Kaveri Seed Company Ltd Management Discussions.

Indian Economy

During the fiscal 2018-19, the Indian economy continued to consolidate on volatile macroeconomic scenarios. Despite the recent sluggishness and increase in petroleum prices, economic growth continued to be robust and inflation remained more or less stable as the fiscal and current account deficits as percentages of the GDP hovered at acceptable levels. The Indian economy, retaining its tag of fastest growing major economy in the world for the second time in a row, registered a growth rate of 6.8% during the 2018-19. The stress laid on fiscal consolidation through expenditure rationalisation, revenue raising efforts, tactical administrative measures for cooperative financial governance and containing inflation have contributed significantly to macroeconomic stability.

Indias GDP growth

While highlighting the fact that India has the fastest growth amongst G20 economies, with export growth holding up well, it is to be further mentioned that the Indian economy is expected to grow at around 7.20% in 2019, accelerating to somewhere in-between 7.3% - 7.5% by 2020 buoyed by rural consumption and subdued inflation. The Index of Industrial Production (IIP) with base 2011-12 for the April-January period for 2018-19 registered a 4.4% increase over the corresponding period for the previous year. Growth in the agriculture sector is expected to be moderate as the Gross Value Added (GVA) at basic prices for the sector is estimated at 2.7% for 2018-19 on a high base of 5% in 2017-18. The manufacturing sector is expected to post robust growth with the sectors GVA growth estimated at 8.1% in 2018-19 as compared to 5.9% during 2017-18 Strengthened by the benefits derived from structural reforms such as the Goods and Services Tax (GST) harmonization and bank recapitalization, uptick in domestic demand gained momentum in 2018. Further impetus was provided by sustained investment growth, which has strengthened as the effects of temporary factors wane. On the trade front, Indian exports grew by 3.74% over January 2018 to reach USD 26.36 billion in January 2019.

Indian agriculture sector overview

Contributing substantially to countrys GDP, the Indian agricultural sector is the primary source of livelihood for ~58% of Indias population. One of the mainstays of the fastest growing economy of the world, agriculture plays a pivotal role in improving rural incomes and securing Indias food and nutritional needs.

Rewarded richly by nature in terms of varied agro-climatic zones for cultivation of diversified crops, India is the largest producer of spices, pulses, milk, tea, cashew and jute, and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds. Further, with 46 out of the 60 soil types in the world, India is second in the global production of fruits and vegetables along with being the largest producer of mangoes and bananas. According to second advance estimates released by the Department of Agriculture, total food grain production in India is estimated at 281.37 million tonnes during 2018-19 as compared to 277.49 million tonnes in the previous fiscal. The total rice production for 2018-19 is estimated to be around 115.6 million tonnes, 4.59 million tonnes higher than the production of 111.01 million tonnes in 2017-18. Wheat production in 2018-19 is estimated to be around 99.12 million tonnes, compared to 97.11 million tonnes in the previous year. Availability of food grains per person increased from 452 gm/capita/day to over 476 gm/capita/ day, even as the countrys population almost doubled, swelling from 548 million to nearly 1250 million.

Production of food grains in India during Kharif and Rabi seasons (in million tonnes)

Highlights of Union Budget 2018-19

In line with the Governments mission to strengthen the countrys agricultural sector, the Union Budget of 2018-19 saw the following initiatives announced by the government to provide the required impetus to strengthen the agricultural sector: The Government stated its position in committing to doubling farmers incomes by 2022.

A total of Rs 14.34 lakh crore (USD 225.43 billion) would be spent for creation of livelihood and infrastructure in rural areas. Minimum Support Price (MSP) for all announced Kharif Crops and Majority of Rabi Crops would be at least one half times. Institutional credit to the agricultural sector would be targeted at Rs 11 lakh crores (USD 172.93 billion) for 2018-19 compared to Rs 10 lakh crores in 2017-18 An Agri-Market Infrastructure Fund set up with a corpus of Rs 2,000 crores (USD 314.41 million) would be aimed at developing and upgrading agricultural marketing infrastructure in the 22,000 Grameen Agricultural Markets (GrAMs) and 585 Agricultural Produce Market Committee (APMCs) Allocation for the National Livelihood Mission was increased to Rs 5,750 crores (USD 903.93 million) for 2018-19 Allocation of Ministry of Food Processing was being doubled from Rs 715 crores in Revised Estimate 2017-18 to Rs 1400 crores in Budget Estimate 2018-19 A proposal was floated for the setting up of state-of-the-art testing facilities in all the forty two Mega Food Parks Another propose was floated to launch a re-structured National Bamboo Mission with an outlay of Rs 1,290 crores to promote the bamboo sector in a holistic manner

