@RajeevJ mentioned in this article
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Nice., Rajeev ji.
Good to have you on the forum.
& Thanks, Venkatesh, for sharing the link.
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Cupid today announced a concall on May 12, post the results on 11th. This is the first ever concall that the Co. has undertaken. Going by the business momentum, it promises to be the best ever qtr. The stock however continues to grind lower. Perhaps a legacy of the trading suspension carried out by BSE in April, resulting in the weaker hands getting out.
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@RajeevJ Raw material, ie rubber prices have been going up quite a bit. How do you think that would play out for Cupid?
Rajeev, do you have link of concall?
Here you go…
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Sorry to ask about an old post; but am just reading through the thread. In the video he quotes condom market specifically growing at 17-19% or so; however the forecast numbers I could find online are substantially lower (8-9%); e.g. http://www.prnewswire.com/news-releases/global-condom-market-2015-2019-300167528.html
Any views on this?
Essentially, there are just 2 female condom players. So if one sees the volume growth of the dominant player ‘FHC’ which had a monopoly until Cupid got the approval in 2012, one can arrive at the industry growth numbers. Last 5 year vol growth is 10% for FHC (61mn in Y.E.Sep 2015). Agreed that longevity and growth seems low, however the gains for Cupid would be via market share from FHC and hence Cupid’ volumes could grow at a faster rate. (Cupid would do vols of 15mn in FY16E)
Have lost track of the company after it crossed 400 as it seemed fully valued then.
Key monitorables would be (1) Of course whether the company bags any new sizeable order which would prolong the visibility beyond FY18, and (2) I recall 1 or 2 new companies have recently been given the WHO/UNFPA approval for FC. So this should increase competition for Cupid.
Cupid Limited announces FY16 Financial Results
FY16 Net Revenues at Rs. 628.05 million up by 39%, PAT at Rs. 159.33 million
May 11,2016: Cupid Limited (BSE: 530843), one of India’s leading manufacturer of quality male and female condoms today announced its financial results for the fourth quarter and full year ended 31st March, 2016.
Financial Performance
FY16 review (April 1st,2015 to March 31st, 2016)
§ Total Operating income was Rs.628.05 million(mn) for FY16 as compared to Rs. 451.42 mn in the previous financial year, an increase of 39%
§ EBITDA stood at Rs.269.74 mn as compared to Rs.135.34 mn during previous financial year, up by 99%
§ EBITDA Margin at 42.9% for FY16 as against 30.0% in FY15
§ Net profit stood at Rs.159.33 mn for FY16 as compared to Rs.77.08 mn in the previous financial year, an increase of 107%
§ Basic EPS stood at Rs.14.33 as against Rs. 6.93, in the previous financial year.
§ Collective Dividend of Rs. 3/- per equity share (having face value of Rs. 10/-) was approved by board in Oct 2015 and March 2016. The Payments of 1st interim dividend of Re. 1/- per equity shares and 2nd interim dividend of Rs. 2/- per equity shares have been credited to shareholders.
Q4FY16 Review (January 1st,2016 to March 31st, 2016)
§ Total Operating income was Rs.182.47 mn for Q4FY16 as compared to Rs.130.55 mn in the corresponding period of the previous year reflecting an increase of 40%
§ EBITDA stood at Rs.88.45 mn as compared to Rs.40.03 mn during the corresponding period of previous year, an increase of 121%
§ EBITDA Margin at 48.5% for Q4FY16 as against 30.7% in Q4FY15
§ Net profit stood at Rs.46.15 mn for Q4FY16 as compared to Rs.12.74 mn in the corresponding period of the previous year, an increase of 262%
§ Basic EPS stood at Rs. 4.15 as against Rs.1.15 in the corresponding quarter of last fiscal
Management Comments
Commenting on the Company’s performance for FY2016, Mr. Om Garg, CMD said “We had a fairly decent fiscal with close to 40% in the revenues over the previous year. Operationally, Fiscal 2016 had also been a good year for the company as our order book increased over the previous year and we also improved the utilization levels at our facility. We also received multiple repeat orders thereby demonstrating our commitment to quality and acceptance by the customers. As we move forward to the new fiscal, we foresee robust demand in the industry and this gives us confidence in our business and strategy.”
