Shares of Kaveri Seed Company Limited, one of the major seed companies in India, continued its lower trend on Wednesday by falling over 10-percent during morning session. The stock hit a low of Rs368.80 per share as against the current price of Rs403.80-per share at the mid-market session.
Two reasons viewed for the fall. The one is Andhra Pradesh government issued a notice and revoked the license of one company and thereafter revoked licenses of another thirteen companies with relation to illegally planting of herbicide tolerant cotton seeds, as per media reports.
Further, The Company’s net profit slipped 32.8-percent to Rs3.65crore in the third-quarter FY19 as against Rs5.4crore during the corresponding quarter FY17.
At 12.00-noon, Kaveri Seed shares traded 3.94percent lower at Rs403.80 per share on the NSE whose benchmark Nifty up by 52percnet up a 10655-level. The stock has declined 30percent in the last eight trading sessions.
Furthermore, Motilal Oswal reduced FY21 cotton volume estimate by 3-percenet on account of lower visibility, resulting in an 8-percnet earnings cut for FY21. However, the brokerage firm maintained its BUY rating on the stock with a price target of Rs582-per share.