CUPIDNSEQ4 & FY 2022May 31, 2022

Cupid Limited

6,346words
129turns
8analyst exchanges
3executives
Management on call
Om Prakash Garg
CHAIRMAN & MANAGING DIRECTOR, CUPID LIMITED
Saurabh Karmase
COMPANY SECRETARY & COMPLIANCE OFFICER, CUPID LIMITED
Om Garg
Chairman and Managing Director of the company. Along with him we have Mr.
Key numbers — 40 extracted
Rs.209 crore
forward, we expect company to do quite well on the back of our strong order book, which stands at Rs.209 crores as of April 2022 and these orders are coming from many countries and several of them have been co
Rs.50 crore
re two other salient features from this last year's performance. Number 1, we achieved a record of Rs.50 crores sales from UNFPA during the year. This is the highest ever sales we have received by supplying to
Rs.25 crore
The second point I would like to mention is that this year FY22, we were able to achieve a sale of Rs.25 crores worth of water- based lubricant jelly sales as compared to only Rs.2.25 crores in the FY21, a yea
Rs.2.25 crore
to achieve a sale of Rs.25 crores worth of water- based lubricant jelly sales as compared to only Rs.2.25 crores in the FY21, a year ago. This is a significant improvement on lubricant jelly sale, which is a hi
45%
s a significant improvement on lubricant jelly sale, which is a high margin product for us, 40 to 45% EBITDA margin. One other factor related to jelly sales is that for the first time Cupid has receiv
rs,
ancy. Please go ahead. Onkar Ghugardare: My question was regarding the Rs.209 crores worth of orders, which you are having. So, can you just bifurcate forget that? Om Prakash Garg: Yes. Out of that w
Rs.122 crore
ou are having. So, can you just bifurcate forget that? Om Prakash Garg: Yes. Out of that we have Rs.122 crores of order from various customers confirmed with purchase orders, including UNFPA and the balance o
Rs.71 crore
or which the purchase orders will come through each quarter. We have a very healthy order book and Rs.71 crores order 71% of which is for female condoms and 24% of the orders are for female condoms and the bal
71%
se orders will come through each quarter. We have a very healthy order book and Rs.71 crores order 71% of which is for female condoms and 24% of the orders are for female condoms and the balance is fo
24%
r. We have a very healthy order book and Rs.71 crores order 71% of which is for female condoms and 24% of the orders are for female condoms and the balance is for lubricants. Onkar Ghugardare: So, th
Rs. 8 crore
rg: Yes. The capital expenditure we have made in this project including the construction is about Rs. 8 crores and because of the delay in the regulatory approval, we are forecasting a very nominal Rs. 5 cror
Rs. 5 crore
s. 8 crores and because of the delay in the regulatory approval, we are forecasting a very nominal Rs. 5 crores sales revenue during this current financial year with EBITDA margin of about 20%. However, starti
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Guidance — 20 items
Om Prakash Garg
opening
“Going forward, we expect company to do quite well on the back of our strong order book, which stands at Rs.209 crores as of April 2022 and these orders are coming from many countries and several of them have been confirming repeat orders.”
Onkar Ghugardare
qa
“The second question is on the Vitro division, which you set up recently and which will be commencing in the current financial year.”
Om Prakash Garg
qa
“For the IVD new project, I had mentioned in the last con call that we are going through the regulatory approval process, and we are through with about 12 products with the Drug Controller General of India.”
Om Prakash Garg
qa
“We plan to start our commercial operation in the second half of this current fiscal.”
Om Prakash Garg
qa
“Following that we will be moving to apply for the CE license, which is required for sales in the European market and ultimately for WHO GMP, which we are expecting to apply in the next financial year.”
Om Prakash Garg
qa
“The capital expenditure we have made in this project including the construction is about Rs.”
Onkar Ghugardare
qa
“The next question is on the revenue potential for the current financial year, you have around Rs.132 crores so what kind of targets you are looking at and out of Rs.209 crores how much you will be targeting to complete?”
Om Prakash Garg
qa
“40 some crores will be carried over into the next financial year.”
Onkar Ghugardare
qa
“So, what you are saying is that out of Rs.160 crores of total revenue which you are targeting only Rs.30 crores will be from female condoms?”
Prashant Kale
qa
“The question is, management projected that IVD business will be commercialized in June 2021 because of the COVID disruption, commercial construction activities took longer time.”
Risks & concerns — 1 flagged
We understand it, sir, because we live in a red tape country, it takes like, for these regulatory things, it's very difficult and complicated.As a businessman you understand it andwe also understand it, but now are we confident that we will get the approvals in next three, four months and we will start the commercial activity and sales of the IVD products by let's say November, December or something like that.
— Prashant Kale
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Q&A — 8 exchanges
Q
My question was regarding the Rs.209 crores worth of orders, which you are having. So, can you just bifurcate forget that?
