Veru Healthcare and FHC(O) are the same. There are only 4 players in the global B2G2C Contraceptives market - Cupid, FHC, HLL and a Chinese player.
Last year’s order book was 63 Cr. This quarter saw a dispatch of 17 Cr worth of orders. Along with the new order of 40 Cr from the JV and 9 Cr (The remaining 22% allocation apart from FHC’s 75%), the current order book stands at 95 Cr. How much of this will be executed remains to be seen. This is only for the first tranhce (40 Cr) of the 120 Cr requirement for 3 years. The remaining (80 Cr) requirement isn’t allocated yet. According to the concall, Cupid is expecting a bigger piece of the pie for the latter allocations.
A 10% growth in topline from last year would demand Cupid to execute an average of around ~24 Cr for the remaining quarters in the year (or) 75% of the current order book (Which sounds a little steep in my opinion).
Assuming that the JV executes the production of 16 mn, at an average rate of Rs. 20 (Say), Cupid will be privy to ~16 Cr worth of Revenues (16 * 20 * 49% / 10), although this will come by way of Capital Appreciation, rather than an actual increase in topline. I’d be interested in understanding how Cupid Values the JV in its books.
The JV has not begun operations as yet. However, once it does, Cupid will get a one-time payment from the JV for import of raw materials from India (Cupid’s unused raw material, that is). This could also help a little with the topline this year. After that, Cupid will only benefit via the Capital Appreciation of its 49% stake in the JV and a small (5%) royalty payment every year. The positive here being, the SA government has promised to take up almost all the production done by the JV and this could possibly be a medium-term to long-term (As of now, 5 year) engagement.
TLDR: The news of FHC winning 75% of the first tranche has no bearing on Cupid, at least to the extent that it’s already been discussed by the management.