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Kaveri Seed trim losses, up 13% from day's low

Kaveri Seed trim losses, up 13% from day's low

Kaveri Seed trim losses, up 13% from day's low
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By Mousumi Paul  Feb 20, 2019 4:03:04 PM IST (Updated)

Shares of Kaveri Seed, one of the largest seed firms in the country, continued its downtrend on Wednesday by falling over 12 percent in the early trade today

Shares of Kaveri Seed, one of the largest seed firms in the country, trimmed losses to end 1.7 percent lower at Rs 413 after falling as much as 12.26 percent to Rs 368.80 per share in intraday trade on the NSE. The stock has fallen nearly 23 percent in the last 8 trading sessions.

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The stock has been under pressure after Andhra Pradesh government issued a notice and cancelled the license of one company and subsequently suspended licenses of another 13 companies with relation to illegally sowing of herbicide tolerant (HT) cotton seeds, according to various media reports.
Motilal Oswal cut FY21 cotton volume estimate by 3% due to lower visibility, resulting in an 8% earnings cut for FY21. The brokerage said, "The downside to our estimate is the non-renewal of KSCL’s license by the Andhra Pradesh government (got suspended recently for a year), which can impact FY20 revenue by 6-7%."
The brokerage, however, maintained its "buy" rating on the stock, with a price target of Rs 582 per share, saying "We, however, find comfort from the company’s reducing dependency on cotton business, with non-cotton share likely to rise up to 55% in FY21"
The company's December 2018 quarter net profit fell 32.8 percent to Rs 3.65 crore, compared to Rs 5.43 crore in the same quarter a year ago. Net Sales fell to Rs 67.18 crore in the third quarter of FY 2018-19, from Rs 70.64 crore in the year-ago quarter.
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