CUPIDNSEQ1 & Fy 2023August 10, 2022

Cupid Limited

3,031words

66turns

8analyst exchanges

3executives

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Management on call

Om Garg

CHAIRMAN & MANAGING DIRECTOR - CUPID LIMITED

Durgesh Garg

CHIEF OPERATING OFFICER - CUPID LIMITED

Binay Sarda

ERNST &YOUNG

Key numbers — 24 extracted

rs,

our website and the stock exchanges. To discuss the results and address the queries of the investors, we have with us Mr. Om Garg, Chairman and Managing Director of the company along with him we have

Rs.187 Crore

of orders. In any case, we have been doing quite well considering we have a strong order book at Rs.187 Crores as of July 1, 2022 and also, our new orders have been coming in regularly, most of them repeat or

50%

unter sales as well as through prescription businesses and the market margins would be better than 50% on the sale, and right now, we do not have a precise estimate, but we are looking at a minimum of

3 million

sale, and right now, we do not have a precise estimate, but we are looking at a minimum of $2 to $3 million business in the first year. Jyoti Basu: Thanks. That is all from my side. I will join the questio

Rs.30 Crore

ndoms for this year and next year? Om Garg: For this FY2023, we are looking at a minimum sale of Rs.30 Crores for female condoms and for FY2024, we are still in the process of computing the numbers. We are e

40%

jelly business? Om Garg: Yes, jelly business, we have improved the performance and our margin is 40% to 45%. We are expecting Rs.10 Crores to Rs.15 Crores jelly business this year, FY2023. Saurabh S

45%

business? Om Garg: Yes, jelly business, we have improved the performance and our margin is 40% to 45%. We are expecting Rs.10 Crores to Rs.15 Crores jelly business this year, FY2023. Saurabh Shroff:

Rs.10 Crore

s, jelly business, we have improved the performance and our margin is 40% to 45%. We are expecting Rs.10 Crores to Rs.15 Crores jelly business this year, FY2023. Saurabh Shroff: Okay. Thank you very much sir.

Rs.15 Crore

s, we have improved the performance and our margin is 40% to 45%. We are expecting Rs.10 Crores to Rs.15 Crores jelly business this year, FY2023. Saurabh Shroff: Okay. Thank you very much sir. Moderator: Th

Rs.5 Crore

s in July, we do not have any precise estimate, but our expectation is that minimum sales would be Rs.5 Crores in FY2023. Of course, we would be trying even to get the export business started as well, but we

Rs.8

t 2022 was Rs.187 Crores and it is improving all the time. We have been getting orders worth about Rs.8 Cores in the last quarter as well and also, some more tenders are likely to be published where we e

2.5%

there was a company called Greenmate Corporation, South Korea, which was holding a decent, I think 2.5% to 3% shareholding in the company and that name does not seem to be appearing in the shareholding

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Guidance — 14 items

Om Garg

opening

“We are hoping to get this recommendation in about six to nine months, and if that happens, we would be looking at additional revenue in FY2024, which could be a big boost to both our top and bottom line as Cupid will be only the second female company to market its product in the US, which as you are aware is a huge market and also profitable at that.”

Jyoti Basu

“What kinds of margin we shall expect from USFDA and if you are going for production means, we have to go for CapEx, do you have any plans?”

Jyoti Basu

“What kind of margin shall we expect from USFDA, any view on that or if we are having any orders, like that means, we have to go for additional CapEx or do we have any backup plans?”

Saurabh Shroff

“So, if you could maybe just help us understand, how you see this playing out over the next three, four quarters and obviously the USFDA approval you clarified that you expect in six to nine months, so can you chart that out for us please?”

Saurabh Shroff

“Okay, so what is your current expectation for the female condoms for this year and next year?”

Om Garg

“We are expecting of course, it will be higher than Rs.30 Crores, but we do not have any precise estimate right now.”

Panjul Agrawal

“I wanted to ask how much revenue can we expect from this business?”

Om Garg

“We have been getting orders worth about Rs.8 Cores in the last quarter as well and also, some more tenders are likely to be published where we expect to participate.”

Om Garg

“So, we are hoping that the order book will grow as we move forward into the year.”

Om Garg

“So currently, we do not have any immediate plans for further capital expenditures either this year or next year as of now.”

Q&A — 8 exchanges

Thank you for accepting my questions. Congratulations for having a good set of numbers, and I’ve been constantly tracking, getting some good order book in the pipeline. So, only two questions I am having. What kinds of margin we shall expect from USFDA and if you are going for production means, we have to go for CapEx, do you have any plans?

Om Garg

Sorry, could you please repeat the question. Your voice was not clear. Okay. What kind of margin shall we expect from USFDA, any view on that or if we are having any orders, like that means, we have to go for additional CapEx or do we have any backup plans? That is all my question. In US, we are planning to distribute our products through over-the-counter sales as well as through prescription businesses and the market margins would be better than 50% on the sale, and right now, we do not have a precise estimate, but we are looking at a minimum of $2 to $3 million business in the first year. Th

Good afternoon Sir. I just wanted to clarify your initial comments on the female condom products, why the sales were lower this quarter and how you see this ramping up as the year progresses?

