Stock To Buy: Small Cap Agri Stock That Reported Solid Results And Is Debt Free

Markets once again were exceedingly volatile thanks to the Monetary Policy and surging bond yields in the US. However, as the earnings season pan out, there are some stocks that have reported good quarterly numbers. Here is one small cap stock to buy that has reported good numbers and is debt free.

Why to buy this small cap stock called Kaveri Seed Company?

There are a number of reasons to buy the stock of Kaveri Seed Company. The first is that the company reported a superb set of quarterly results for the period ending Dec 31, 2021. The second is that the huge outlay and boost to the agricultural sector through government outlays is likely to directly benefit the company. The government last year had announced plans to double farmer income, which should go a long-way in boosting the revenue of Kaveri Seed. 

 

Lastly, the debt free status of Kaveri Seed Company makes it an interesting stock to buy.

Good quarterly numbers from the company

Kaveri Seed Company is India's largest agriculture company specializing in Hybrid Seeds in key Indian crops. The company provides seeds across vegetable and field crops. The company reported extremely good quarterly numbers for the third quarter.

Kaveri Seed Company Limited reported revenue was at Rs 102.08 crore for the quarter ending Dec 31, 2021; up by 2.01%. The EBITDA was placed at Rs 16.32 crore; up by 8.22%, while the net profits surged a whopping 21.88 to Rs 9.08 crore. The contribution from the Non-Cotton segment for 9M FY22 has grown to 62% from 53% in the last year. The Hybrid Rice volumes increased by 22.38% in 9MFY22.

Contribution from hybrid and selection rice improves

The contribution from non-cotton segment in 9MFY22 has increased to 62% from 53% in 9MFY21. The company has witnessed significant growth in both revenue and volumes from hybrid and selection rice and vegetable segments.

Contribution from new products across seed segments are stable during the year, this should move upwards during the next year, this is the biggest driver for the organization"

As a part of rewarding its shareholders, Kevari Seed has completed a buyback of shares worth Rs. 119.95 crore during the quarter.

For the nine-months ending Dec 31, 2021, the company reported an EPS of Rs 37.44 and is on track to do an EPS of Rs 50 at least. The stock is trading at Rs 540, thus discounting the shares 10 times. This makes it a good p/e to buy the stock at. 

 

Be cautious when investing

Please note, that the author and Greynium Information Technologies would not be held responsible for losses incurred based on the above article. Investing in equities is risky and the entire risk has to be borne by the investor.

About the author

Sunil Fernandes is the Managing Editor for goodreturns.in. He has 27 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His expertise remains in stocks, mutual funds, gold and tax planning.