Kaveri Seeds Eyes Robust Growth and Margin Improvement

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Overall Sales Growth: Projected at 15-20% for the next 3-5 years; FY26 year-end stand-alone growth expected around 20%.
  • Non-Cotton Segment Growth: Anticipated to grow approximately 20% annually, driven by maize, hybrid rice, and vegetables.
  • Export Growth: Expected to increase by 30-40% year-on-year in new international markets.
  • Cotton Segment Shift: New cotton products' contribution to sales increased from 12% to 34%; projected to reach 80-90% of cotton revenue by FY28.
  • Margin Outlook: Overall EBITDA margins, which saw a slight 1% dip in Q1 FY26 due to cotton, are expected to improve, supported by moderating production costs.

Kaveri Seed Company Limited (KSCL) recently reported a strong Q1 FY26 with a 16.98% revenue growth. Building on this momentum, management outlined a forward-looking strategy focused on substantial expansion. The company projects an impressive 15-20% overall growth for the next 3-5 years, signaling confidence in its diversified portfolio and strategic investments. This outlook points to a period of sustained performance and improved profitability.

Diversified Portfolio Fuels Future Sales

Kaveri Seed Company Limited is strategically expanding its revenue streams. The non-cotton segment, encompassing hybrid rice, maize, and vegetables, is projected to achieve “around the 20% growth levels going forward,” driven by increasing acreage and a robust pipeline of new hybrids. Management stated,

the second half will be much better than last year because we see a huge, I mean, very good positivity for maize.

Beyond domestic non-cotton, the company forecasts a substantial “30% to 40%” year-on-year growth in its export business, expanding into new international markets like Bangladesh, Tanzania, Vietnam, and the Philippines, where its products are gaining acceptance.

Margin Improvement and Innovation Drive Profitability

Kaveri Seeds aims for enhanced profitability despite challenges like illegal cotton seeds and restricted pricing. While cotton margins faced a slight drag in Q1 FY26, the non-cotton segments improved. The Executive Director affirmed,

going forward, the margin should improve,

attributing this to an expected moderation in the cost of production, which rose previously due to competition. Innovation is key, with new cotton products already contributing “from 12% to 34%” of sales. The company targets 80-90% of its cotton revenue from new products by FY28, supported by strategic inventory management and investments in a new R&D plant.

Kaveri Seed Company Limited's Q1 FY26 performance sets the stage for a period of robust expansion. The company’s guidance underscores a clear strategy to achieve 15-20% overall growth through a diversified product portfolio, aggressive export market penetration, and a strong focus on new product innovation. With expectations of moderating production costs and improving margins, KSCL is positioning itself for sustained, profitable growth across both its traditional and emerging segments.

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