What about the second order effects of FDA downgrading female condoms? Will it become easier for more players to enter the market? Will Cupid be able to compete if bigger players start entering the market?
Hi,
Apologies as I could not join the call. Would really appreciate if someone could post the main points. I only came in for the last 10 mins - heard the Cupid got a brazil order of 66 cr and that the SA JV is going ahead?
many thanks!
Anyone attended the conf call? I could not find call transcripts yet on their website.
Why there is update on exchanges on this?
Anyone who attended, please update con call main points
Did anyone attend the Concall at all? I think ResearchBytes has put up the audio, but I’m unable to access it. It would be extremely helpful for every boarder if someone can get the audio and post it here.
Thank you.
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Thank you Aashav. I think better than allowing your mailbox to be spammed would be to put the audio in Dropbox, GDrive or SoundCloud and then post the link here.
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Conf call is very useful to abate all concerns. My key observations:
- About 45 Cr revenue expected for Q4 FY19. This will take the total revenue to about 90 Cr.
- FY20 is set to be a great year for Cupid as confirmed orders already are 85 Cr for FY20. Order book expected to grow further. Revenue in FY20 expected to be in broad range of 100 to 125 Cr depending on actual delivery of orders
- CEO will be looked but does not seem to be showstopper considering that current B2B tender business model itself is delivering
- Growth guidance is 12 to 15% on topline over next 3 years. Bottom line could be at higher CAGR considering operational efficiencies and economies of scale.
- Cash flow: Good cash flow expected, dividend will be maintained (25% of Net profits), inorganic route will be explored to utilize cash, and for 4 to 5 Cr remaining Capex.
- Key risks/concerns to watch out: Cupid should not slip on quality (no question was asked on earlier news that Cupid condoms failed in quality tests), CEO hiring atleast in next 1 to 2 years, increased competition
3 Likes
Q3 FY19 Cupid Ltd Con-call Notes
- Decrease in sales this Q was due to shifting of 2 orders worth 12cr from 3rd Q to 4th
Happened majorly due to timely delivery of LC and didn’t want to take credit risk - Order book- record high- 130cr as on 1st Jan. FC-60cr. MC-70cr. 50cr processed in FY19, balance 80cr for FY20. Includes 28cr of 66cr of Brazil. 38cr of this order would be added once receive the confirmation
- Cupid trademark registered in Brazil. Participating in both MC & FC market in Brazil
- Received pre-qualification status from WHO UNFPA for 3 years- Cupid 1 & 2 FC (newly approved) and MC
- USFDA- Applied for the trademark of Cupid Angel Condom. Also signed contract with international co. to conduct an efficacy test related to trials of USFDA
- Post ongoing capex, 52 Million FC and 410 Million MC capacity
- Expecting 95cr topline for FY19
- It takes 5 years for a new manufacturer of FC to register, clinical trials, regulatory approvals, ISO WHO etc.
- B2C: About 15 wholesalers PAN India, using wholesalers and distributors for marketing of the product as its cheaper and provides efficient return. All these is done for MC. FC are sold online roughly 25,000 pieces sold
- Non-condom- Hand Sanitizer: 1cr expected sales for next year- selling online and exports. Lubricant jelly: 6cr expected sales next year
- CEO- looking for a suitable candidate from marketing background but so far no luck. Marketing team working very actively currently
JOINT VENTURE
- Not completely sure about cancelling JV, evaluating possibilities
- If JV is cancelled, still will be supplying entire RM for 3 years with 45% EBITDA margins and will get the 5% royalty. Also, on cancelling JV, expecting a higher amount of SA FC tender In future
- Several other sub-Saharan countries are approaching cupid for JV
TENDERS
- BRAZIL- Expecting 29 Million FC order out of total 35 Million tender. Orders received by local vendors of cupid, awaiting final confirmation. Taking 28cr in order book out of 66cr as payment for rest is left. Delivery of entire order in 285 days . Not L1 but due to quality and timely delivery in SA market. Apart from this tender business, expecting more orders in MC(15% opm),FC(45% opm) and lubricants(50% opm) to other states of Brazil
- TANZANIA- First time here, got 17 Million MC order, delivered in 6 months, value 16cr
- SOUTH AFRICA- Yet to announce 2nd and 3rd tranche worth 40 Million each. Expecting by Sep’19. Currently 40cr in the order book, processed within 12 months, 20cr FC and 20cr MC- first time MC order
- INDIA- Received Govt of India margins 15%. GOI considering another tender for 250cr MC. Only 4 Indian players are qualified
- In tender business, price quoted is major factor, others are quality, timely delivery, track record
- Vendors sometimes markets with own different brands or cupid brand
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For the order-book:
40cr (SA) + 25cr (India) + 16cr (Tanzania) + 28cr (out of 66cr Brazil) = 109cr.
But the figure on the call was 130cr.
Can someone throw color on the balance 21cr? Am I missing something here?
Thanks!
I keep asking the company secretary to post the latest conf call transcripts but no response. Can someone else also push? cs@cupidlimited.com
many thanks!
It takes a week at least
Thanks a lot for the audio recording of the con call. Very very helpful
Conference call transcript has finally been uploaded!6b032388-7511-4e89-95b8-1c1f4d065306.pdf (219.4 KB)
WHO/UNFPA make up the rest. One of the last questions in the con call is about this 130 cr order book and the only thing missing in your list is WOH/UNFPA.
The so called shifting of order despatch from Q3 to Q4 has eroded more than 25% of market cap, not sure if we can recover it back even if Q4 topine remains as committed by management. Mr Garg has confirmed that one of them is already on the way as company received LC & other formalities while other one is expected by 1st week of March.
Management is not aggressive on expansion & seems to be satisfied with whatever they have achieved till now else finding an aggressive CEO shouldn’t be tough in such talented world.
There has to be a balance between aggressive expansion and conservative risk taking. Having built this company over the last 25 years, it is understandable that Garg is hesitant on going all out on expansion etc.
Lets say he does go all out and spends 20 cr on developing the B2C business in india or on acquisitions, and it doesnt work out, then investors are going to blame him.
I personally believe he is slightly conservative, but with reason. He is spending money on the US retail market which may yield very good returns if it works out.
With 130 cr order book plus a potential 38 cr from Brazil plus additional orders from South Afric between September 2019 and September 2020, I expect Cupid to at least do 35 cr to 40 cr per quarter going forward.
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Tanmay Shah: In some of the other products with similar materials like silicon and latex, baby bottle-nipples or menstrual cups and all, are you pursuing any other kind of product in the sexual wellness and social awareness kind of space?
Omprakash Garg: Yes, we are exploring those possibilities but we haven’t quite decided. However like you are mentioning it would be logical to go into businesses which are using the same raw material like rubber latex.
Looks like someone read your post. 
Is it just me or has the number of Analysts joining Cupid Concall from fund houses / M&A houses increased a lot? 1 or 2 of them usually join. However, 4 of them joined this one.
It is just you 