The Annual Report for 14-15 is out. The undertone is distinctly bullish. The CMD Mr. Garg worked all these years without any remuneration. Now that the Co. has started rewarding it’s share holders, the mgt. has finally started on a remuneration of Rs. 3 lakh a month. A good example set for other promoters, but are they listening?!
http://www.bseindia.com/bseplus/AnnualReport/530843/5308430315.pdf
Rajeev
Very impressed with the AR - I get impressed when someone apppreciates the value of relationships built during hard/lean times. Anyway the video shows om garg as a man with a larger purpose. Such entreprenereurs are rare to find.
Waiting for a good correction to get in - its’ a rare indian medical product company that competes across the world and has high ROCE and ability to generate FCF’s.
At an OCF of about Rs. 6 Cr. for FY 15 and an expected Rs. 15 Cr. OCF for this year, a OCF yield of 10 % or so, which means Rs. 150 or so in terms of price, should provide MoS IMHO.
@varadharajanr
Mr. Varadharajan, Which video you are talking about. The old interview of Mr,Garg or any other new video
Female Condoms are being promoted extensively in the US. The product as well as the market itself, is relatively at a nascent stage. It’s difficult to predict the market size say 10 years from now, but it does have the potential to surprise all of us on the upside.
Received an e-newsletter from National Female Condom Coalition which will shed some light on the efforts being made to promote female condoms. Those interested in keeping up with the latest developments may go to the following website & sign up for the newsletter. http://www.nationalfccoalition.org
I have been a regular reader of highly informative posts on Cupid. I would like to thank all members esp Rajeevji for contributing & keeping everyone updated. I am an investor in Cupid & Cupid is a sizable portion of my portfolio (offcourse not as big as Rajeevji 
) … in recent past I had visited the company to meet Mr Garg and I would like to share my impression with you all. He lived a comfortable life in US and is a self made human being having tried his hands in many businesses. Also all must be aware that he has some vision & hearing troubles. To leave all comforts in US & after being independently wealthy and coming to sit in some MIDC in India requires high level of motivation. I felt he is the perfect guy whom u should trust ur money with. He is highly conservative in business & will not resort to debts & will only invest in businesses like sanitary napkins etc only when he sees a profit. He also likes to travel a lot and is very philosophical about life.
Regarding the fundamentals of the company you all know much more than me… They r very sound, debt free, good margins etc. INR fall & Rubber fall should result in increase in margins- thats my understanding. Also they are addressing a huge global problem & they r the lowest cost producers. So whenever there is additional demand company is very well placed to capitalise on it. All current fundamentals r well known to the market but as George Soros says “Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected”… many new unexpected positive developments can happen in Cupid. Also thr annual report states that they expect large orders to come. Any new order of a good size will only to lead to re-enforcing a very strong stock trend. Again company is addressing such a large global problem & I find 220 crs market cap quite low to be honest…
One interesting fact to note about Female Condom Market. I was under impression that the Female Condoms sale will be going upwards globally. But if we see the sales of the closest competitor of Cupid [(FHCO)][1] I find that the sales are declining Year on Year for them. Also the stock price also plummeting since 2013. I found out that the company stopped paying quarterly dividends to do the acquisition of other players and due to that sell off in stock price happening. [Link][2] .
There may be few things for this decline in Female Condom sales for this company
If the first point is valid then we will be having a stellar growth rate for Cupid.Views invited.
Again, the recent presentation from FHC states that the Global Condom Public Health market is $400-500 Million. [Link][3]
Disc- Not Invested, On radar
[1]: http://finance.yahoo.com/q/is?s=FHCO
[2]: http://www.thestreet.com/story/12773219/1/why-the-female-health-company-fhco-stock-is-down-today.html
[3]: http://femalehealth.com/wp-content/uploads/2015/09/FHCO-Q3-2015-Investor-Presentation.pptx
anyone having private transport going to Cupid AGM from Mumbai ?.. we can share the ride & costs offcourse 
Investors who are attending Cupid AGM, please see if you can ask the following questions:
Can you please let us know what are the different channels of revenue and also please break up the sale percentage between them (like Govt orders, Exports to clients, Contract manufacturing & Brand selling from online / distributors) ? And which of the following segment you think will grow fast in future ?
Can you please let us know the margins of Male Condoms and Female Condoms ?
What is the percentage of sales going into R&D activities ?
As our capacities are very much under utilized (which is in a way good for us in terms of future minimal Capex requirement perspective), 37% utilization of male condoms & 67% utilization of female condoms. When do you expect the utilization of reach a optimal levels of around 60% to 70% in male categories and how much it will cost (Time & money) to convert any male facility into female facility if needed, based on the demand ?
How is the response from e-commerce sales ?
