A back-of-the-envelope calculation shows that the female condom order is lower than what Cupid and Mr. Garg were expecting. The INR 16.29 crore order translates to roughly USD 2.3 million. I recall the management saying that the per piece realization on female condoms is USD 0.3-0.34. So, it seems that we are talking about ~7 million female condom pieces for Cupid. Mr. Garg had mentioned that he was expecting 25-30 million pieces out of the total of 80 million up for tender, spread over a three year period. That translates to 8-10 million pieces a year.
Pending more color from the management, it is safe to assume one of the following has happened:
- The volume allocated to Cupid is lower than expected and other competitors have got more.
- If the volume is 8-10 million, then the realization per piece is lower, which will hurt margin.
- The SA govt may be looking at increasing volumes in the future and it might be too simplistic to assume a one third division every year – this is a possibility since there has been a lot of political noise around this tender in SA.
This order, I am hoping, is separate from the 20 million pieces that Cupid is expecting from the SA JV.
On the male condom side, I do not recall the per unit realization but do remember that Cupid expected 100 million of the total 600 million up for tender. Does anyone have the per unit realization for male condoms?