Kaveri Seed Company: Buy For 2-3 Years Period
The prices of food and feed products are on an upward spiral, stoked by rising demand, shortfalls in output and expanding export opportunities. This has put producers of agricultural inputs such as hybrid seeds in a sweet spot.
Kaveri Seed Company, an established producer of hybrid seeds for crops such as corn (maize), sunflower and paddy, may be one of the key beneficiaries of this trend. Investors can buy the stock (Rs 270), which is currently trading at about 19 times its trailing 12-month earnings.
The nascent Indian market for hybrid seeds is set to expand strongly, given the rapid rate of hybrid adoption and buoyant produce prices. This suggests that the company may be well placed to deliver a 20 per cent-plus annual growth over the next two-three years.
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