Business Highlights of FY16 and Outlook
Year in Review
§ Out of Rs.611.46 mn of sales revenue, the male condoms contributed close to 51% while the remaining sales came from our female condoms category. The Female Condom business of our company had a robust 25% share in the Ex-South African territory as compared to 8% in the previous fiscal
§ The increase in sales was largely on account of sales in new territories as well as uptick in the revenue from our contract manufacturing business. The contract manufacturing sales contributed close to 20% in the overall revenues.
§ Signed a non-exclusive long term agreement with United Nations Population Fund(UNFPA)for supplying female condoms over the next 3 years. In addition, the company had also received order worth USD 16.3 mn (INR ~1032.2 mn equivalent) for female condoms from National department of Health(NDOH), South Africa during last financial year. The execution from this agreement is already underway and will complete through fiscal 2018-19.
§ On the operational side, the company successfully upgraded its testing and sealing facility as to improve productivity and maintain standards of quality.
§ Capacity utilization went up from 52% in the FY15 to 64% in this fiscal.
§ Received approval from Maharashtra FDA to manufacture and market water based lubricants. The facility is ready to generate sales in the fiscal 2017.(new order)
Outlook
The global market for the contraceptives continues to expand on the back of rising focus on STDs, government and international organization’s increasing penetration of education programs, prevention of unintended pregnancy and prevention of HIV and other diseases etc. It is estimated that the global market for male condoms would touch USD 9.3 bn by the year 2020(Source: Global Industry Analyst Inc.). While the male condoms market would demonstrate a growth from annual 27bn units to 42bn units, the female condom market would also expand from the current annual 100 mn units to about 340mn units by 2020. (Source: PSI Inc., a Washington DC based NGO).
We would continue to add focus on women health and wellness areas and we believe that the market has enough opportunities for resourceful business players like Cupid for growth and expansion. Given our marketing strategy, strong commitment to quality, research and efficiencies in manufacturing, we believe we have the right kind of drivers for a sustainable growth in the years to come. As on 31st March, 2016, our order book stands at INR 125 mn while we also anticipate new orders to be booked as per the non-exclusive long term agreements which we have already signed with multiple agencies.
In terms of operations, we envisage final results from UNFPA on the prequalification of our Cupid 2 Female Condoms which is economical and smaller in size. The results of this inspection/prequalification is expected by the mid of FY17.Besides this, we are also set for sales and production of our water based lubricant jelly and we are hopeful of its acceptance in the market. These launches coupled with uptick in the sales of our current products, we are targeting to improve our capacity levels meaningfully.
Q4FY16 Earnings Call
The company will conduct a 45 minutes Earnings call at 5:00 PM IST on Thursday, May 12,2016 where Mr. Om Garg(CMD) will discuss the company’s performance and answer questions from participants. To participate in this conference call, please dial the numbers provided below ten minutes ahead of the scheduled start time. The dial-in number for this call is +91 22 6746 4144/+91 22 3960 0644. Other numbers are listed in the conference call invite which is posted on the company website www.cupidltd.in. Please note that the transcript of the conference call will also be uploaded on the company website in due course.
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/CC966727_596F_4BC8_8652_C394E1A65E91_184529.pdf
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/793AAA14_CB2C_44FC_9975_0C249F41E80D_183221.pdf
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Thanks Rakesh for posting the annual results & the future outlook.
Excellent set of numbers.
Looking forward to the concall tomorrow.
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Let us wait for the concall to know the finer details but at the face of it, these are fabulous numbers. I was mentally factoring in about 30% in top line but this 39% beat that by a biggie…and same is the case with Netprofit…107% is simply awesome (This year Sept qtr was good too but that was at a lower base)
I must say that from the beginning, the kind of leadership and promptness @ the appropriate time, when the chips were down (example, BSE trade ban) by @RajeevJ was commendable as well.
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I am very pleased to see Cupid’s Investor Presentation. Glad to see this transformation.
Cupid has come up with excellent results. And Order pipeline also looks good( with new Maharashtra lubricant order). Also Co is hopeful about cupid 2 approval by Mid Fy2017.
This 2% circuit by BSE will halt cupid to attain its fair valuation. NSE listing will have significant importance now.
Here are few slides from investor presentation.
Cupid_Investor_Presentation.pdf (1.5 MB)
Disc- Invested from lower levels
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Guys, I couldn’t attend conf call due to sickness.
