Quarterly results are due and there is no doubt that Cupid will come out with a set of another impressive numbers again. However the NSE listing has still not happened and the 2% filter on BSE is suffocating the stock!
Why is BSE still insistent on the 2% filter?! Actually I guess the bigger question is why is NSE taking so long to list it on their exchange
I hope Mr. Garg addresses these questions in the quarterly con-call. After Aniket’s update my conviction in the business is reinforced.
Hi Aniket,
Did you discuss about NSE listing with Mr. Garg during your meeting?
Thanks.
No I didnt Vivek.
Regards!
http://allafrica.com/stories/201604191223.html - Highlights HLL Lifecare`s involvement in the case
Would this be positive for cupid.?
Cupid Concall announced…
Thursday, 14 July - 4:00 P.M.
I will dial-in. Here are the contact details:
The last time there was a rule for one question for individual which meant that a followup call was required to pursue open queries.
It would be nice if we could create a pool of follow through questions and the same can be divided between investors. The current open queries are as follows:
More clarity on registration of Cupid in different countries / organisations. Which are the countries / organisations contributing significant sales for FHC where Cupid are currently absent. What kind of costs are involved with registration or qualification and how long does it typically take to start business post application for registration. What is the roadmap for new registrations and how aggressively does Cupid intend to file in these current monopolistic situations.
@RajeevJ query w.r.t. Cupid2 - What is the size of opportunity? Is there a cost advantage producing Cupid2? Is Cupid2 targeted at specific geographies or will it be offered as an optional to all?
@vivida05 query related to NSE listing timeframe.
@mahe9703 HLL Lifecares Ethiopia debacle update - How does Cupid view this development. Will this be negative only for HLL Lifecare or will there be some rub off impact on a fellow Indian producer like Cupid when approaching existing customers / new business? OR - To the contrary, is there any possible advantage to Cupid from the setback to the local competitor?
Update on C.E.O. search.
Would welcome further inputs, addint to the list of queries. Also, would be good to know which fellow investors intend to dial-in to the concall, it would be great if we could distribute the open questions between fellow boarders.
With best regards,
Aniket.
Q1FY17 Net Revenues at Rs. 162.42 million up by 27% , PAT at Rs. 38.34 million
Financial Performance
Q1FY17 Review (April 1st, 2016 to June 30th, 2016)
§ Total Operating income was Rs. 162.42 million (mn)for Q1FY17 as compared to Rs. 127.77 mn in the corresponding period of the previous year reflecting an increase of 27%
§ EBITDA stood at Rs. 65.13 mn as compared to Rs. 49.21 mn during the corresponding period of previous year, an increase of 32%
§ EBITDA Margin at 41.1% for Q1FY17 as against39.4% in Q1FY16.
§ Net profit stood at Rs. 38.34 mn for Q1FY17 as compared to Rs. 30.15 mn in the corresponding period of the previous year, an increase of 27%
§ Basic EPS stood at Rs. 3.45 as against Rs.2.71 in the corresponding quarter of last fiscal
Management Comments
Commenting on the Company’s performance for Q1FY17, Mr. Om Garg, CMD said “We have had another successful quarter with 27% growth in the sales as well as decent EBITDA margins. This is a result of strong order execution and increased shipments of female condoms over the previous quarter. During the quarter, we also launched our water based lubricant jellies which received favorable initial response. We are hopeful of its business to pick up in its first year of launch itself and to cater to the future demand, we have also committed capex for increasing capacity of lubricants as well as upgradation of our testing facilities. We are positive on the prospects of the business as we believe we are progressing well towards industry opportunities”
Business Review
Sales Analysis
§ The female Condoms contributed close to 55% in the overall sales as compared to 51% in the Q4FY16. This increase was largely driven by strong execution of orders in hand. The business trajectory is in expected lines as we have strengthened our efforts towards female healthcare going forward.
§ From a geography perspective, Africa remains our largest market for both male and female condoms during the quarter.
§ Exports contribution in total sales during the quarter was 74% with nearly 100% exports in female condoms and about 42% exports in male condoms.
§ The contract manufacturing sales contributed 25% in the overall revenues.
