The impact of Direct Seeded Rice (DSR) on profitability of farmers of Raichur and Koppal districts of Tungabhadra Command area of Karnataka, India were analyzed for the year 2014-15. Partial Budgeting technique was employed to analyze the profitability of DSR vs. Transplanting method. The study revealed that majority of the farmers had adopted DSR practice as a farmer to farmer spread of technology. The total variable costs were Rs. 37,170 per hectare in DSR, whereas Rs. 50,603/- per hectare in conventional transplanting method. The adoption of DSR has resulted in reduction in cost of cultivation by Rs.13,433/- per hectare. The net returns were Rs. 44,796/- per hectare for DSR and Rs. 25,482/- per hectare for transplanting method. Partial Budgeting technique of DSR vs transplanting method revealed that the farmers could save on various inputs like, seed, irrigation, fertilizer, human and machine labour, but had to spend more on herbicides in DSR. This may be mainly because of the severe weed problem associated with DSR. Partial budgeting technique further revealed that the adoption of DSR has resulted in an additional profit of Rs.19,315/- per hectare. From the results of the above study, it can be concluded that DSR is economically viable and highly profitable in comparison with the transplanting method

Keyword: Direct-seeded rice (DSR); Water saving; Labor saving