Good info @dineshssairam . I think it is good call by management to scrape the lot instead pushing such expired products in market. If they loose credibility by selling expiry products total, sales might be at risk and bad media attraction. I think management is honest enough in business
No one sells expired products in the market, it invites regulatory action, heavy penalty including risk of disqualification and customer rejection. It’s nothing to do with management honesty.
1 Like
It is general human tendency to find a reason to justify the any/every-action by the company when one owns it i.e. ownership bias 
Nothing offensive on lighter-note. At times, my strong feeling is that if Cupid management listens to Valuepickr forum discussion on it they have a strong chance of improving their business 
Note: Exited at 350 levels long back.
2 Likes
The management is good, no doubt. It’s the mismatch between investor expectations arising and delivered results that drove up valuations back then, now being driven down.
They need an energetic CEO or be acquired by a bigger fish. Until then, it’s everyone’s guess.
Surely without growth, valuations won’t come thru a nor will marquee investors enter, regardless of what the management says
A company that’s into contraceptives and heavily relying on government orders will not have pricing power, nor will those governments allow them to make high profits. For a business of < 100Crs top-line only way it can command higher valuations by delivering growth. Growth is stagnant from last 3 years, for growth to pick-up secular way they either have to invent a new product or get into retail B2C mode, where they have to compete with Durex/Mankind/Apollo, whereas apollo has a advantage of selling their products through their pharmacy chain. Taking on biggies isn’t a easy job unless you have a competent team of professionals.
Promoter selling 4% odd stake, if I am not wrong, to buy some investments in States a few years back was a clear indication that they were not seeing bright days ahead. Why will one sell stake if if it’s going to give better returns vis-a-vis other options.
Management may give many clarifications but it’s up to the investors to connect the dots.
2 Likes
True, if the market was crowded with a lot of players. Cupid is one among the only 3 players in the market (The Chinese player is inconsistent and too small to matter). Also, Cupid is one among the only 3 profitable Contraceptive manufacturers in India. So clearly, despite the business model, they are profitable. Your statement is wrong.
This is quite true. But Cupid has indeed entered new markets for Contraceptives and is evaluating entering other related business lines (Female Health is a particularly interesting one - Amrutanjan has also entered this space recently).
Whether you think Cupid will succeed or fail in the new ventures in a different topic altogether. We can discuss more if you want to.
The reason for this was expressly given in a Concall (Or some press release?), That Mr. Garg plans to retire to the USA. If “getting out” was the intention, why stop with just the 4%?
You talked about Ownership Bias (Mere Ownership Effect), but Endowment Effect is also an equally dangerous form of bias. It’s good to be conservative in investing. But once you’ve gotten out of the position, it’s not required that you take a completely negative stance against the company.
Rational discussions lead us to all sorts of mutual learning. But generalized love/hate for a stock gets us nowhere.
2 Likes
Things look rosy from where you stand. (Selling at 300+). I don’t disagree with your point but you fortunately sold before markets cracked. Major small caps in my portfolio have cracked 30-40pct and a couple even 50plus. Cupid is one of them. For me it is just another opportunity to buy quality stocks at a better price.
Cupids main drawback is that it is an unknown ,small cap, single product company. I was not happy with Q3 but am more than satisfied (not happy) with q4 because most micro caps have faced liquidity crisis and recession.
Let’s hope they come up with menstrual cups and silicone nipples fast if they are considering the same. ALSO, I would surf a Kamasutra or a Durex website over cupid anyday for the superb involvement. These are my findings.
Happy investing.
1 Like
@dineshssairam I have nothing against cupid per-say, moreover I got more than 100% returns in like 3 years I am merely pointing out as to why it can’t create significant shareholder wealth given the opportunity size for the FC business. Being merely profitable among 3 manufactures isn’t a guarantee wealth-creation in future. Don’t worry about my statement being wrong. I think forum members will accept it merely as a opinion of a ex-shareholder.
Why aren’t you answering my question as to what moat does Cupid have to compete with bigger brands like Durex/mankind/apollo/moods/skore in male condom market? If I am not wrong it constitutes significant % of its revenue i.e. 59% for FY19. Secondly, what’s the technological edge with Cupid that’s not possessed by other manufactures for which they aren’t entering into FC market? Is it some patent or segment as such has no headroom to grow? Isn’t it not true that until SA orders arrived, future was not bright for Cupid?
Entering related other business lines is easier said than done. There are already established brands.
If you believe everything that Mr. Garg says about his stake sale, he had said that they can achieve 25% CAGR for next few years in one TV show. What happened to it ? As investors, we aren’t supposed to believe management on face-value.
I haven’t taken negative stance, I am still standing by my statement that Cupid can’t deliver the secular growth for next N years only based government orders or by entering adjacent areas but should walk the talk by performance. If it does, I can turn to be an investors provided it gets all ticks in my check-list.