Highlights of Interim Union Budget 2019-20

Considered as one of the key drivers of the economy, the Interim Budget 2019-20 took some decisive steps aimed at further strengthening the countrys agricultural sector: A historic programme named Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) was being launched to provide assured income support to vulnerable farmers in the country, effective from 2 December 2018; under the scheme, families with cultivable land up to two hectares would get direct income support of Rs 6000 (USD 84.38) per year in three equal instalments. Around 120 million small and marginal farmer families would benefit from this programme.

Under the Agricultural Marketing Infrastructure (AMI) scheme, creation of 40 lakh MT of storage capacity & 400 other marketing Infrastructure projects would be targeted by 2019-20.

An amount of Rs 8078.76 crores (USD 1.12 billion) was allocated to the Department of Agricultural Research and Education. Further, an amount of Rs 1.41 billion (USD 19.54 million) was allocated to the Ministry of Agriculture and Farmers Welfare. A fund of Rs 60,000 crore (USD 8.32 billion) was also allocated to the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA)

Major issues faced by the Indian agricultural industry

Population pressure and demographic transition

Resource base degradation, water scarcity and lack of irrigation facilities Restricted usage of modern science and technology and reduced support of research and technology development; and Inadequate storage facilities Quality seed through SRR needs acceleration Rapid urbanization

Export scenario

India is the ninth largest exporter of agricultural products in the world. Total agricultural exports from India grew at a CAGR of 16.45% over FY10-18 to reach USD 38.21 billion in FY18 and the total agriculture exports from India stood at US$ 34.36 billion between April 2018 – February 2019.

Despite the strong y-o-y growth, Indias exports of agricultural commodities plunged by a staggering 46% in terms of volume in FY2019 (from April 2018 to December 2018). This is largely on account of a supply glut in the international market, which prompted stockists to defer their purchase plans amid expectations of a further price fall. In December 2018, the Government of India approved the Agriculture Export Policy, 2018, which aims to increase Indias agricultural exports to USD 60 billion by 2022 and USD 100 billion in the years following 2022 with a stable trade policy regime.

Favourable export policies

To double agricultural exports from present ~US$ 30+ Billion to ~US$ 60+ Billion by 2022 and reach US$ 100 Billion in the next few years thereafter, with a stable trade policy regime To diversify the nations export basket, destinations and boost high value and value added agricultural exports including focus on perishables To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products exports To provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phyto-sanitary issues To strive to double Indias share in world Agri exports by integrating with global value chain at the earliest Enable farmers to get benefit of export opportunities in overseas market

Growth drivers

Changing consumer tastes

Indian farmers are shifting production towards horticultural crops to cash in order to cater to growing demand of vegetables and fruits by the consumers. Fresh fruit exports from India reached USD 736.1 million in FY18 while fresh vegetable exports reached USD 775.5 million. As of February 2019, fresh fruit exports from India were at USD 593.9 million while fresh vegetable exports reached USD 688.8 million.

Increasing demand

India is the second most populated country accounting for 18% of the total world population. With an increase in the population, the need for various agricultural products has increased significantly. This rise has prompted farmers to adopt enhanced technologies to meet the diversified food needs of the people. Additionally, more than 50% of Indias population is dependent on agricultural products. Rising incomes, rapid urbanisation, a young population and the emergence of nuclear families is expected to further propel the demand.

Newer farming methods

The introduction of biotechnology in seeds and fertilisers and growing acceptance towards hybrid seeds is driving farmer income as well sustain crop productivity. In addition, government subsidies for farm losses, better irrigation facilities and newer technologies to have a better understanding of soil and weather conditions are expected to drive the growth of the sector in the near future.


India has made impressive strides on the agricultural front over the last three decades. Government support across different areas, like improving irrigation facilities, storage facilities and improved cold storage structures, is likely to play a vital role in the future of the Indian agriculture sector. The Indian governments provision of subsidies to farmers across different input factors such as water, power, agricultural equipment, fertilizers and hybrid seeds is likely to provide the required impetus for growth to the sector.