Om Garg

I am sorry, could you please repeat the question? Sure. I just wanted to get clarity on your initial comments on the sales of female condoms for this quarter, you said that they were impacted because of a couple of reasons like the depreciation of the South African Rand and some approval that you mentioned. So, if you could maybe just help us understand, how you see this playing out over the next three, four quarters and obviously the USFDA approval you clarified that you expect in six to nine months, so can you chart that out for us please? Yes, as I mentioned, the first quarter female condom

Hello sir. I wanted to ask about our IVD facilities, the commercial activity have begun. I wanted to ask how much revenue can we expect from this business?

Om Garg

Okay. Since we have just initiated the commercial activities in July, we do not have any precise estimate, but our expectation is that minimum sales would be Rs.5 Crores in FY2023. Of course, we would be trying even to get the export business started as well, but we do not have a precise number right now. Okay. Sir, where does the order book stand for this? Have you built the order book? The order book as on July 1st 2022 was Rs.187 Crores and it is improving all the time. We have been getting orders worth about Rs.8 Cores in the last quarter as well and also, some more tenders are likely to b

I just wanted to know if you are aware of any institutions reducing their shareholding, in particular, the Greenmate Corporation, South Korea. They still have a significant holding, I do not see their name on the shareholding pattern anymore and also, any update on an acquisition or a sale which we discussed in the last quarter?

Om Garg

Could you please repeat the first part of your question? The first part was, there was a company called Greenmate Corporation, South Korea, which was holding a decent, I think 2.5% to 3% shareholding in the company and that name does not seem to be appearing in the shareholding pattern anymore. Is there any update on an exit from them or is it just a different way of reporting? No. In fact, what has happened is that they were one of the original investors in Cupid, but over the years, about 10 years ago, they went belly-up and they had declared bankruptcy. So, according to the SEBI rules, afte

Hello Sir, actually, do you have any expansion plans and also additional CapEx for the coming quarter or for this financial year?

Om Garg

Right now, we do not have any expansion plans for this year and next. The main reason is that last year, we had expanded our condom production capacity from 400 million pieces per year to 560 million pieces per year, and also, last year and this year, we have entered into this new business vertical of IVD kits. So currently, we do not have any immediate plans for further capital expenditures either this year or next year as of now. Sir, you are talking about for IVD also. Am I right? No. I am talking about expansion within Cupid Limited in general, total Cupid. Okay Sir. What is the capacity u

Sir, last time you mentioned that you are seeking some professional opinion about buyback; number one, and number two, what is the cash position of the company now?

Om Garg

Okay. We did have discussions with a consultant on buyback and the conclusion was that this year, we are not going to go for the buyback and the reason being that our working capital requirements both for the condom business as well as for the IVD business may be as high Rs.30 Crores to Rs.40 Crores; however, we will take the necessary action at the appropriate time and our cash position including the reserves in the bank and other investment stands at Rs.84 Crores as of July 1, 2022. So, we have improved our cash position as compared to last quarter and certainly as compared to a year ago, so

Thank you for taking my followup. Sir can you help us understand what our marketing strategy and plan is for the IVD products?

Om Garg

Okay. We are working on two fronts for IVD marketing. For export business, we are contacting major Department of Health in big African countries like South Africa, Kenya, Mozambique, Nigeria, Democratic Republic of Congo, and we already have contacts in these countries. So, we have circulated all the brochures and samples of our products to these countries and we are leaning about their requirements in the coming six to nine months. In terms of domestic market, we have been in touch with distributors in several states and also, recently we attended a technical conference in Chennai dealing wit

Thank you Binay and thank you every one. I would like to thank all the participants for attending this earnings conference call today and also, I would like to thank all the other shareholders who have stood by Cupid Limited over the years through good and bad times. Further, I like to thank our customers, many of whom have given us repeat orders again over the years and last but not least, I would like to thank all the employees of Cupid Limited who have worked diligently throughout the year to make Cupid, a profitable company and in the end, I would like to mention that we are expecting a ve

Management

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Speaking time

Om Garg

Saurabh Shroff

Moderator

Jyoti Basu

Anandbir Singh

Panjul Agrawal

Vijay Kumar

Binay Sarda

Opening remarks

Binay Sarda

Thanks Lizann. Good evening to all of you and thanks for joining this Q1 FY2023 earnings call for Cupid Limited. We have mailed the results and press release to you. I hope you have received the same and we have also uploaded this on our website and the stock exchanges. To discuss the results and address the queries of the investors, we have with us Mr. Om Garg, Chairman and Managing Director of the company along with him we have Mr. Durgesh Garg, Chief Operating Officer. Mr. Garg will give a brief overview of the quarter gone past and then we will open the floor 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 forward-looking statements 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 prospectus filed with SEBI and subsequent annual report, which you can find on the

Om Garg

Thank you Binay. Good evening, ladies and gentlemen. On behalf of Cupid Limited, I would like to welcome you all at the first quarter FY2023 earnings conference call for Cupid Limited today. I hope that by now, you had a chance to go through the press release and the statement we had issued last night after the directors meeting. Some of the highlights during the quarter were that the sale of female condom was less due to delayed arrival of lab results and also due to the non-availability of containers during the quarter. Also, we had some external challenges as well, including the supply line issues as well as the depreciating South African Rand, which impacted their frequency of orders. In any case, we have been doing quite well considering we have a strong order book at Rs.187 Crores as of July 1, 2022 and also, our new orders have been coming in regularly, most of them repeat orders from UNFPA and other private customers. I would like to point out two items. Number one is that duri

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