonal Kohli from Bo Health Indiasporan.

30:52 Please go ahead. Hello, Nitinji. How are you? Fine, fine, sir. So Nitinji, a couple of questions. Did I hear you correctly? You're saying that in the second half of this year, you expect plus or minus 10% Y on Y growth. Is that what... Did I hear you correctly? Yeah. Yeah. Because I'm just checking it out. Last year, a stand alone basis, we have done $2.60 crores in the second half. So on a consolidated basis, you had done $3.17 crores. What is the difference in confusion about Sanborn versus Consol? You could help us understand. We have other core subsidiaries where we do sale as well in that. So that are INR $40.50 crores. That also as a consolidated basis also, it should be less or minus 10%, not more than that.

31:45 I see. Any recent changes because of which we expect you know, in your assessment, like, in last few weeks? Sorry? Any recent changes in your expectations, you know, based on weather pattern in last few weeks, months, you know? Nothing. Nothing. Nothing much, but what we have seen is that in terms of the cyclones and everything, usually, you... Usually, in the second half from October to November 10 or November 15, you get many cyclones in parts of which we have rainfall in Andhra and Telangana, one we are already seeing now. But if we are able to cover some part, then sale will be good. But other parts Maharashtra, we are not seeing any sale in Maharashtra.

32:39 So your EBITDA margins are down about 200 basis points for the first six months, would you expect the trend to remain for the full year also? EBITDA margins are in fact up as a stand alone basis and as a consult basis down by only 1%. If you see at a past level... Six monthly basis, on a six monthly basis, the EBITDA margins, if you... Is down 200 basis points, 190 basis points. No. And then if we see our EBITDA margins on a half on half basis, on a stand alone basis, it is 30.48% compared to 30.32. And as a consolidated basis, it's like 29.85% compared to 30.8%. It's only done. But if you are seeing at the past levels, we had a more other income last year.

33:30 Somehow maybe there's a mix in my number. I'll have a look. Whatever I have, it's In not fact, in fact, on a general basis, the EBITDA margin was slightly up then. Sir, we look at consolidated, finally looking, buying the consolidated... Console, we are down by 1%. Console, we are down by roughly around 1%. I'm talking about EBITDA is nothing but minus other income. One per... We are done because in subsidiaries, we are not... Majority of the subsidiaries, we do cotton, which we are not... We were not able to do that. And we are incurring more expenses there. That's the reason I've control over this 1% down. And sir, what is the average life of the seed inventory? So the inventory which has increased, at what point of time and how old once inventory becomes, it is prone to being written off?

34:19 It's a continuous process. Every quarter based on this seed variety, every quarter we test it. So and in terms of the life of the inventory and the health life of the inventory, most of the inventories are new inventory. Usually, seeds like quarter and scale between three to five years, for rice, it's like three years. For me, it's like one point five to three years. So in terms of the health, it's very good as we have maintained very well from post harvest till late. So we don't see any write offs in terms of that. And most of the inventory have got good generation vigor as of now. So we are not worried about that. It should stay for next year.

35:06 Sir, how long do you say is the normal life of inventory? Based on the storage facilities, it will stay from 1.5 to three I think that depends on crop to crop. For cotton, it's really close to five years plus. And for maize and rice? Maize is the only delicate thing. Rice also stays there. Maize is the only delicate thing. For that, we have taken enough care. And you... By seeing the vigor and by seeing the proper storage, we are not worried about that. That... We don't see any major write offs in inventory. May is like one point five years or how long is May? May is like one point five to three. One point five to three. Okay. And I assume last year May's inventory must be negligible because it was in such a short supply. So basically, the so what I'm trying to understand is the May's inventory of last year must have been very low. It must be on new inventory, right? No.

36:06 Whatever inventory we have right now in on all the crops is all new inventory. Nothing is all produced in the last this financial year. So from that perspective, that's why you think it is quite safe to Yes. Because not that old inventory. Yes. And sir, margin wise, what's the guidance you gave for this year, sir, in terms of decline or increase? So if you see the first half margins we have maintained even though revenues were down, we were able to maintain in terms of the EBITDA margins. Going forward also like we should maintain the EBITDA margin, but by seeing the season that 510% that we need to see in terms of the shale because anyway it's a lean core. Second half is a lean half for us, but we are seeing good exports and we are seeing good traction in terms of the Northern cotton market, which comes in the fourth quarter.