4 Likes
My reason for selling Cupid was not fall in price but the business outlook. Management wasn’t delivering it’s promise + stake-sale. Also, it sounded to be in peak of it’s business cycle with 40% margin. I still hold a few micro-caps which have fallen 40% odd but they have strong headroom to grow and opportunity size is big and they have not failed in delivering strong top-line growth at the least.
In today’s internet-age nothing is unknown unless data-bases intentionally hide them
1 Like
I don’t understand the question. I think you’ve got the business models mixed up.
Durex/Mankind/Apollo/Moods/Skore compete in the Indian condom retailing market. Cupid largely participates in international and Indian tenders (i.e. Wholesale condom market). They are not in the same space to begin with. As per several concalls, retailing is actually a cut-throat business where the profit margins are undesirable. Cupid tried that route in India and decided against it.
Currently, they are trying to do retailing in the USA. We will see how it turns out eventually post 2020-21. If it is a success there, they may attempt to implement it elsewhere too.
Anything related to business is easier said than done. Give the company at least time to evaluate and/or execute the opportunity. If they fail and lose a lot of capital in the process, I will be a critic too. But I do not believe that a company should give up on experiments (Stress is on Capital Allocation). Every big brand today was once tiny and faced a lot of ridicule.
Of course, I’m not asking that anyone believe the management completely. But when the management fails to keep up their guidance, the reason for the lapse is equally important. So far, these reasons have been satisfactory.
Like I responded to someone else earlier, it is not the management’s guidance of high growth that keeps me interested in the company. It is the step-by-step explanation of what’s happening in their business that does. Once the management start fibbing about the numbers, I will be out of the investment. That day is not today.
4 Likes
Hi guys,
I just spoke with Mr Garg and got some additional information that I can share with you. There was a lot of talk about Cupid not selling the inventory write off and when asked, Mr Garg responded that the condoms manufactured for the indian government have a special marking on them which says that these cannot be resold in loose. So selling it elsewhere is not a possibility.
There has been lot of talk about Garg selling shares. There is a genuine reason for this, he used to reside in Ohio and wanted to move to New York where he currently resides. The sale was to finance the property as NY property prices are quite expensive. Also he shuttles between Nasik and New York.
As far as I can tell the management is honest and transparent and trying their best. For instance, Brazil was a huge win for the Company i.e an order of 60+ cr over a year is a big win. It is unfortunate that Cupid did not get a higher allocation of the South African tender last year. If Cupid had got a substantial allocation of the SA tender, combined with the Brazilian tender would have meant revenues in excess of 100cr.
The tender business is an uncertain business which no one can do anything about. The US entry into prescription market should give a good boost and more stable income. Mr Garg said that FHC generates $10m from the prescription market and $30m overall from the US market. This market is growing at 20% per year as well. Taking 10% of the overall US market would mean $3m in sales and much higher margins. Clearly this is still a long way off 2021/2022 but there is a plan and management are working towards it.
7 Likes
If all other states participate in it then cupid can explore selling their women’s health upcoming products
Source : link taken from fmcg products topic
1 Like
Cupid makes entry in B2C with eCommerce route.
This goes to show some fresh experiments are being tried to augment its business strategy.
Glad to see products are not ‘out of stock’
Female condom priced @95 for pack of 2.
https://www.condombazaar.com/condom-brands-india/cupid-condoms.html
1 Like
Cupid Condoms have been available on Amazon for quite some time now.
According to the article, Competition Commission of India (CCI) investigation arm has concluded that 11 companies including Cupid colluded and submitted non competitive bids in government tenders. Could have a negative impact on the company
3 Likes
They got their Angel Brand registered in US & that looks good for expansion plans in US.
The Q1 result will be declared on 22nd & concall is scheduled on next day.
Early result & trademark registration has not helped … let us see if results give some relief to investors.
1 Like
Share bazaar magazine has recently published a Cover page article on Mr. Om Prakash Garg, Chairman & Managing Director of Cupid Limited titled ” INDIAN LEADER TRANSFORMING TO AN INTERNATIONAL ONE”.
You can read the complete article by clicking the below link.
1 Like
Among other things:
- The company talks of 12 to 15% growth.
- Talks JV.
Nice narrative attractively drafted. Should the company mention such things that are not actual in the name of “future”?
Is 12-15% plausible?
Companies’ long term can’t be gauged from one quarter’s numbers.
Notwithstanding the quarterly results, unless there’s sustainable growth we’re not going anywhere. Upto now, the order book was providing some kind of relief in the backdrop of poor numbers.
I now feel that order book is not confirmed business and therefore doesn’t mean much until it shows up as topline growth.
Remain invested until the balance sheet is healthy and management has integrity with hope & fathom that growth will come back.
1 Like
No one wants others to push into looking anything as every person may have his own ways / metrics for his investments.
Certainly for me, quarterly no are one of major events which decide my investment journey. Having said its NOT the only metrics for me, its part of a bunch of things & I don’t want to miss / skip any quarter. These nos force me to review my investments each quarter. I don’t review them each day or each week but certainly I have time to review them each quarter & reviewing them in backdrop of quarterly results is best timing as per me.
2 Likes