Cupid is now available both on flipkart as well as amazon india, and boy look at the price !!
http://www.amazon.in/Cupid-Natural-Lubricated-Female-condoms/dp/B00QK3SLIY
And I thought it has to sell at 0.5 USD!!
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Dear @RajeevJ ,
I had a few questions for you (in case you have any of this information.
- They have a capacity of 400mn and 25mn male and female condoms right. This recent Rs100cr order from South Africa is for how many condoms? Was basically trying to figure out capacity utilization in both male and female condoms and if there are any constraints?
- They used to have a subsidiary Cupid Medical Research Centre. What was that company doing and why have operations stopped in that company?
- There is another company called Cupid Rubbers. Is it related to Cupid Limited.
Hi Venkatesh,
The announcement for the 103 Crs South African order does not mention the qty in numbers. However, Attaching a report on Cupid dated November 2014, which spells out that capacity is not an issue. As mentioned earlier, the mgt also has the option of converting it’s male condom facility into female condom at a nominal cost.
Cupid Medical Research Centre never really took off & I think it’s lying dormant or so it seems.
Cupid was earlier known as Cupid Condoms. It’s the same Co.
The Cupid female condom is pre approved by both the UNFPA as well as WHO. It is still to get the approval of USFDA. However, it does find a mention on the USFDA website. Link attached.
http://www.fda.gov/downloads/MedicalDevices/NewsEvents/WorkshopsConferences/UCM359084.pdf
Cupid Report.pdf (426.9 KB)
See how funny the situation is…
We have one of the world best condom manufacturing plant in Nashik still govt is claiming shortage of condoms in Nashik during kumbh.
This is a good read on Cupid’s direct competition in FC space - Female Health Company, manufacturer of FC2.
Given the emphasis of FHC on direct sales & marketing in US, probably it’s an admission that the tender based business space is getting competitive for them, and it’s no longer possible to win good tender business where emphasis is on cost. Both Cupid & FC2 are the only 2 pre-qualified WHO & UNFPA FC providers.
Recent tender owned by Cupid from South Africa is at 40 cents per piece where as FCH’s average sales price been 57 cents, so a ~30% cost difference probably is too much to handle for FCH ?
FCH cost of production is only 26 cents due to factory being in Malayisa.
FCH sales volume in FY14 was 42.5 million.
Cupid’s recent order is probably for 4 million (16.28 million/40 cents) pieces to be delivered in 3 years, roughly 1.3 million per year.
Point is, Cupid is still small and just starting to nibble market share from FCH.
Find it quite interesting that Cupid could think of launching it’s FC on ecom sites at almost double the price (50 rs) of it’s international tender business. That’s quite an ambitious pricing strategy from Cupid ?
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Good points Raja.Also whats the status of Cupd tieup with Safeworks?any hopes on that front.What abt corp governance issues>How ethical is the promoter?
one of the biggest risks that is there in the company is the lack of clarity on the succession planning. The chairman himself is in 70s and is the main main. What in case - God forbid, something happens to him? The company is very good but that is the only risk associated with the company so far.
Disc: Invested
I am worried about the succession planning as well. A Business Standard article on the company’s website mentions that things started looking up from 2008 onwards when the Chairman came back to India and took over the reigns. Till then it was being run by professional management. At 71, partially blind, discussing a 10 year growth trajectory seems ambitious.
Dear Rajeev, apart from the nephew, are there any sons / daughters interested in the running of the business? In the absence of that, I believe it would more likely become a ripe takeover / merger target for someone like Ajay Piramal.
Hi Vsarda,
I don’t see the promoters son / daughters coming to India to run the Co. However, the promoter’s wife Ms. Veena Garg is more than fully involved in all affairs of the Co. She has also recently joined the board. As I mentioned earlier, the CMD sees the world through her eyes. Incidentally, he was as much partially blind in 2008 when he took over the Co. as he is now.
I feel that the game plan is first to scale up the operations over the next 2-3 years, & then to sell out. This to me seems the most likely outcome going forward. It’s not unusual to get a 15-18 times EBITDA for a Co. like Cupid, given it’s return ratios. The EBITDA for 14-15 is 13.53 Crs. Given the change in the product mix, this could double over the next couple of years. Meanwhile, the challenge is to stay put during this time & not sell out with relatively small gains. The gains are maximum when we exit along with the promoters. Recent examples that come to mind are Mayur Uniquoters where the promoters reduced their stake after scaling up. Another instance was when Mr. Vijay Kedia sold his stake in Atul Auto.
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Some more news which might indirectly help cupid!
Thanks for your inputs.
Hi Rajeev
I ordered a pair of cupid female condoms from flipkart
sharing the pictures of the product in the link below .
- 200/- for 2 packets containing 2 condoms each so one condom is of 50/-
- packaging was good enough as per the best brands in the industry.
- they had also given a set of disposable bags which you can see in pic 1
- product description and usage directions are elaborate .
The product tells that the company is following good quality standards, they are strong in product conceptualization and production.
i found that this product can compete with the best in the world.
Disclosure : Invested
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Are the results out???
Results are out…very good results… these are without execution of recent 100cr order. This 100cr order will start from Q2
The result is too good considering the fact that execution of the recent order is not included in the result. If 10% of the recent 100cr. order is executed in Q2, it will double the topline as well as bottomline. Looks like a promising bet, but we need to keep our eyes on order flows. They said in last year Chairman’s speech that they are persuing various large orders. (I am invested)
Sorry, but where does it say that this doesn’t include the SA govt order?
The order came on June 24, 2015 and execution will start only from July 1, 2015 hence the interpretation that this does not include any contribution from the Rs100cr order
Hold on your horses dear friends,the total order was for 54mn units to be executed over a period of 3 years,15mn in the first,18mn in the second and 21mn in the third. 80% of order is awarded to Cupid and the rest to FHC. Do the math.
FHC executed 50% of last time’s order and Cupid was also awarded some portion along with other players.
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Cupid came out with a great set of numbers for the June Qtr. (Q1), with it’s highest ever EBIT of 4.45 Crs & PAT of 3.01 Crs, after providing for taxes to the tune of 1.39 Crs. . As mentioned in my post of June 27, the profits have grown disproportionately to Sales due to change in the product mix being skewed towards female condoms (60%). I see this % only going up due to much higher profits in the segment. Going by Q1, the Co. could do Sales, EBIT & PAT of about 60 Crs, 18 Crs & 12.25 Crs., giving an EPS of abt Rs. 11, for the full year 15-16, with the ROCE of well over 50% for the year.
The Co. came out with an investor update along with Q1 results, which gave decent insights into the prospects & scope going forward. Attaching the link to the presentation:
It is interesting to note that the big boys have only now started looking at Cupid. There is a strong buzz here in Mumbai that a few institutional investors are showing a keen interest in the counter. I expect a couple of them to come on board over the next few qtrs.
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Hi @RajeevJ,
Thanks for the input. What’s the orderbook as it stands today to be completed in what time period?