KSCL upgrade to BUY with PT of INR489.

**KSCL's rev up 2% to INR678m (est. INR1,261m) in 2QFY17. EBITDA stood at INR34m (est. INR14m), and margins at 34%. Adj PAT at INR77m.

**Cotton seed vol in India declined 15% YoY, but Kaveri's vol moderated by just 4% as it gained market share in states like AP and Telangana.

**KSCL headwinds now behind, majority write-offs already taken, improved outlook for cotton acreage and clarity over distribution of cash in hand through special dividend or *buyback*.

** Expect FY18 rev/PAT growth of 20.5%/25%) and FY19 to continue witnessing healthy growth pace.Upgrade to buy with PT of INR489.

*Our Take: Even MOSL report mentions about Buyback. As per our source, Kscl will announce Buyback worth Rs 100 cr or more @ 480-500 and we estimate FY17 NP at 200+cr*