Seed industry insight

Seeds are embryonic plants covered in a protective coating which function as the unit of reproduction for the parent plant. They provide food for a number of animal species, and form a basic part of the agricultural process. Over the past several decades, the significance of seeds in the agricultural industry has increased rapidly on account of advancements in technology and the subsequent introduction of enhanced seed varieties. Growing at a CAGR of 7%, the global seed market reached USD 66.9 Billion in 2018.

With a significant shift in farming patterns and practices over the last few years, and owing to increased demand for agricultural products, more and more farmers are now buying commercially produced enhanced seed varieties as opposed to using seeds from the last harvest. The reason for this choice is the innate advantages offered by enhanced varieties of seeds such as higher yields, improved nutritional quality, reduced crop damage and tolerant to pest and diseases. Moreover, the increasing global population and the consequent rise in demand for food, coupled with expanding biofuel production, have also stimulated the demand for enhanced seed varieties worldwide. Owing to these factors, the global seeds market is further expected to grow at a CAGR of 6.6% during 2019 - 2024, reaching a value of USD 98.1 Billion by 2024. (Source: globe news wire)

Seed Sector in India

Over the years, the Indian seed industry has grown in importance, especially given its role within the agricultural sector of a nation seeking food-security for a rapidly increasing population and given the global shift in food consumption patterns. The seed industry is poised for rapid growth in the next few decades, subject to the presence of a conducive business environment and supporting regulatory framework.

Given that seeds or planting materials are the primary input in agriculture, holding the genetic potential of the plant that emerges from it, quality of the same is of utmost importance. It would not, in fact, be an exaggeration to state that the health and progress of the agricultural sector in a nation state is critically linked to the quality of seeds used by its farmers. Better seeds with improved genetics and seed security will eventually lead to food and nutrition security in India. It would build an agricultural future that would be able to withstand challenges posed by increasing population numbers and climate change.

In 2017 the Indian seed market was valued at ~USD 3.6 billion dollars, exhibiting a CAGR of around 17% during 2010-17. The overall goal of GoI for food grain production in FY 2018-19 was 285.2 million tonnes, which is slightly more than the goal of 284.83 tonnes in the previous financial year. Globally, India ranks fifth in seed market size but 27th in the seed trade market. This incongruence can be explained by the fact that its top producing crops are not on its export list owing to restrictions imposed by either India or destination countries. For instance, its vegetable export portfolio is dominated by Solanaceous crops, okra and cucurbits. It has, however, the potential to be a competitive export hub owing to the presence of necessary talent and favourable agro-climatic conditions for seed production. It could, for instance, capitalise on growing tropical crops for export to European and US markets. (Source: IMARC Group report Seed Industry in India) India is already the destination to several seed multinational companies that have established R&D bases in the country. With Indian public and private sector both increasing their focus on R&D and application of advanced biological tools to traditional means of seed development and propagation, the industry can progress rapidly. India is in the advantageous position of having at its disposal an enormous cache of diverse indigenous germplasm; with the right effort and focus it could capitalise on this natural asset and help produce a diverse variety of field and vegetable crops. In order to increase the quality and quantity of said produce and agricultural sector output, efforts need to be made to introduce improved varieties of seeds with the help of advanced breeding technologies and modern agricultural methods.

Telegana – the seed hub of India

Producing nearly 60% of the nations seed requirement, the state has transformed itself into a seed hub of India. Gifted with excellent weather conditions, the state has excelled in the production of seeds of different crops like cotton, sorghum, maize, pearl millet, sunflower, forage sorghum, selection rice and hybrid rice and varieties of pulses, oilseeds and vegetables. Further the pervasiveness of necessary temperature conditions and qualified humidity levels in Telengana, the state also has the perfect weather condition to make it a seed storage hub for 9 – 12 months under ambient situations. The state boosts the presence of several companies of various sizes related to seed industry, also being one of the largest state exporter of seeds in India.

Seed Replacement Rate (SRR)

Generally referred to as how much of the total cropped area was sown with the quality seeds in comparison to farm saved seeds. Seed has to be produced in the field and it is not a one time affair, its a year on year mechanism requiring careful planning coupled with proper and timely pre- and post-seed production practices, it can only bear fruitful results only with time. Different proactive efforts and various seed related programmes on the part of the government has resulted to an increase in Indias SRR over the last couple of years. The Indian farming community is finally realising the importance of quality seeds and are therefore tasked with making relentless efforts to bridge the gap in quality seed replacement (almost 60%).

