G.V.
Bhaskar Rao
Chairman
& Managing Director
During the
year, we achieved increased area coverage in two of the major segments, rice and wheat,
which resulted in good revenue growth. Apart from that, there has been good revenue growth
in hybrid rice, maize, vegetables and all other seed segments.
Dear
stakeholders,
The last
two years have been marred with challenges and opportunities alike. We have witnessed a
global pandemic play out, geopolitical conflicts and several other headwinds that have
weighed on the prospects of both advanced and emerging economies. Our resilience was put
to the test. However, we at Kaveri Seed sharpened our capabilities and emerged stronger
amid adversities. The resilient performance that we have delivered in FY 2022-23 is an
outcome of the unflinching efforts of our team members and our consistent focus on
ensuring quality. It gives me immense pleasure to share that during FY 2022-23, we were
able to convert volume growth into revenue growth across all our segments.
Overview of
the agriculture sector
India is
primarily an agrarian economy and has essentially attained self-sufficiency in food grain
production, generating robust and rapid economic growth in recent years and this trend is
expected to continue in the future. The country has distinct competitive advantages, such
as a massive arable land area and diversified agro-climatic conditions that favour
cultivation. The agriculture industry is crucial to Indian economics, politics and
society. Being aware of the sector's immense growth potential, the Government has
rolled out several policies to improve crop yield, ensure certainty of returns to the
farmers through price support (the Minimum Support Price), promote crop diversification
and implement focused interventions to enhance credit availability, facilitate
mechanisation and boost horticulture and organic farming. While the sector has always
played a crucial role in the Indian economy's overall growth, it continues to gain
further prominence due to considerable export earnings and being a major source of raw
materials for various industries. With a focus on eliminating poverty and food insecurity,
the agriculture sector is expected to sustain its position as the engine of the country's
long-term growth and development.
Looking
back on the year gone by
During the
year, we achieved increased area coverage in two of the major segments, rice and wheat,
which resulted in good revenue growth. Apart from that, there has been good revenue growth
in hybrid rice, maze, vegetables and all other seed segments. In the year under review,
our margins were impacted by high input costs. Considering the fact that seeds form the
most important element of the entire agriculture value chain and cost less than 5% of the
total input cost for a majority of crops, the high input costs of seeds did not prove to
be a significant impediment to our growth. However, we are trying to optimise our costs to
the extent possible through various measures across the operational canvas. We were also
able to gain market share and realise much better results than our competitors. There was
margin expansion in FY 2022-23 and EBITDA margin stood at 28.07%, up by 320 basis points
and PAT margin was at 25.24%, up by 346 points. This has been very encouraging; and we are
confident that we will be able to maintain and strengthen our margins going forward.
Rising hybridisation and the increasing share of new products in each segment has yielded
positive results this year; and we anticipate sustained growth in the coming years.
During the
year under review, our revenue stood at H 1000.56 crores, compared to H 915 crores,
recording a growth rate of 9.35%. The EBITDA was H 296.94 crore, up by 24.55% from FY
2021-22. PAT stood at H 267.04 crore, up by 27.83%. Cash on books stood at H 526 crores.
Operational
highlights
In FY
2022-23, cotton saw a notable 7.01% volume increase and a 2.87% revenue growth. Hybrid
rice experienced a positive trend with a 12.33% volume rise, and the selection rice
achieved a 6.18% volume growth. Maize was highly successful, witnessing an impressive
25.61% volume surge, leading to a substantial 22.37% revenue increase. New products
contributed significantly, accounting for 33.87% of maize segment volumes, up from 17.39%.
In the
bajra division, volumes rose by 25.16%, accompanied by a substantial 30.66% revenue
increase. New products played a major role, contributing 54.11% of total volumes, up from
41.42%. The vegetable seeds category maintained stable sales volumes, while revenue
experienced modest growth of 3.76%. Notably, certain vegetable crops, including bitter
gourd, tomato, okra, and watermelon, performed exceptionally well throughout the year.
Overall, we demonstrated positive growth across various segments, with increased volumes
and revenue, as well as the successful introduction of new products in key markets. In
terms of exports, our major revenue came from Bangladesh, and we are planning to establish
ourselves in that region with a new office. Despite the challenges posed by the Covid
pandemic, we have successfully recovered and expanded our presence in the Middle East
(UAE) and Africa (Nigeria). This growth has been further facilitated by completing product
registration in Cambodia and Laos and making plans to register in new countries, including
Myanmar, Algeria, Egypt, and Nepal.
Our
successful growth this year is the result of interconnected strategies, including a
strengthened supply chain to meet farmer demands with high-performance hybrids while
maintaining quality. Our unique product differentiation demonstrated through the Kaveri
Progress Programme has transformed farmers into our enthusiastic spokespersons.
Additionally, we strategically increased seed production locations and maintain a
well-designed inventory to secure leadership in key crops. Proactive education programs
empower our reliable grower base to maximize yields, and location-specific genotypes
ensure adaptability in diverse environments, strengthening our market position.
Investing
in R&D for sustained growth
We are a
strong R&D-focused company, and over the years, have been agile in bringing multiple
new seed variants across the seed segments. Our commitment to innovation is evident in the
recent release of the Tobacco streak virus (TSV) hybrid,
During the
year, we achieved increased area coverage in two of the major segments, rice and wheat,
which resulted in good revenue growth. Apart from that, there has been good revenue growth
in hybrid rice, maze, vegetables and all other seed segments.
along with
our continuous efforts in developing Bajra hybrids and Rice hybrids. We develop
location-specific hybrids, tailored to meet the specific needs of different regions. With
our unwavering dedication to research and development, we have significantly increased our
R&D spending, and our promising pipeline of hybrids instils confidence in our growth
prospects for the next five to ten years.
Growing
responsibly
Our
dedication to responsible growth has been integrated into all aspects of our operations.
At Kaveri Seed, we aspire to make a positive change and contribute to the upliftment of
our local communities. During the fiscal year, we made significant strides to scale up our
CSR initiatives and focused especially on education, health, agriculture, rural skill
employment and building rural infrastructure. Our total CSR expenditure for the year stood
at H 5.79 crore, which reflects our commitment to foster community development.
Strategic
outlook
The
Government's commitment to advancing Indian research and encouraging approvals for
indigenously developed new hybrid and advanced seed varieties will augur well for us in
the coming years. This will facilitate our overall expansion and we anticipate a
revolution in seed technology advancements from both domestic and international
businesses.
Gratitude
As we enter
the new fiscal year, I remain optimistic that our prudent investments in technology,
innovation and operational excellence will continue to fuel our long-term success.
Standing true to our values, we will remain agile in our approach and adapt to the
changing industry dynamics. This will help us scale new heights as the agricultural
landscape continues to evolve. I want to take this opportunity to thank our team members
for their dedicated efforts throughout the year. I am also very grateful to our clients,
partners and other stakeholders who have reposed their trust and confidence in us. I look
forward to an exciting year ahead.
Warm
Regards,
G.V.
Bhaskar Rao
Chairman
& Managing Director