Mumbai: The shares of Kaveri Seed Company Limited, one of the largest seed firms in the country, fell sharply on Tuesday on poor third quarter financial performance and questions over its business practices.

Kaveri Seeds shares fell nearly 14 per cent to a low of Rs 399 in the intra-day trade before finally closing at Rs 421.45, down 9.95 per cent, from the previous close.

Kaveri Seeds’ net profit for the October-December 2018 quarter fell to Rs 3.65 crore from Rs 5.43 crore in the same quarter last year and Rs 11.94 crore in the July-September quarter.

Kaveri Seeds is the largest producer of hybrid cotton seeds in India.

Umesh Mehta, Head of Research, Samco Securities, said, "The stock of Kaveri Seeds has been continuously facing the heat for the last three trading sessions and fell as much as 13.7 per cent intra-day as it reported a weak quarter with a 33 per cent decline in its bottom line and Ebitda margin contraction of 75 basis points.”

“Additionally, as 40 per cent of Kaveri’s market share is in Andhra Pradesh, the cancellation of its licence related to the illegal sowing of herbicide-tolerant (HT) cotton seed is the major reason for the stock’s decline," Mehta said.

As illegal sowing of HT seed surfaced again, the AP government cancelled the licence of Kaveri Seeds for one year.