Company Overview

Knowing Kaveri Seeds

Starting as a small seed producing Company in 1976 at Gatla Narsingapur, Telengana, the Company has grown over the years to make a name for itself within the industry and has emerged as one of the premier multi-crop producing Company in India. Guided by one of the doyens of the industry, the Company has built a strong distribution network spread across the length and breadth of the nation, which has enabled the Company to widen its reach. With more than three decades in the industry, the Company today is one of the top three seed companies in India and is also a symbol of trust for nearly 3 million farmers across India. Over the years, Kaveri Seeds has enhanced farmer trust by providing a complete seeds basket, comprising of field crop seeds and vegetable seeds. The Company provides a complete seeds solution - across crops, seasons and terrains, enabling farmers to generate a larger return from their given land area. Supported by a strong R&D base, the Company has not only been successful in developing an innovative product range which has helped to meet previously unmet needs of the nations farmer community, but has also helped the Company in capitalising on emerging opportunities. The Companys success speaks for itself in being listed as a Forbes Top 200 Company in the Asia-Pacific regions from 2010 to 2013 and then again in 2015.

SWOT Analysis

Strength: Weakness
Company developed different duration hybrids in each crop so that it can fit well under different situations Company has concentrated its business on multicrop so as to make seed business in all crops. Irregular Monsoon and late arrival of monsoon affects the seed sale
Most of the seed business is generally in the rainy season (Kharif)
Experienced and Qualified top Management team Cropping pattern shifts due to late reciept of monsoon.
Long lasting relationship with customers Adapting to changing and unpredictable agro-climactic conditions
Established brand and distribution network with more than 35000 dealers/ distributors.
Strong R&D capabilities with fully equipped research stations
Variety of seeds produced during the year
High and good quality products in field and vegetable crops
Unrivalled farmer loyalty: Nurturing farmer relationships since decades
Developed strong multi crop product portfolio
Opportunity: Threat:
Maintaining efficient supply chain and strong relationship with farmers for long term earning visibility. Unfavourable environmental risks such as excess/deficit/ erratic rainfall and fluctuations in climatic conditions temperature and Relative Humidity may hamper the productivity of crops.
Introduction of new hybrid seeds for major products can help to boost revenue of the Company.
Expansion outside the country can help to capture domestic as well as international market. Impact on production due to pest and diseases.
New products being highly accepted in the market giving the Company a confidence to achieve new targets with futuristic innovation. Regulatory threat from government on issues of distribution, price and policies.

Strong distribution network

As one of the most respected and responsible seed producing Company within India, with more than three decades of experience, the Company is well positioned to meet the changing needs of the nations farming community. To deliver on this purpose, the Company continues to improve and evolve its distribution network in terms of how quickly and efficiently it is able to make available its products to end users. In line with this strategy, over the years, Kaveri has focused on building a strong and deep-rooted distribution network necessary for delivering innovative and excellent products in a safe, timely and responsible way to the grower community of 35000 dealers across India engaged in distribution of seeds to reach the farmers.

Research and Development

Being in a unique seed producing and marketing business, the Companys strength is cutting-edge research and development, enabling higher yield for the farmer community and improved seed quality. Over the years, the R&D team developed superior seeds which are tolerant to diseases and pests and the vagaries of the climate; the result is that its products like BT Cotton hybrids, maize hybrids, rice hybrids and selection rice varieties are one of the bestselling of its type.

The Company has over 600 acres of dedicated research farms in and around Hyderabad. Its strong R&D base has resulted in new hybrids in cotton, maize, rice, bajra and vegetables that have made significant impact on farm yield. Kaveri also has a strong line-up of hybrids ready to be launched which are tailored to yield in different environmental conditions.

The state-of-the-art biotechnological interventions ensure efficient quality check measures coupled with biotechnology lab (enabling smart breeding) have made the Company the most productive and innovative Company in the industry. Kaveri strives to go from strength to strength, continuing to improve returns while accelerating the pace of innovation. Towards R&D, the Company has been collaborating on research with several national and international institutions, developing products that meet farmers needs, insure crops against the threat of climate change and make them tolerant to biotic and abiotic stresses.

Participatory plant breeding: Essential to Companys process is farmer involvement. It makes a point to work together with farmers in the selection process of breeding material and advance testing trials and demonstrations. The Company also takes their suggestions and critical views into consideration while designing products for present and future situations.

