Shares of Kaveri Seed slumps 17% on guidance cut

MUMBAI: Shares of Kaveri Seed Company dived 17% to Rs 499.7 on Monday after the company cut its revenue guidance for 2015-2016 and made lower provision of royalty payment in the June quarter. The stock, which has fallen 34% in the last six trading days, has more than halved in the last four months partly due to the inclusion of the stock in the derivatives segment.

Motilal Oswal Financial Services said the outcome of the case between state governments and Monsanto, which owns the seed patents, would determine the royalty payment. If court ruling goes adverse, Kaveri Seeds will have to shell Rs 64 crore for which the company has not made provision, said analysts.

“The management provided for lower royalty payments, in line with prices submitted by recommended institutions to relevant states,” said Niket Shah, analyst at Motilal Oswal Financial Services.