Kaveri Seeds has reported a decline in net sales and profit in the first quarter ended June 30, 2021, dragged by lower volumes and revenue in the cottonseed segment.

While the pandemic had disrupted the supply-chain network, steep increase in herbicide tolerant Bt cottonseed contributed to lower volumes in the cottonseed segment.

The firm reported net sales of ₹629.78 crore in the quarter against ₹719.48 crore in the comparable quarter last year, a decline of 12.47 per cent.

The net profit declined to ₹204.73 crore in the quarter as against ₹296.41 crore in the comparable quarter last year, showing a decline of 31 per cent.

“The volumes and revenues in the cotton segment are down by about 28 per cent. Though we gained in the cottonseed market, we were impacted in Andhra Pradesh, Telangana and Karnataka,” the company said in statement.

“It has been a challenging quarter primarily due to the second wave. Sales of hybrid seeds across the industry and cotton in particular were impacted. Acreages of cotton were significantly lower than previous year, decline in sales of branded seeds even more steep,” GV Bhaskar Rao, Chairman and Managing Director of Kaveri Seeds, said.

“Use of HTBT (herbicide tolerant seeds) further impacted branded sales,” he said.

Quoting estimates, he pegged the total area under HTBT at 15 per cent of all the cotton acreage in the country.

The company said the pandemic had disrupted supply chains, resulting in lower absorption of cotton hybrids by dealers and distributors. This, in turn, resulted in farmers not getting enough supplies. “In the absence of cottonseed supplies, farmers reluctantly looked at other options and even shifted to other crops,” the company explained.

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