Focus on germplasm: Germplasm is critically important as it acts as a reservoir for further breeding programmes in cutting-edge research that allows the Company to carve, augment and design plant types according to the changing needs of farmers across crop segments. Through international collaborations it has also enriched germplasm bank with exotic germplasm that can be blended with indigenous types in order to make it most suitable for Indian conditions.

Biotechnology: Kaveri is one amongst the top biotechnology companies with scientific expertise to use biotechnological tools with the conjunct use of advanced plant breeding keeping in view with the ‘futuristic products which will play a significant role in the farmers field and it is showing new trends in farming prosperity. The use of molecular markers increases crop yields through heterosis, accelerates breeding cycle.


Kaveri Seed Company has national & International collaborations in the frontier line of science to design the products in field and vegetable crops as per the need of the hour.

Crop focus

Over the years, Kaveri has innovated continuously to be farmer-centric and have developed high quality hybrid seeds that has significantly improved yield for farmers. Its diverse portfolio caters to key crop segments and mitigates the risk of unanticipated shifts in crop rotation. The Companys products are gaining acceptance among Indias farmers and in countries where it exports seeds. Kaveri is proud to be the only Company to have a footprint across cotton, rice, maize, pearl millets, sunflower, sorghum, pulses and vegetables clubbed with the largest pipeline in hybrids across categories.


Cotton is one of the best gifts that nature bestowed on mankind. It is also known as ‘white gold, Cotton plays a dominant role in Indias agricultural and industrial economy. Based on segment-wise research for south, central and north zones, the Companys efforts are focused on developing early- and medium-type hybrids. Generally the research efforts are focused towards developing ideal plant type by accumulating desired genes so as to fit well for rainfed, support irrigated situations. In cotton Pink boll worm incidence was noticed in certain agro-climatic pockets of India, the farmers were advised to follow IPM practises to raise a healthy and eco-friendly crop. We bank on our valuable germplasm to design & develop plant type, for the specific needs of the zone(s) and as per the need of farmer and cotton industry. Our main thrust of research is developing pest and disease tolerant hybrids so as to minimise cultivation expenditure and improve the farm income. Further we maintain acceptable cotton fibre quality standards in our products, so as to fetch good market price to the farmers. In this endeavour we have succeeded to release our promising products namely Jaadoo and ATM previously, still they are very popular among the farmers and ploughing lion share of revenue to the Company. The popular hybrids were converted into GMS base so as to avoid manual emasculation of flowers, thereby minimising cost of seed production and increase the profitability.

In recent years, Kaveri intensified its research efforts to develop early and medium maturity hybrids that are suitable for North Zone. The genotypes developed possess high heat tolerance in early growth period while showing high CLCuV disease tolerance at middle and late growth stages.

Significant achievements were recorded for designing, developing cotton hybrids by changing the genetic architecture and received approval for Money Maker BGII and KCH-111 BGII. We have focussed target breeding in cotton by establishing satellite cetres in South, Central and NorthIndia. Each region of the plant ideotype, pest, disease and environmental conditions differ throughout the country. According to the situation(s) , we are augumenting our research efforts to design the plant as per need of the tract, so that our products can penetrate more vibrantly.


Maize, the worlds primary coarse grain, is also known as king of cereals. It has the ability to grow in diverse climatic conditions. Its production is concentrated in North America, especially the USA, South America and China. In India, Maize ranks as the most important food & feed crop next to rice and wheat. It is used for multiple purposes like for poultry and cattle feed, human consumption and industry. Maize is expected to grow further due to its wide spectrum of industrial usage through the breeding of specific types of hybrids. Thus most of the Multinational and National seed companies are concentrating their research efforts on Maize.

Maize breeding

Kaveri Seeds has market presence in all segments across India and has approximately 10% market share. To be one of the top three seed companies for maize in India, it has streamlined its breeding strategies. The Companys rich treasure of maize germplasm can support frontier line research to augment tailor made products. By employing molecular breeding and MAS tools, it has classified germplasm to incorporate specific biotic and abiotic traits in the pipeline products. The Company developed segment-wise research hybrids that cater to the needs of core geographies, such as seeds that are resistant to the Post -Flowering Stalk Rot (PFSR) disease and Northern Leaf Blight (NLB). The developed hybrids are compared with benchmark in-house hybrids as well as competitor hybrids. To meet the requirements of farmers, consumers and industry the Company has established strategic locations satellite breeding centres across India so as deliver the right product at the right place.