36:58 So in that that covers up the margin should remain same or should be positive. Otherwise, impact will be there. But it's true, again, as we are anticipating some rains now, it's a bit early, but that we can give a clear proper idea in the third quarter. But as of now, it looks 10% less or minus of last year. Is it possible for you to share the trend of growth in the first six months for May's cotton in the two types of rice you produce? Sorry? Possible for you to share to us the growth trend that in maize rice and cotton Y on Y for the first six months?

37:45 We have already shared that in the presentation. May, we are down by 30 odd percent. Variable wise, we have slightly grown. Cotton and cotton remained there and rice slightly down by 2%, 3%. I'm sorry, sir? The numbers are already there in the presentation, but if you see the if you see the first half, except for May, it's almost most of the crops will remain same marginally upward on the 1%, 2%. Okay. Thank you. Thank you, Thank you, sir. The next question is from the line of Prashup Shah from Paglar Rock PMS.

38:33 Please go ahead. Hi. My question is here, we have two subsidiaries, Aditya AgriTech and Genomics AgriGenetics, which do nearly, like, 100 crore plus revenue each and fat of around 80 crore each. So in what? 80 crore? Crobs? So I think we we have, in fact, active three subsidiaries. One is Aditya, one is Kaveri Microtech, and the other one is genomics. Yeah. So genomics. Yeah. So Aditya and we are in genomics to which they do a revenue of 100 crores plus each. Mhmm. And that of 80 crores.

39:18 80 crores. That's wrong. It may not be $8.80 crores. It should be 8 or by 10 crores. Okay. So in what crops are they focusing on and what leads to such high profitability? So in fact, I don't know where you are seeing those numbers. They they just mark... They are the... They they are just marketing companies. They don't have that sort of a profit of 80 crores. If you see... One second. If you see the part of a stand alone on this year, they're, like, $2.68 crores. And the the console level the console level... One second.

40:09 At the console level, it's only $2.71 crores. The fact is slightly up by only 3%. In terms of the EBITDA minus other income, it's 86 versus $2.94. It's only INR 6 crores less in terms of the EBITDA levels. So, like, in one... They are just marketing from the and, like, in any Yeah. The the entire the entire research research production is done by Kaveri in terms of genomics and That's Kaveri supply feeds to them. They market it. And then that's the only thing what they do. Whereas the Kaveri Microtech that deals with micronutrients and byproducts that works on an independent basis. The revenue of that company is close to INR 35 crores to 40 crores, which is again slightly profitable.

41:08 My next question is how high would be our dependency on hybrid like four sixty five for PADI and similarly made? And how would our revenue contribution be revenue concentration be? In terms of the rise, four sixty eight, we are very much dependent on four sixty eight. There are a couple of varieties also, but majority of the revenue in hybrid rice comes from four-six-eight. We have a large dependency on that. There are a couple of hybrids which we have introduced in the last three, four years, but still that need to take volumes attraction. But as of now, if you see the current year, we have dependent four-six-eight. But whereas if you see like crops like varietal rice or maize, there are many hybrids. There are tens of hybrids which we market.

41:55 So we are not dependent on that. Even in cotton, are at least six to eight hybrids. So only in rice, we depend on those two or three hybrids, four, six, eight, nine, zero, nine, zero. These are the two hybrids that we rely on. And so my last question is we heard from some channel checks that few distributors are common for Kaveri and Genomics, and there are few who are cannibalizing Kaveri's business. So how do you ensure that such things are minimum? And what is your overall channel strategy for our subsidiaries? And how different are the distributional retail margins when compared to the Kaveri? One thing, first of all, what Kaveri sells and what genomics or Aditya sells are altogether different habits.

42:49 There are no two same habits which we sell in different brands. All are different habits. 90% of our dealers are independent dealers. In some markets where we don't have any option, then they deal with to where it is very minimal. So it's done for the cannibalization. We don't see at least from our own hybrids, own companies. And as a farmers with the intention of starting these companies are basically in in crops like cotton. The farmer has a tendency to go for three or four crops of of different varieties. That's the reason when we when we have a good research, we get many products, which have different characteristics and different abilities.

43:41 So we market those hybrids in different companies. And the main importance will be even to Kaveri and then to the other companies. So in some very, very few or rare cases that will happen. But anyhow, I need to check it out. It's a very rare occasion what we are hearing from it. Anyway, I'll check it out. It will not be. How different are the distribution retail margins, sir? How how different are the distribution and retail margins? It all depends on the hybrid to hybrid and variety to variety and company to company. Kaveri has the highest realizations. And in some areas, these companies are also got higher elevation in Kaveri. Those are all different varieties. There are very rich markets.

