Kaveri Seed extends losses on poor results, state licence suspension

(Reuters) - Kaveri Seed Co Ltd's shares extended falls into a fifth session on Wednesday, shedding as much as 12.3 percent to a 27-month low.

The stock had lost almost 18 percent of its value, as of last close, after the seed company posted a near 33 percent drop in third-quarter profit on Feb. 14, hurt by higher expenses, and named a new chief financial officer.

Earlier, the Hindu Business Line newspaper had reported https://bit.ly/2ShmcVG that the southern state of Andhra Pradesh suspended the company's licence over "illegal sowing of herbicide tolerant (HT) cotton seeds".

"There is a long-drawn litigation process about the revoking of licence, it will affect their performance," said Umesh Mehta, head of research at Mumbai-based Samco Securities Ltd.

 

"There are fears that other states might follow suit and cotton (seed) sales could be heavily impacted"

Secunderabad, Telangana-based Kaveri Seed was not immediately available for comments.

Kaveri Seed's shares fell to a low of 368.80 rupees and were down 4.5 percent at 401.5 rupees, as of 0752GMT, in high-volume trade. Nearly 18.6 million shares had changed hands by 0752 GMT, 18.2 times their 30-day average.

(Reporting by Chandini Monnappa in Bengaluru; Editing by Subhranshu Sahu)