Rice research

Rice alone consists of 8% of the national GDP and 50% of the agricultural GDP. Rice is potentially of considerable interest to the private sector in the seed and agri-biotech industries. More than half of rice seed planted in India was purchased (rather than saved) by farmers suggesting that farmers are willing to pay for quality seed. This opens the door for the growth in the market for hybrid rice seed even though only 7-8 % of the rice area planted consisted of hybrid rice during the year 2018-19. Kaveri Seeds is giving equal importance to Hybrid rice and Selection rice, since the Indian market has a huge potential for both. It has accelerated its research efforts at main centre in Hyderabad and in satellite research stations to develop promising hybrids/ varieties segment wise suitable to different regions for biotic and abiotic stress. Generally in selection rice early, mid-early, mid-late, and late varieties will play a significant role while in hybrids mid-early and medium types are more important. High grain yield coupled with good grain quality plays an important role. Towards this end, the Company focuses on research attention towards developing genotypes having short, medium, long and slender grains with high milling percentage, high head recovery, better cooking quality and better taste. The frontier science, biotechnological tools were employed for trait integration through MAS, for important rice diseases, BLB, Blast/NBL and BPH. Rigorous testing is carried out in-house for MLTs, HAT, pre-commercial and commercial prior to release of the product(s) commercially. Further the Company nominated its pipe line products for ICAR network, SAU testing and International SE Asian countries.

Pearl millet

Bajra is a hardy crop, suitable under semi-arid and arid zones and sustain well under stressful situations useful for dual purpose, grain & fodder. It is generally grown in Kharif and summer situations due to its wide adaptability. The major pearl millet growing states are Rajasthan, Maharashtra, Gujarat, Uttar Pradesh and Haryana. As grain it is a good source of nutrition for human consumption because of high Iron & Zinc content. It is predominantly grown in Rajasthan, Maharashtra, Gujarat, Uttar Pradesh and Haryana. Since it is a hardy crop it fits well under moisture regime soils, and small and marginal holders can grow it under rain fed situations. Kaveri Seeds aims to identify a superior germplasm that is intrinsically resistant to various biotic & abiotic stresses. Induction of new germplasm and genetic improvement of indigenous breeds through comprehensive breeding for wider adaptability, increased productivity, enhanced nutritional qualities and tolerance to biotic and abiotic stresses are important focus areas for the Company. Keeping in view agro-climatic situations and small and marginal farmers requirement of dual purpose hybrids, Kaveri has focussed its research attention and successfully delivered superior products like ‘Super Boss and ‘Boss 65. Since climate change and global warming effects are leading to erratic rainfall, drought and incidents of downy mildew,blast disease, it has streamlined breeding strategies of pearl millet to combat these new challenges and to come out successfully with new products to meet the aspirations of farmers.

Mustard & Wheat

By looking the importance of these crops further research efforts were intensified for product development to suit under Northern belt of India.


Sorghum is a principle cereal crop of the world. It is the worlds fifth major cereals in terms of production and acreage. It is grown under semi-arid monsoonal tropical regions of the world and is generally grown in Kharif rain-fed situations as well as irrigated situations.


Pulses are an important constituent in local food crops in developing countries. They are the key source of protein in the diets of worlds poorest countries. In India, the commodity forms an important staple in vegetable based diet. In crop production system, pulses represent an input saving and resource conserving technology through biologically fixing nitrogen.


Sunflower seeds are a recent introduction to India and shortly occupied as a prime oil seed crop, due to high heterosis. It has a wider adaptability. It is a photo-insensitive crop thus it can be grown round the year. Generally it is grown under late Kharif and Rabi situations.

Vegetables focus

Vegetables are vital to the general good health of human beings, providing essential vitamins and minerals, dietary fibre, and phytochemicals. The area of world land devoted to vegetables has been increasing due to the potential income value from vegetables. India is the second largest producer of vegetables in the world after China, and improving on production can be best achieved through the development of improved hybrids /varieties and advanced technologies in combination with superior management skills. It is important for the seed industry to understand consumer needs and requirements and the value chain that have all become more complex over time.


Tomato is one of the major horticultural crops of the country. India is one of the largest producers of tomatoes in the world and around 11 % of the total world produce of tomatoes is cultivated in India. Kaveris focused research efforts has resulted in commercial cultivation promising hybrids- ‘The hybrids are unique for their shape, colour, firmness and tolerance to Early Leaf Blight as well as to the Tomato Yellow Leaf Curl Virus (TYLCV) and other important viral diseases. The Company is proud to have ‘KTH 304 released and notified by the Central Variety Release Committee (CVRC), Government of India, for respective zones of adaptation.