44:28 One thing we need to understand is that the hybrid, what we sell in different companies are different hybrids. It's not the same hybrids. Each has got different characteristics. Okay. Thank you. Thank you, sir. The next question is from the line of Akshit Sethi, an individual investor. Please go ahead. Hello. Am I audible? Yes, sir. Please go ahead, sir. Yes. First of all, congratulation on the 2Q 'twenty seven results, And thank you for taking my question. So my first question is related to the consolidated revenue. I can see that in 2Q 'twenty seven, the consolidated revenue was 144 crores against the stand alone of INR 125 crores.

45:23 And in 1Q seven, it was reversed. Consolidated was INR $7.42 against stand alone of INR $8.15 crores. And on the 1Q 'twenty six call, you said you would come back on this, but it has not been covered since. And secondly, for one first half of the twenty seventeen, how much of the Kaveri stand alone revenue was sales to its own subsidiaries? And how much the subsidiary sales to outside customers? And will you add consolidated figures to the presentation from 3Q twenty twenty seven? So I just need to check it out in terms of the presentation. But if you see, the first quarter consolidated to the first half.

46:16 First quarter what we see, we take the anticipated results and that will not give an effect in the first quarter because that's the reason you see standalone sales are more than the consolidated. But if you see the best way to compare is from the first half to first half, we have already noticed this. We are trying to publish the figures from the next year first quarter, which will be comparable. Like we'll knock off the returns and then you get actual figures. Okay. Okay. Think if you see the first half to first half, these are more relevant because most of the returns are already accounted. That's the reason you get this effect. In the first quarter, the returns are anticipated returns.

47:03 That's the reason you see that knockoff effect. Okay. Thank you. Thank you for clarifying this doubt. And we are we got this. We are trying to publish the results from the next year on an actual figure for that. Because as we take the as we show the liquidation figure, the returns are not physically get back to the company. That's the reason we are facing problem. But first half, most of the returns are already accounted. That's the reason you don't see any difference in first half. You have to have comparison. Okay. Okay. Thank you. Thank you for clarifying that. My second question is related to cash. On 1Q 'twenty seven call, you said the cash of about INR $2.67 crores at the end of means 1Q 'twenty seven would be close to INR 300 crores in the end of 2Q 'twenty seven.

48:03 And the 2Q 'twenty seven press release show INR 178 crores of cash, I guess, about INR $4.10 crores at the end of 2Q 'twenty six. And the 2Q 'twenty seven stand alone loss was only like INR 3.21 crores. So where did the roughly INR 90 crores go in 2Q 'twenty seven? Whether it did it go to seed production, lower payable dividend or subsidiaries? And what were the inventories and seed crops in the field at the end of 2Q twenty seven compared with $11.30 crores at the end of 2Q twenty six? If you see the payables at that particular time, the payable at quarter one to quarter two, we have paid most of the to the creditors.

48:55 So that's all the production growth. We have cleared the entire payment for them. Whatever payment we have given in the last three months is for them. And in terms of the inventory, as I said that the cash is low when compared to last year because the inventory levels are pretty high when compared to last year. The inventories are more than INR 150 plus crores higher than last year. So the cash got or is there in the inventory. Okay. So you are seeing Once we are able to realize that in the next year, first half, then you get the entire cash back. Of the cost, we have minimized our production compared to last year. Whatever cash we generated, that will be all of the free cash. Okay. Okay. Got it. Got it. Okay. Thank you. Thank you for it.

49:43 It's finished. Thank you, sir. The next question is from the line of Dhruv Sarraf from Bowway Head India's Fund. Please go ahead. Dhruv, sir, just one question on the CWIP capital work in progress in the balance sheet. That figure has been stuck around INR120 crores, INR130 crores. So can you give me some color as to when will this be capitalized? What does the CMIP pertain to? Basically, one is that the machinery and second is from the we are buying some land, agricultural land that is not registered yet. Office and agricultural land, these are the two things that will take other six to eight months. So that entire amount is for agricultural land? More than say 50% is for the agriculture land, 50% to 60%.

50:30 Okay. Sure. Sure. Thank you. Thank you for joining the call. For any further information, please be in touch with Raman Ader from Instech. Thank you, sir. On behalf of Kaveri Seed, that concludes this conference. Thank you for joining us. You may now disconnect your lines.