Why Brokerages Are Upbeat on Kaveri Seed Company

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Why Brokerages Are Upbeat on Kaveri Seed Company
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- The last quarter of 2020 has seen multiple brokerages recommend a buy on mid-cap agriculture company Kaveri Seed Company Ltd (NS: KVRI ). Kaveri is India’s largest hybrid cotton seed producer with a market share of around 15%. Motilal Oswal (NS: MOFS ) has given Kaveri Seed a target price of Rs 634, an upside of almost 23% from its current share price of Rs 516.

For the quarter ended September 30, 2020, Kaveri reported sales of Rs 719.48 crore, up 14.64 % from Rs 627.58 crore in the corresponding quarter in 2019. Kaveri reported a net profit after tax of Rs 296.42 crore in the September 2020 quarter. The company saw growth in its non-cotton seeds portfolio. It's cotton seeds portfolio gained market share in Gujarat and Haryana.

ICICI Securities Ltd (NS: ICCI ) is also bullish on Kaveri with a target price of Rs 710, an increase of 37.5% from its current price.

The company has a lot of factors in its favor. It has access to 60,000 acres under seed production, with a majority of farms in south India (Karnataka and Andhra Pradesh) apart from the rest of India. Kaveri also has a network of around 15,000 distributors and retailers across the country. This is up from 11,000 in 2016.

Kaveri’s success beyond the south Indian market is chiefly responsible for brokerage recommendations.

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  • SANKARAN RAMESH @SANKARAN RAMESH
    already holding at 650
    Like 2
  • Prabhu Sundar @Prabhu Sundar
    So I can buy 1000 shares tomororw 😌
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