Regarding the new product Lubricant jelly: Has the product launch happened already ?
What is the growth prospects you are looking at your new product Lubricant jelly ?
Is it a B2C product or supplied to clients (B2B) ? And what are the margins expected from this new product ?
In your website you mentioned ther is a possibility of adding new products like sanitary napkins, Adult & Baby Diapers into the market by the Cupid brand. But as this market segment is already dominated by the big players like Procter and Gamble, Whisper, Johnson & Johnson etc and do you think we can make a difference among those well established players, without burning much of the cash ?
Is the company open for a strategic buyout by some other big pharma player in industry. If any such offer comes, are you willing to move forward ?
There is a grape wine that, Cupid is planning for a JV with Piramal enterprises. Can you please comment on the same ? Or do you have any JV plans in future ?
Best Regards.
Just add to that if we can find out what is the succession planning for the current chairman
Also how is the response from the female users about the effectiveness of this product
No Krishna, I will not be able to go. Would appreciate if you could give us an update here on how it went & the key take aways. Thanks.
Is there any update from AGM ? Is it good price to enter after becoming 7 beggar in last 1 year.
Did anyone get a chance to go to the AGM. If yes could you please share your notes
Disclosure: Invested from lower levels
I gather from Abhishek Kulkarni, a young n persevering full time investor, who attended the AGM that it was a well managed event, with elaborate discussions about the business. The Company is doing very well. The Export sales are not hedged n so are benefiting with the falling rupee. Rubber prices have also been falling so the business is currently in a sweet spot. The Co. has also recently won a Govt. contract. All the shareholders were later taken for a factory visit.
My own expectation is that we can expect good numbers from the Co. in the foreseeable future. An interim dividend along with Q2 results is also a possibility.
If the company is not hedging then it may have spiral effect when the INR falls. Can we get some insights why the management is against hedging?
Thanks for your update Rajeev.
No one noted, but promoter Mr. Garg has released 1/3 of the pledged quantity as per information to exchanges on 28th Sep. Looks like over time all the pledged shares will be revoked. All round positive vibes. Pledge down from 14.34% to 9.01%.
Recent Govt. win is not informed to exchanges as this might be a normal course of business procurement, but is this the large govt. order that the company is talking about off late (in AR, Investor presentation)?
Agree to your assessment that if there is no hedging, then the benefit of recent rupee depreciation will directly flow to bottomline (should be around 50 lakhs - 1 Cr). But again, as posted above, it will be risky if INR appreciates, I hope management has a framed policy as currently its majority revenues are from exports.
As per your expectation, if the company declares dividend, there could be further re-rating as people will be convinced about its cashflow and revenue visibility.
I think the main thesis here is 1. Revenue visibility and bumper margin expansion as no CAPEX in the foreseeable future also leading to free cashflow and dividend.
Initiated a small position, volumes are really low with no institutional/FII interest as of now, which is a big positive I think. Based on Q2 results, will further invest into this company.
As per the company the current capacity is 40 crore male condoms and 1.5 crore female condoms which could be equivalent to revenue of approximately,
(all in crores - price assumption as below)
(40 crore pieces *5 INR per piece) + (1.5 crore pieces *20 INR per piece) = 230 crore. FY15 Revenue 45 crore and FY 16E revenue 60 crore. Which means the company needs no capex until it becomes 3 times the current size?
Did not assume that a portion of male condom facility will be converted to female, in which case the revenue at 100% utilisation will be more than the above estimates.
Assumed a male condom price realisation to be 5 INR per piece and female condom to be 20 INR per piece.
Please suggest if there are any loopholes in the above calculation? There seems to be vast underutilisation of capacity as we speak. So company can take large orders without sweating if my above calculation is somewhere near to reality. @RajeevJ ji and other senior members would be in a better position to offer some insights here.
Hi Richdreamz,
Wanted to know how did you assume Rs.5 & Rs. 20 per unit sale price?
Hi Jigar - As per the recent order to the company for female condoms, the price worked out to be 18.5 INR as per calculation by a forum member and for retail the price is around 50 INR per piece as per online retailers websites. I assumed the price to be nearer to institutional sales as this is where the revenue would be coming from majority of it.
As for male condoms, the online prices are anywhere between 5 INR per piece to 15 INR as per amazon.in etc, I have assumed conservatively at 5 INR.
What are your observations?
Great. I have not looked into the numbers. So asked you. Thanks
As almost everything related to the growth in revenues, operating leverage, exchange rate gains, etc have been talked about, I think we should also look for any negatives which may arise, just to understand the MOS the company has from levels here on.
In this regard, I would like to know the reason behind drop in sales in FY13-14. Sorry, if this has already been discussed. I had read the post long ago. Hence, I do not remember now. TIA