If anyone has summary of the discussions, kindly update. ’
Mar’16 Results Call Notes
Far Big Picture
- Overall market increasing at rate of over 9%. UN is planning for procuring/disbursing(?) 339 mns pieces of female condoms by 2020 from 100 mn (this year).
- SA has allocated more budget for HIV prevention and hence expect more orders.
- Increased the share of female condom from non-African countries to 25%.
- Govt of India has floated tenders after 3 year for male condoms, hoping there will be tender for female condoms in future.
- Also started targeting CIS and south american markets for female condoms. But primary market still is south africa and neighboring countries for female condoms.
Near Big Future
- Current product mix is : 51%-male:49%-female. Target minimum of 70% female condom in FY18. Male condom ebitda margins is 15%, female is 55%.
- Lubricant jelly - Got approval from MH FDA to sell water based lubricant jelly. Expect to start production and sell in FY17. Unit price will be about Rs. 1.2/- for 4 ml sachet. Expect sale of 4-5 cr. next year EBITDA margins are about 30%
- Developed a new version of female condom called Cupid2, smaller in size and more affordable
- Current domestic demand for female condom is mostly from commercial sex worker and teenagers for casual sex.
- South African orders is for 104 cr. over 3 years i.e. by june 2018. Delivered 20 cr. worth order this year. Also expecting additional orders.
- Geared to maintain and hopefully improve EBITDA margins, depending on international funding availability and input cost price movement, as you know commodity cost has started to go up recently
- Have confirmed order of about 12.7 cr. , additional order of 52 cr. which is repeat order coming from customer from which have signed agreements.
- Facilities were audited last year and results will be available by this year mid.
Company Operation Level
- Last year produced 12 mn female condoms, 180 mn male condoms. Planning to move male condom production up to 210 mn in FY17.
- Planning to increase female condom capacity from 20 mn to 40 mn pieces this year at capital expense of less than 5 cr.
- Average price of male condom is Rs. 1.70/- per piece. average price for female condom Rs. 25/- a piece.
- Use of Cash, plan a board meeting
. Planning to introduce one more products in female wellness area. - R&D budget is about 2 cr. same people work in production also. About 5 ppl in R&D. Total of 100 employee: 30 company workers.Capex plan - 2-4 cr. last year capex was 2 cr.
. Planning to introduce one more products in female wellness area.
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Thanks @rajpanda
Two points worth adding from the Concall :
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Cupid-2 was being developed keeping Asian women in mind. So, this might open new market / avenues for the company. Hence, Cupid-2 will be an addition., & not a substitute to Cupid-1
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The Chairman acknowledged that it will be a challenge to sustain the existing margins for the future., & the R&D team were gearing up for further value addition to the products., in order to maintain margins.
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Good gesture by Mr garg for arranging con call & preparing investor presentations first time post that BSE trading suspension fiasco.
For company with MCAP below $100 mn, con call participations by few institutions encourage us to have faith in management.
Disclosure: Invested with 2nd top holding in my PF.
Did anyone ask Mr. Garg the revenue targets he has for FY17?
Some additions Concall details:
In FY 18 post expansion of female condom capacity to 40 mn pcs from current 20 mn (approx. 18 months from now) at capex of 5 cr, they will rebalance product mix at 60% female and 40% male
Latex is 40% of the cost. According to Mr. Garg Cupid navigates the ups and downs in latex cost efficiently and work with a weighted average annual price when costing their product. Some contracts have force majeure clause to cover extreme spikes for input cost.
Margins for female condoms at 60 % to 65% when offered packed and 55% for bulk. Hence average margin for female condoms higher.
Water Based Lubricant Jelly - Target market will be for export. Price per sachet will be 1.30 Rs. with 30% EBITDA, and working on some additional versions where sales price can be much higher at 2.00 Rs. per sachet with far better margins. Target topline of 5 to 6 cr for this year from this product. Sounds optimistic about growth prospects for this range of products.
Looking at adding additional products to portfolio as well as open to acquiring brands / company.
Cupid Female condom incorporates a fundamentally different design using medical grade foam at periphery which offers greater comfort and longer activity period. Field data used from 300 couples study to develop design.
Failure rate of female condoms is the same as male condoms - @ 3%.
5 employees work for R&D (not dedicated, also engaged in production). Budget for R&D 2 crores for next year. Total employee Count 100.
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Any thoughts on working capital and CFO generation given the govt receivables nature of business? Thanks