Hot pepper

Hot pepper is another important commercial crop in India. The country is its largest producer, consumer and exporter. In order to penetrate different segments for green and red chillies, the Company has enhanced its vegetable research activities. To further reduce the cost of seed production, the Company is shifting towards developing of Cytoplasmic Male Sterility (CMS) which is an alternative to manual emasculation process.


Okra is colloquially known as ‘Ladies Finger, or ‘Bhindi in Hindi. It is a vegetable crop which can be grown in tropical and sub-tropical areas. Okra is grown for its young tender structure and is used in curries and soups in Asian cooking. In India the major okra growing states are Uttar Pradesh, Bihar and West Bengal amongst others. Kaveris research efforts catering to the needs of the market were focused on developing lines resistant to the Yellow Vein Mosaic Virus (YVMV) and Okra Leaf Curl Virus (OLCV). Two hybrids ‘KOH 54 and KOKH 1107 have found promising.


Bitter gourd is an important vegetable crop and is grown for its immature tuberculate fruits which have a unique bitter taste. Bitter gourds have medicinal value and are used for curing diabetes, asthma, blood diseases and rheumatism. The important bitter gourd growing states in India are Maharashtra, Gujarat, Rajasthan,

Punjab, Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, West Bengal, Odisha, Assam, Uttar Pradesh and Bihar. Kaveri has international collaboration with the World Vegetable Centre for the exotic germplasm so as to design and develop suitable genotypes for Indian situations. Bottle gourd and Ridge gourd in particular, from the vegetable group, were the subjects of intensive research efforts to develop suitable hybrids segment-wise and promising lines are on the pipe line.


Watermelon, a popular summer fruit, is widely grown in the tropical and sub-tropical regions of the country. The Company has started R&D activity to develop suitable hybrids of the fruit to meet the increasing demand and changing customer preference.

Product Evaluation

We follow the stringent procedure to evaluate our pipeline products. Since India is a diversified agro-climatic country, the adaptability of crops to various zones, pest & diseases differ and also the choice of farmers and consumers vary. To design plant type according to the situation, robust method of evaluation is utmost important. In this endeavour we conduct approximately 100 evaluation trials for each season against the best commercial products available as checks for both field and vegetable crops. We record the USPs of each product along with their tolerance level towards both biotic and abiotic stress. We invite the local farmers and our sales team to our demo plots to compare our products against the leading commercial products in each crop and record their feedback on our pipeline products. All the observations recorded across locations towards yield potential, stability, reactions towards biotic and abiotic stress and the feedback of both sales team and farmers are thoroughly analysed, discussed and debated before launching the new product.

Kaveris satellite breeding stations

Based on the research gaps identified in the farmers field for each crop, the R&D strategy is prepared. To meet the respective crop breeding objectives, different satellite stations were established in India. Keeping in view region specific problems.

Biotech lab

The Company invests in the blending of traditional breeding with cutting-edge biotechnology. It has adopted candidate gene strategy, association mapping, and other such procedures to develop superior hybrids and inbred varieties that are high-yielding under optimum input use and stress environments. Some of the new technologies the Company has deployed include 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).

Risk management

Regulatory challenges: Unfavourable policy and regulatory changes on the part of the government can adversely impact the performance of Kaveri Seed. Reduction in subsidies, withdrawal of agriculture support schemes, marginal increase in the support price, reduction in seed sale price are few of the adversely impacting policies adopted by the government. However, the government has introduced several reforms that are favourable for the agriculture sector that position the Company well.

Competition risk: Increased competition from peers may impact the Companys trade. Being a proactive, the Company constantly invests in research and development to innovate new products keeping in mind new geographies and climate conditions. The Company also invests in different quality control measures to successfully sustain its product quality and also focus aggressively towards product penetration.

Product risk: Excessive dependency of the Company on a single crop or a few products may impact the Companys profitability. The Company has therefore over the years has built up a diversified product portfolio covering different field crops and vegetables which has helped it to reduce dependency on any one single crop. A sustainable research-based approach has helped the Company build a strong portfolio to meet the unmet needs of the nations farmer community and help build a sustainable entity.

