Well the penetration of condom usage is very low in our country, and the same can’t be given away 4 free for very long.but such things are required for spreading some awareness among the people. Entering the B2C market is essential as you can’t expect large orders from WHO every time.For an entry to the b2c segment will entail greater expenses on the advertising front.with more and more online portals in the sexual wellness business clocking good sales turnover ,without proper advertising one maynot be able to reach the end customer. As far as over the counter market is concerned growth is muted and the buying options are limited to what the stores have to offer,largely determined by the dealer commission and dealer relationship with manufacturer,mainly dominated by unlisted, unorganized players.but considering the very low penetration of usage everyone in the space may have a pie for themselves in the future. Our population speaks for itself.its the difficulty associated with purchase of a condom from a shop that has led to this low penetrations,but with the new generation and online stores things look positive and proper B2C marketing seems inevitable
Disc: not invested,tracking,may invest once proper B2C initiatives are taken by the company
It might help change long term behaviour but here we are concerned about the stock. Don’t think folks will buy it from Cupid in the short to medium term if it is available free. It further dents the biz case for the company setting up B2C distribution. Additionally, if people are not using condoms, there must be other reasons. There have been enough awareness campaigns since independence. We need to find out if this change in behaviour is really going to happen?
Obviously the advent of online market places is already bringing in change.people are too shy to buy condoms from a medical shops and there was a time when people never cared about family planning …awareness programs were always there but that never gave any desired results…and 10 lakhs condoms doesnt seem a big amount @ all and u will need those orders to be made repeatedly, who will be able to give it for free for long…I read an article abt some online firms some years back.attaching the same
Infact this is advantageous to Cupid, as they are less into B2C but more into B2B only. So anyone supplying free too needs to source from vendors and Cupid is better placed in this space and associated with Governments/WHO for quite some time
The free condoms won’t last forever. This is just to create awareness and to test if people are willing to use if they can make the purchase anonymously which the free condoms has proven to be true.
I think the key to understand this is if the other players in the B2C segment that you mentioned are making money after spending the money on advertising. I believe there are price curbs on condoms along with free distribution. It is a tough task to break into the segment and the surety of making money is also doubtful, unless the concept of female condom catches up majorly.
One cannot expect major rerating with the tender business and one is not sure of the revenues next year,
Predictability of future earnings is not there.
I believe unpredictability of earnings provides the best opportunity to make money. If everyone is confident about a stock then it is already overvalued. So no money in it. I have an hunch that Cupid will do well. And in the long run it will make money.
Cupid is a good stock indeed. But does anyone know if this company has a succession plan? Is there a dearth of young blood in the management of the company?
Management said in the last call that they are still looking for a CEO and not found a suitable candidate yet. So the intent is there and hope that will eventually happen. I believe all these uncertainties are in the price. 40+ ROE/ROCE, 1.5% dividend yield, swelling cash, zero debt. When things fall in place, this price would have gone up before we realize. So I keep accumulating.
Thank you sir. Very helpful. I quite like this story. The turn from a commodity type business to a branded business has its own costs but if executed successfully will yield good returns to shareholders. One more question if I may, did the management clarify why debtor days have risen from 25-30 days sales seen during FY12 and FY13 vs. 58-64 days in FY16 and FY17? Thank you.
