What a great thread and what learning! super really really enjoyed going through each of the 575 posts.
After going through , i have come to believe that Cupid has transitioned to a "Franchise". In his 1991 letter WEB laid down his definition of franchise and i believe Cupid fits the bill. He says
An economic franchise arises from a product or service that:
(1) is needed or desired;
(2) is thought by its customers to have no close substitute and;
(3) is not subject to price regulation.
The existence of all three conditions will be demonstrated by a company's ability to regularly price its product or service aggressively and thereby to earn high rates of return on capital.
There is no question that FC's are needed
The YWCA (a global organization working for the empowerment, leadership and rights of women, young women and girls in more than 120 countries) says that "Female condoms remain the only tool for HIV prevention that women can initiate and control". In other words - there is no substitute for a female condom especially when it comes to preventing HIV.
There are no price regulations.
Cupid has managed to increase its price realization by a significant amount thereby demonstrating its capacity to raise prices. Its raw material cost (latex) was only 36% of its sales in 2016. In 2013, it was 61%. While latex raw material prices have come down to Rs 8455 per 100 kg in March 16 from Rs 11,100 per 100 kg - translating to a drop of 24% ( source: http://rubberboard.org.in/rubberprice.asp?url=earlyrubberprice.asp). There is undeniable evidence that Cupid has managed to increase prices ( even if we price raw material cost to 2013 levels)
Over the last two stellar years 2015 & 2016, the company has managed to deploy an addn 11.9cr of equity producing an incremental profit of 8.2 cr. This translates to a superb incremental return on incremental equity of 69%. They have done this by reinvesting only 50% of the earnings. This means that the expected earnings growth rate going forward if they manage to keep up with this is a remarkable 34.8%.
The company has improved its capital turns ( from 1.92 to 2.2 ) and the margins have expanded ( from 17% to 26% ). Both have improved substantially.
It seems to be that at a PE of ~18 the market is completely ignoring its growth prospects. Any growth over any period will lead to a rerating again. I am invested and obviously biased ( came to the party late , read through all the posts , stock corrected dramatically and offered me a chance to get on the bus full of happy investors )