Om Prakash Garg
Yes. Out of that we have Rs.122 crores of order from various customers confirmed with purchase orders, including UNFPA and the balance of the order we have received confirmed information from the treasury of South African Government for which the purchase orders will come through each quarter. We have a very healthy order book and Rs.71 crores order 71% of which is for female condoms and 24% of the orders are for female condoms and the balance is for lubricants. So, this 71,24, you're talking about for the entire Rs.209 crores. Yes, exactly. Okay. The second question is on the Vitro division,
Q
Yes. This is Prashant Kale an individual investor. My question is regarding IVD. IVD sales during this year is zero, not zero 3 crore 72 lakhs, but during this quarter and last quarter, it was zero. The question is, management projected that IVD business will be commercialized in June 2021 because of the COVID disruption, commercial construction activities took longer time. but then how would management miss out the approval part, which is more complicated than putting bricks and mortar together? The approval part in India, which takes sometimes six months to eight months, but management I thi
Om Prakash Garg
No, you are correct in the sense that construction was delayed by over 15 months due to Corona, there was no activity, no workers available. The entire project was stalled. After that, our initial timeline or the regulatory process was six months, which is doubling more than back that to about 12 months. The requirement of the different departments for each of the products are quite extensive and both the Drug Controller office and the local FDA offices, they have informed with additional work resulting in much slower processing for our applications. These were some of the reasons which were b
Q
I guess you have around Rs. 54 crores of cash in your balance sheet, how do you plan to utilize that?
Om Prakash Garg
Well, we are looking at couple of possibilities. Number one, our working capital requirements are going to be increased from about Rs. 30 crores to as high as Rs. 45-50 crores because of the larger volume of orders. Second category for the requirements would be the working capital funding for IVD business, for which we don't have a precise estimate, but we expect that could take another Rs. 15-20 crores in working capital. Of course, the third category is we always planned to maintain our dividends, at least Rs.4.50 per share. As we mentioned, we have very little expenditure planned for capita
Q
Yes, sure.
Management
Q
You are asking me how close we are in the negotiations. I say we are about 15% to 20% far apart between the expectation and the offer.
Management
Q
My first question is we have done exceptionally good on lubricants jelly this year, right? So, how sustainable is that going forward?
Om Prakash Garg
Which one? Lubricant jelly. We have done Rs. 35 crores of business this year. So, how sustainable this business and the turnover going forward? We have actually done between Rs. 25 crores and Rs. 26 crores worth of business of lubricants this year which I mentioned is the highest ever. Now the indications are that we would continue to achieve this level of sales going forward. This is based on our discussion from the procurement agencies and agents at UNFPA. The main reason is that the use of personal lubricants along with the condoms has been found to be very-very useful and favorable with th
Q
My question is regarding your order book. You have mentioned your order book is of Rs. 209 crores but I think in the last quarter press release the order book was Rs. 141 crores and between quarter four and quarter one we have announced an order win of more than Rs. 170 odd crores. So, if I do the calculation, the Rs. 209 crores order book looks less. So, is there any cancellation of order or am I missing something in this?
Om Prakash Garg
No, not really. We had Rs. 140 crores worth of orders at the last meeting time and we have dispatched about 30 million out of that in the January to March quarter. So, that left us with a balance of Rs. 110 crores. And we had received a smaller quantity of orders from UNFPA, so that 110 increased to about 120. And then we have received the order of over Rs. 100 crores from the South African tender which we had announced in February. With that addition, we have come to 209. What about the Tanzania order that we have received for Rs. 65 odd crores? That is not included in this? The Tanzania orde
Q
Thank you all for attending this fourth quarter and full year earnings conference call. And I would like to thank all our shareholders for supporting Cupid and through both thick and thin years during our operations. And we would like also to thank our customers who have shown confidence in the quality of Cupid products through their repeat orders. Many of them have been our customers for over 10 years. And also, I would like to thank all Cupid employees for working diligently throughout the year for the improvements of Cupid. In the end, I would like to assure all of you as our shareholder th
Management
Speaking time
Om Prakash Garg
58
Onkar Ghugardare
28
Yogansh Jeswani
15
Prashantkumar H
11
Moderator
10
Prashant Kale
4
Saurabh Karmase
2
Binay Sarda
1
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Opening remarks
Binay Sarda
Thanks, Rutuja. Good evening to all of you and thanks for joining this Q4 and full-year FY22 earnings call for Cupid Limited. We have mailed the results and Presley's to you. I hope you have received the same. We have also uploaded this on our site and the stock exchanges to discuss the results and address the equities of the investors we have with us, Mr. Om Garg – Chairman and Managing Director of the company. Along with him we have Mr. SaurabhKarmase – Company Secretary and Compliance Officer. Mr. Garg will give a brief overview of the quarter gone past and then we'll open the floor over to Q&A session. I would like to remind you that everything said on this call that reflects any outlook for the future or which can be construed as a forward-looking statement, must be viewed in conjunction with the uncertainties and the risks that we face. These uncertainties and risks are included, but not limited to what we have mentioned in the prospectusfiled with SEBI and subsequent annual repo
Om Prakash Garg
Thank you Binay. Ladies and gentlemen on behalf of CupidLimited, I would like to thank you for joining the Quarter 4 FY22 and the full year FY22 results for Cupid Limited earnings conference call today. I hope by now you have seen the results we had circulated last night. Without going into details, I will just mention a couple of salient points about the results. First of all, we managed to deliver a healthy performance in spite of some external factors. Further the top and bottom line of the company results were impacted by higher input costs and also the lower percentage of high margin female condoms during the quarter and the year. Furthermore, the results were also impacted by a long delay in the publication of three year South African tender results from October 2021 until February 2022 that five months delay in the publication of results and the awards for this year contracts influence our lower performance in terms of female condom sales during the year 2022. Going forward, we
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