§ Received orders for supplying male condoms worth Rs. 67 mn and female condoms worth Rs. 34 mn from United Nations Population Fund(UNFPA). Both these orders are to be executed in the ongoing fiscal 2017. The Company also received orders worth approximately Rs. 135.8 mn with PSI India Private Limited.
Operational Developments
§ Encouraging initial response for our newly launched “Water based lubricant jelly”, the sales of the same will commence in Q2FY17
§ Obtained ISO 14001 Certification for our framework to manage immediate and long term environmental impacts of all our products. As a routine practice, the company also got renewals for ISO 9001 and ISO 13485 Certifications for male & female condoms and lubricants
§ Received CE mark for Water based lubricants, one of the significant step forward for initiating exports of these products to European and other regions
§ Received renewal from South African Bureau of Standards (SABS) for both male & female condoms.
§ Initiated capex for upgrading our facilities by importing two Richter Hi-tech Electronic Testing Machines
This planned capex would make us one of the most efficient testing facilities for condoms in India. This planned capex is about Rs. 12.5 million
Outlook
We remain optimistic on the overall business prospects of the Company. The global market is expanding and we believe the Company is moving well in the trajectory set for itself. We anticipated increasing revenue contribution from the female condoms and this trend seems to be moving in the right direction. From the next quarter onwards, we have set four priorities for the business:
§ Develop newer geographies for sales of male and female condoms
§ Expand installed capacity of lubricants to cater to annual sales worth INR 75 mn. We have confirmed orders worth INR 30 mn as of June 30, 2016 and we are getting satisfying response from the market.
§ Follow up with UNFPA on pre-qualification of Cupid 2 Female condoms, expected by October, 2016
§ Launch newly designed Cupid 3 female condoms as to widen our product basket for consumers
Going forward, we also remain committed to our resources deployed in R&D for expanding our product basket and develop products to widen our base in healthcare and personal hygiene products. As of July 1st, 2016, we have confirmed projected order for a total of INR 564 mn to be executed in FY 17. We remain committed to business and its future outlook
Disclaimer: Invested.
Thanks. Wondering what seasonality caused earnings to fall from last quarter?
Guess its not seasonality but the underlying B2B model. Remember they receive order from govt. Agency etc.
If you observe the results in the last two years, Q4 contributes the max revenue among four quarters of the year. This may be due to receipt of the orders in the Q4 of every year.
This could be one question to ask - seasonality of the business’s and what are they doing to reduce it?
Can someone share the conference call notes please. Unfortunately I could not attend the same…
Maybe sell to countries which have winter in Q1 and Q2 - which is when (statistically) more people have sex.
I will share my inputs from the concall:
If a majority of their sales are to foreign organizations - their financial year is the same as the calendar year. Which means Q4 for them is Sep - Dec quarter. So how does the response to seasonality make sense? India follows Apr - March financial year, the rest of the world does not. So the Q4 they speak of is actually Q1 in the international arena. Ditto for the budget reasoning given - India is not a big market yet.
Yes. This was sort of addressed. The fact was that there was a surge in Female condom usage during the last quarter and hence there was a increased sales. Not sure if this pattern will resurface during Q4-fy17. One thing is for sure. We have a confirmed orderbook and that is going to be executed during the course of the year. How does this distribute quarterly is an unknown to me. Other folks can pour in if there was a clear understanding.
Thanks @Value_Seeker for collating these questions. I was on call and got opportunity to ask couple of questions.
Concall details are well covered in the post by @anand_paxonet
Few additional points from my notes,
Disclaimer: Invested
I looked at company disclosure on BSE, I could not find the copy of clarification mail issued by BSE. I do not see any reason why such mail should not be disclosed to the shareholders at large?
Thanks @PK_1960
Unfortunately due to a work emergency i couldnt attend the concall.
The only variance i note from past discussion is FC margins are between 55 to 65 pc gross and not 40 pc gross.
Also good to note positive commentary in lubricant business.
Best regards,
Aniket.
My 2 cents-
PE is not the only criteria for evaluating a company. You can also take price to sales and price to book and compare with historical data of the company.
Disclosure- exited all holding a few months back.
