Kaveri Seed Company Limited

Basic Materials — Agricultural Inputs · NSE

₹731.00+₹0.80 (+0.11%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Kaveri Seed Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kaveri Seed Company Limited engages in the research, production, processing, and marketing of hybrid seeds in India. The company operates through three segments: Seeds, Micronutrients, and Vegetables.

IndustryAgricultural Inputs

SectorBasic Materials

Employees1,477

Annual revenue₹1,392 Cr

How does it make money?

Turns over ₹1,392 Cr a year. Of every ₹100 of sales, about ₹21 reaches shareholders as profit, with ₹25 left at the operating level before interest, tax and depreciation. Each of its 1,477 employees supports ₹94.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin24.5%

Net margin21.3%

Revenue / employee₹94.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?Some evidence

ROCE of 17.0% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE17.0%

ROE16.8%

Peer median ROE22.3%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 15.1% and earnings to grow about 23.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.1%

Est. earnings growth+23.7%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +30% while net margin moved -16% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+30%

Margin effect-16%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 9.2% is steady
✗ Profit CAGR of only 2.9%
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Latest-year revenue growth of -13.5% is below the longer-term trend — momentum is fading
✗ Profit fell 14.0% in the latest year

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

60/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

15.2x

3Y Median

16.7x

40 monthly readings · mean 16.9x · range 11.4x–26.4x

Sector Median

28.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 16.7x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 47% below the peer median of 28.7x.

vs. its own history

Fair

16.7x median over 40 months · -9%

vs. sector peers

Cheap

28.7x median of 4 peers · -47%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

15.2x

P/B

1.76x

EV/EBITDA

10.8x

PEG

5.30

Dividend Yield

0.68%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 19.9% to 16.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 20.3% to 17.0% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 71% against revenue growth of 30% — stock may not be moving.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹156 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 71% against revenue up 30% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 47% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Returns on shareholder capital are falling
ROE has dropped from 19.9% to 16.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 23%✓ 24.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹156 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 7% a year✓ 9.2% CAGR
Latest reported year was -13.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4ROCE stays above 14%✓ 17.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 16.7x✓ 15.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹3,731 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.2x

Fair

Fairly valued against the generic band

P/B Ratio

1.76x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹48.01

Profitable

Profitable on a per-share basis

ROE

16.8%

Strong

Strong capital efficiency

ROCE

17.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-13.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-14.0%

Falling

Profits are shrinking

Dividend Yield

0.68%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹156 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹731

P/E (Forward)

11.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

37.8%

Good

Healthy core-business profitability

Net Margin

19.5%

Good

Strong bottom-line conversion

Current Ratio

2.14

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.11

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

722.1 / 742.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,068 Cr	₹1,146 Cr	₹1,202 Cr	₹1,392 Cr	+9.2%
EBITDA	₹255 Cr	₹290 Cr	₹296 Cr	₹341 Cr	+10.2%
EBITDA Margin	23.9%	25.3%	24.6%	24.5%	—
PAT (Net Profit)	₹272 Cr	₹299 Cr	₹281 Cr	₹296 Cr	+2.9%
EPS	₹47.89	₹54.58	₹55.1	₹56.94	+5.9%
ROE	19.9%	24.2%	18.8%	16.8%	—
ROCE	20.3%	24.9%	19.0%	17.0%	—
Total Debt	₹1 Cr	₹0 Cr	—	—	—
Free Cash Flow	₹187 Cr	₹289 Cr	₹108 Cr	-₹156 Cr	—

🟢 Revenue has grown at 9.2% a year over 3 years.

🟢 EBITDA has grown at 10.2% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 24.5% over 3 years.

🟢 PAT (Net Profit) has grown at 2.9% a year over 3 years.

🟢 EPS has grown at 5.9% a year over 3 years.

🔴 ROE has fallen from 19.9% to 16.8% over 3 years (-3.1 pts).

🔴 ROCE has fallen from 20.3% to 17.0% over 3 years (-3.3 pts).

🔴 Free Cash Flow has turned negative, from ₹187 Cr to -₹156 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,759 Cr

Total Liabilities

₹1,004 Cr

Total Debt

—

Cash & Equivalents

₹42 Cr

Operating Cash Flow

-₹6 Cr

Capex

-₹149 Cr

Shareholding (proxy)

Institutional Holding

5.4%

Insider Holding

71.7%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

12 Nov 2025

Analyst Consensus

Recommendations

2 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹985.5

+34.8% vs CMP

Target Range

₹871 – ₹1,100

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 mixed4 general

Kaveri Seed Company Share Price: fresh 52-week low analysis

Univest, 18 Sept

Kaveri Seed (NSEI:KSCL) Stock Forecast & Analyst Predictions

Simply Wall Street, 16 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

KSCL Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Volume Gainers, September 24, 2026 at 3:30 PM IST: Kaveri Seed Leads Volume Jump

HDFC Sky, 24 Sept

Kaveri Seed (KSCL.NS) Consolidates Around ₹728.5; Key Levels in Focus - Market Profile

siam.in, 08 Sept

Kaveri Seed Company Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Watch Items

Revenue growth is negative (-13.5%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟢Business QualityStrong14.3/20

🟢Financial HealthStrong13.2/20

🔴GrowthWeak8.9/20

🟢ProfitabilityStrong10.2/15

🟡ValuationFair9.3/15

🟡RiskModerate5.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 23%24.5%
✗Free cash flow remains positive-₹156 Cr
✓Revenue growth stays above 7% a year9.2% CAGR
✓ROCE stays above 14%17.0%
✓Valuation vs its own median of 16.7x15.2x today