Marketing risk: Inability of the Company to market its product could lead to inventory accumulation. The Company has over the years built a strong distribution network across India. The Companys distribution network today is supported by a network of 35000 dealers, coupled with the effort of an efficient marketing team, the Companys products are today available in the remotest village of India.


Despite of slowdown in the agricultural sector in FY 2018-19, Kaveri Seeds is optimistic of delivering strong growth across all crops. The recently presented Budget 2019-20 further reinforces the governments focus on empowering the agriculture sector to create a better output. The specific suggestion to form more than 10,000 farmer producer organisations (FPOs) in next five years is another bold move that will help marginal cultivators to have better rates for inputs and outputs. The budget also proposed plans to promote ‘zero-budget farming, an environment friendly and remunerative alternative to the prevalent chemical heavy and costly agricultural practices that degrade the soil, contaminate water and leave pesticides residues. The farmers also stand to gain from the revamped efforts of ‘ease of doing business by the government. Introduction of e-NAM will help farmers benefit from the nationwide market agricultural produce.

These benefits will compliment the Companys range of initiatives including introduction of new technologies to enhance the overall productivity and efficiency. Going forward, it plans to carry forward the growth momentum with increased focus on R&D, promotion and creating awareness of hybrid seeds and diversify into newer geographies and offer innovative products for sale. The Company even plans to further strengthen its supply chain by improving quality assurance capabilities and ensuring delivery of products according to climatic zone across the country. With introduction of new and improved products, the Company plans to strengthen its market share in many regions including Punjab, Rajasthan and UP.

Human resource management

Kaveri Seeds is home to exceptional talent that drives its success and growth, and the Company feels proud to acknowledge them. The Company focus on improving its talent pool by hiring a diverse mix of scientists and technocrats. The Company seek to provide a supportive and enabling work environment which encourages employees to embrace challenges and realise their full potential. Employee engagement is nurtured and enhances through communication meetings and creation of cross-functional teams. The Company brings in eminent individuals and professionals to conduct training programmes in management and technical skills. To encourage talent and incentivise employees it has also introduced the quarterly ‘Utkrista Puraskar awards that recognises the top performers across all departments. In the reporting year the Company underwent restructuring to manage the span of control. Every employee was assigned a reporting authority, while the superiors were given the responsibility of conducting periodical performance reviews.

Financial analysis

Particulars FY 2019 FY 2018 YoY growth (%)
Revenue (H in crore) 768.99 772.40 (0.44)
EBITDA (H in crore) 248.43 241.70 2.78
PAT (H in crore) 214.73 210.34 2.09
Earnings per share (in H) 33.30 31.36 6.18
Key ratios
Debt equity Ratio (in times) 0.01 0.01 -
Current Ratio (in times) 2.37 2.91 (18.55)
Inventory Turnover (in times) 0.76 0.82 (7.32)
EBITDA Margin (in %) 32.30 31.29 101 bps
Net Profit Margin (in %) 27.92 27.23 69 bps

During the year, the Company registered revenue from operations of Rs 768.99 crore. The profitability of the Company showed healthy growth of 2.78% and 2.09% in EBITDA and PAT respectively. Further, the Debt Equity Ratio remained same at 0.01 times demonstrating healthy balance sheet. In addition, the current ratio was posted at 2.37 times, the inventory turnover reduced by 7.32%.

Internal control systems and their adequacy

The Company has put in place a set of standards which enables it to implement internal financial control across the organization and ensures that the same are adequate and operating effectively. The findings and recommendations of the statutory and internal auditors are periodically reviewed by the Board, which suggests corrective actions based on them when required. The Audit Committee of the Board of Directors also actively review in the system of checks and balances that ensures the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and Finance Heads are periodically apprised of the internal audit findings and corrective actions are taken where required. Further, the Internal Audit team prepares annual audit plans based on risk assessment and conducts extensive reviews covering financial, operational and compliance controls. The Audit process plays a crucial role in keeping the Board of Directors informed of the functioning of the Company. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.

The Internal Audit team is reviewed by the Audit Committee of the Board which monitors its performance on a periodic basis through review of audit plans, audit findings and speed of issue resolution through follow-ups. Through at least four meetings every year, the audit committee reviews internal audit findings assurance and advisory function, which is responsible for evaluating and improving the overall effectiveness of risk management, control and government processes. This entire process helps enhance and protect organizational value by providing risk-based objective assurance, advice and insight.