The example was to just explain that if there is no end-user acceptance, there is no growth even for B2B company.
To come to condom point, you can historically check that during 1970-1980s Indian government authorities freely distributed condoms to curb population. But there was very slow accepatance (since sex was taboo back then and still there in some pockets)…the population growth did not change much during this times (so either they did not take condoms from authorities or they just did not use it after taking!!)
The point to make is even if its condom, if there is slow social acceptance, people will still stick with male condoms instead of using female condoms. So if the acceptance is slow, eventually it will lead to lower growth for Cupid and hence it probably makes it over-valued if market pays high multiple vs. growth.
And even if there is one-off order like Brazil, it will turn to be temporary if people dont use it (eventually there will not be any repeat order by authorities).
There is difference between free vaccine distribution and free condom distribution IMHO
I took a quick look at the annual report but I could not figure out the percentage of revenue coming from male and female condoms.
The export sales were high in 2015 I am assuming was because of one export order.
I see many people in this thread talking about female condoms but have you guys talked to your wives/gf/friends about whether they are comfortable wearing a female condom.
All of my Indian female friends had no idea what a female condom is and couple of European girls told me that they are not comfortable using female condoms.
So who is the target market for such condoms, African females?
Europeans & Americans use a female condom made by FHC an American company which is brittle & costly. Cupid female condoms are better in quality, not brittle. So far they are for South Africans governments( donor based). In male condoms, there is too much competition & nobody is making money in India. So far Cupid is not marketing male condoms as it is not profitable. Females want protection & males often don’t. Female condom is hidden & gives good protection from both pregnancy & sexually transmitted diseases like Aids etc. Main target of the donors is to prevent AIDS & population rise. I am a doctor & last 35 years I have seen the rise of use of male condoms. Female condoms so far not well advertised in India. Last government didn’t show any interest in female condoms. In due course of time females will like it as they will be not dependent on the behaviour of males.
I also saw this in the annual report " Later on main object of Company have been appended with
obligatory permissions to entered into Diamonds, Gold, Silver and other allied precious products international or domestic trading/manufacturing/connected business segments."
Why does the company want to enter into Diamond, gold trading?
@Himanshu_5093 I totally agree with this point. Diversification into an un-related business is what worries me. When they said CUPID will get into lubrication gels, it was the diversification in its existing forte.
Trading gold, diamond, silver and other allied product is just a stupid move. There are already tons of companies into precious metals trading and only a few of them are in good health financially. It’s nothing more than commodity there is no engineering no art.
@RajeevJ could you please clarify with management why it wants to get into trading of gold, diamond and silver?
typically move a resolution in shareholder meetings to include quite a few unrelated business - it has been a practice; while best to be prudent and ask the management - there should not be any panic buttons pressed.
A female condom produced by a Chinese company has been prequalified as safe and effective by the World Health Organization and the United Nations Population Fund, allowing it to be widely distributed to the public.
The Woman’s Condom, known in China as O’lavie, was jointly developed by the Program for Appropriate Technology in Health, known as PATH, the Conrad N. Hilton Foundation, and local research partners through a user-centered process across four countries.
It’s a given that as time goes by, more players will enter & get the approvals from WHO & other organisations. The bet here is that with new players coming in, the size of the market itself will get bigger as the current user base is very small & the product itself is gradually finding acceptance.
Meanwhile, the company has announced a second interim dividend of Rs. 2 taking the total div pay out so far to Rs. 3 for the year. I was expecting a higher dividend as this was the last opportunity for the promoters to not have to pay the additional 10% tax on dividend recd. The mgt., as is typical of it, perhaps felt it prudent & in the larger interests of the Co. to conserve resources. Perhaps some kind of expansion is in the offing!
Cupid Ltd has informed BSE that a non-exclusive long term agreement (LTA) has been awarded to Company for manufacture and supply of Cupid Female Condoms to UNFPA for a period of 3 years.
This is very good news. AS far as my understanding goes, there’s no order awarded yet, but the orders would soon start coming in after competitive bidding. What it does for the company is that it opens another big channel of potential orders.
“Cupid Ltd has informed BSE that a non-exclusive long term agreement (LTA) has been awarded to Company for manufacture and supply of Cupid Female Condoms to UNFPA for a period of 3 years.” - commenting on this press release.
(So Cupid was already part of the LTA with Unfpa and this recent LTA news is not something new. Possibly a case of renewal.)
To understand some #s on unfpa’s FC procurement - they spent $ 8.2 mn to procure 14.8 mn pieces of FC condoms (~55 cents/piece) in 2014. - Refer to the deck attached by Rajeevji for more details
Unknowns -
3. As of now we do not know if any other player has also got LTA approved with Unfpa
4. It is also likely that Cupid might get a higher share of Unfpa business going forward. (I m not very sure of the existing distribution b/w cupid & fch)
, no issues about that
