CASE STUDY

A Study on Strategic Insights and Performance Analysis of Seed

Industry and Kaveri Seeds

As a Business Analyst intern at KRG STRATEGY CONSULTANTS PRIVATE LIMITED I perform

evaluation of Kaveri Seed and JK Agri Genetics Ltd, aimed at aiding investment decisions in
their stocks. The assessment encompasses various aspects including economic and sector
analysis, company analysis, fundamental examination, qualitative and quantitative reviews,
ratio investigation, comparative scrutiny, and common size assessment. The goal is to gauge
the financial stability, growth prospects, and overall appeal of these seed sector firms as
potential investment opportunities.

MY DAILY WORK INCLUDE

To assess the financial stability, growth potential, and overall investment appeal of Kaveri
Seed and JK Agri Genetics Ltd., two leading seed companies in India. The evaluation
encompasses a thorough examination of the companies' economic and sector
environment, financial performance, fundamental analysis, qualitative and quantitative
assessments, comparative scrutiny, and common size analysis.

1. Preparing Minutes of meeting

2. Gather and analyse data
3. Document business requirements
4. Develop process models and workflows
5. Support business analysis projects3
6. Conduct market research and analysis
The Analysis involved the following steps:

1. Conducting an economic analysis of the agricultural sector in India.

2. Analysing the financial performance of Kaveri Seed and JK Agri Genetics Ltd.
3. Conducting a fundamental analysis of the two companies.
4. Using ratio analysis, comparative analysis, and common size analysis to compare the two
companies.
 STRATEGIES USED IN ANALYSIS

1. Economic and Sector Analysis: Evaluating the overall economic scenario in India, with a
focus on the agricultural sector. Assessing the seed industry's growth prospects and key
factors influencing its performance.
2. Company Analysis: Conducting a detailed analysis of Kaveri Seed and JK Agri Genetics
Ltd., covering their history, business operations, market position, and competitive landscape.
Examining the financial performance of both companies, including their revenue
growth, profitability, and financial stability indicators.
3. Fundamental Examination: Evaluating the intrinsic value of Kaveri Seed and JK Agri
Genetics Ltd. using fundamental analysis techniques.
4. Qualitative and Quantitative Reviews: Conducting qualitative analyses to understand the
companies' management strategies, competitive advantages, and risk factors. Employing
quantitative techniques, including ratio analysis, comparative analysis, and common size
analysis, to compare the financial performance and position of the two companies.
5. Comparative Scrutiny: Comparing and contrasting the various aspects of Kaveri Seed
and

TOOLS USED

1. EXCEL
2. PYTHON
3. POWER BI

DATA GATHERED FROM

1. COMPANY WEBSITE
2. NSE & BSE
3. STOCK BROKING PLATFORM
4. SECONDARY DATA
 ANALYSIS

INSIGHTS

1. Based on the above figure we can see that Kaveri Seeds has a higher dividend
payout ratio than JK Agri Genetics Ltd., which means that the company is
returning more of its profits to shareholders in the form of dividends. This is a
good sign for investors, as it shows that the company is profitable and can
generate enough cash to pay dividends.
 2. Kaveri Seeds has been increasing its dividend payout ratio over time, which is
another positive sign. This shows that the company is committed to returning
value to shareholders.
3. JK Agri Genetics Ltd. also has a dividend payout ratio that is above the industry
average. However, the company's dividend payout ratio has been decreasing over
time, which is a negative sign. This could be a sign that the company is not
generating enough cash to pay dividends, or that the company is using its cash for
other purposes, such as investing in growth.

As we can see that the overall trend of the Kaveri seeds is upward, indicating that the
company's revenue is increasing.
1 Annual Revenue rose 11.3% in the last year to Rs 1,125.6 Crores. Its
sector's average revenue growth for the last fiscal year was 21.9%.
2 Reason for growth:
• The growing demand for seeds in India due to rapidly growing
population. Government support, crop rotation.
Also, the revenue of JK Agri genetics ltd seems to be declining in 2023.
1 Annual Revenue fell 18.6% in the last year to Rs 203.5 Crores. Its sector's average
revenue growth for the last fiscal year was 21.9%
2 Quarterly Revenue fell 31.5% YoY to Rs 80.9 Crores. Its sector's average revenue
growth YoY for the quarter was 7.2%.
 FINDINGS
Kaveri Seeds has a self-sustainable growth rate (SSGR) of 50-70%, which is indicated by the
increasing fixed asset turnover ratio and net profit margins over recent years. However, SSGR
does not factor in working capital changes.
If Kaveri Seeds can manage its working capital management and operating eficiency
properly, it can grow continuously at about 50-70% without creating additional debt burden
on the balance sheet.
Kaveri Seeds has been growing at a rate of 40-45% without leveraging its balance sheet,
despite some of its funds getting stuck in inventory. This is because the company is a debt
free company. In other words, Kaveri Seeds has the potential to grow much faster than it is
currently growing, but it needs to improve its working capital management to achieve this.

1. The findings of the project showed that both Kaveri Seed and JK Agri Genetics Ltd. are
well-established companies with strong financial performance. However, Kaveri Seed
has a higher return on equity (ROE) and debt-to-equity ratio (D/E) than JK Agri Genetics
Ltd. This suggests that Kaveri Seed is a more financially conservative.
2. I also found that Kaveri Seed has a higher market capitalization than JK Agri Genetics Ltd.
This suggests that Kaveri Seed is a more popular investment among investors.
3. Overall, the findings of the project suggest that Kaveri Seed is a more attractive
investment than JK Agri Genetics Ltd. However, investors should carefully consider their
own investment goals and risk tolerance before deciding.

USEFUL INSIGHTS

After analysing the financial statements of Kaveri Seeds Ltd. and JK Agri Genetics Ltd., Kaveri
Seeds Ltd. is a better investment than JK Agri Genetics Ltd. Kaveri Seeds Ltd. has a stronger
performance, solvency, and profitability profile, and its financial statements are more
transparent and easier to understand.
Kaveri Seeds Ltd. has consistently outperformed JK Agri Genetics Ltd. in terms of revenue
growth, profit growth, and return on equity. The company also has a stronger solvency
position, with a higher current ratio and debt-to-equity ratio. Kaveri Seeds Ltd. is also more
profitable, with a higher net profit margin and return on equity.
The financial statements of Kaveri Seeds Ltd. are more transparent and easier to understand
than the financial statements of JK Agri Genetics Ltd. This makes it easier for investors to
assess the company's financial health and make informed investment decisions.