Cupid

Cupid
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Main strategic themes that will drive us to the next ladder of growth as per FY 2017 annual report:

1. Strengthen our institutional business in new territories

a. 44.7 billion pieces by 2021 from 26.5 billion pieces in 2015 and we expect the growth to come from select markets

b. Brazil, Nigeria, Tanzania and Indonesia where there is significant demand for the products and we have started with the process of getting our products registered.

Got its product registered in Tanzania (Feb 2018). Efforts on for Brazil.

c. United Nations population fund (UNFPA), WHO, USAID, CIS countries, India. Client concentration - 50% order from Gov of SA.

2. Foray into the United States for Female Condoms

a. Already done for male condoms

b. USFDA approval wants to qualify Cupid for bidding for USAID tendering for distribution of condoms across the world.

c. In this issue, it will be released in January 2019. There is only one manuf in US. Current sale of FC in US market is 6 to 10 million pc in retail.

3. India Based B2C business

a. launched our Cupid range of male and female condoms along with jellies through a well-thought-out promotional activities and a robust distribution network

b. aiming to establish a strong retail presence by appointing its super stockists

c. India foray starts in Mumbai with Pune, Ahmedabad, Jaipur, Calcutta and few other states

d. intend to bolster sales through online channel and target to distribute products at 1,000+ towns and cities in India. For B2C online sales there is 15% repeat order. Orders are from 50 to 350 towns. 1200 orders mostly 1 pc. SP Rs 50. (Nov 2017)

e. Competition of Reckitt Benckiser (durex), Alkem (playgard), JK helen (KamSutra), Mankind. All of them have very strong distribution channels and brand power. Mankind boast of 3 current brand ambassadors from Bollywood and so getting big B.

f. Two new players have come in India with more ad spend. (Feb 2018)

4. New product initiatives

a. Launch of our unique patented male condom giving extra pleasure to the user during safe sex

b. Second generation hi-tech version of Cupid Female Condom

c. Foray into hand sanitizers (Mar 2018), vaginal creams and wipes used in the slowdown of premature ejaculation 

Important notes

--Promotives sold in bulk deal in March 2017. It is one sale and one sale in NY .

--Basant Maheshwari sold off his entire stake (including Pooja Maheshwari) in mar 2017

--The promoter is in his 70s and his children are not keen to run the business. Cupid is looking for a professional CEO.

--From a business nature perspective, the contract manufacturing business contributed close to 20% in overall sales

--Margin wants to get impacted if more MC sells compared to FC.

--There will be 5% reduction in FY 2019.

--ISU has offered their 3 patented FC for manufacturing. Cupid is silently considering the same. (Nov 2017)

timeline	Events
Feb 2018	Installed capacity till now to produce 325 million male condoms, 20 million female condoms and 210 million sachets of Lubricant Jelly Machine can be converted to MC or FC. 80 million MC = 22 million FC from same machine per year
Feb 2018	20% capacity increase - cost 7 cr - 2 machines - can produce 12 cr worth of MC. If used for FC it can produce 40 cr worth. To go live in Jun 2019
Feb 2018	- New tender from south africa - there would be 4 qualified bidders. - End date of bidding is March 2018, Result in April 2018, supply from July 2018 - Female Order from 54 million to 120 million (80 import + 40 local manf) over 3 years, worth 240 Cr --1 billion times C each year for 3 years --Lubricant 20 million sachet each year --Expected order is 25 million for exports - 20 million as part of joint venture in South Africa probable in Mar 2019 --Old order of Female C from South Africa was 103 cr (43 million pc, 80% of order size) for 3 years. But it seems to be over 70 years --71 cr order book for next three quarters (india order + pharmaceutical company + old south africa order + WHO) (52 MC + 19 FC)
Dec 2017	Of Domestic sale 10% sales from B2C 90% on B2B
	Expecting FC sale of 50 Cr = 25 million unit in 2019

Topline	Expected to increase by 20%
Operating margin%	@ 40% To remain flat or decrease
PE	@ 16 Expected to be flat or increase
Mar 3 2018