CUPIDNSEMay 29, 2023

Cupid Limited

8,479words
219turns
12analyst exchanges
2executives
Management on call
Omprakash Garg
CHAIRMAN AND MANAGING
Yash Savla
KIRIN ADVISORS
Key numbers — 40 extracted
34%
ter, but also for the entire FY '23. For example, in the fourth quarter, our top line improved by 34%, as compared to a year ago quarter and also the bottom line actually improved by 99%, as compared
99%
improved by 34%, as compared to a year ago quarter and also the bottom line actually improved by 99%, as compared to a year ago quarter. And now talking about the full year performance, our top line
INR164.1 crore
compared to a year ago quarter. And now talking about the full year performance, our top line at INR164.1 crores improved by about 19%, as compared to a year ago. However, the profit after tax improved by abou
19%
nd now talking about the full year performance, our top line at INR164.1 crores improved by about 19%, as compared to a year ago. However, the profit after tax improved by about 82%. Now these signif
82%
improved by about 19%, as compared to a year ago. However, the profit after tax improved by about 82%. Now these significant improvements have been achieved by better operating efficiency, as well
INR177 crore
ecting more tender orders from Brazil, as well as Tanzania. Right now, our order book stands at INR177 crores, as of April 1. And as we had mentioned in the press release, the Cupid Board has declared a fin
INR3
1. And as we had mentioned in the press release, the Cupid Board has declared a final dividend of INR3 per share, making it a total of INR5 per share for the entire financial year. This is the best eve
INR5
ss release, the Cupid Board has declared a final dividend of INR3 per share, making it a total of INR5 per share for the entire financial year. This is the best ever dividend your company has declared
94%
ell as bottom line during its entire 30-year history. Number two, the export business revenue was 94% of the total revenue. And as you are aware, there are some export incentives from Government of I
10%
emand for our products, mainly male and female condom, we are expecting another good year, almost 10% to 12% improvement in the current financial year ending on March 31st, 2024, as compared to this
12%
or our products, mainly male and female condom, we are expecting another good year, almost 10% to 12% improvement in the current financial year ending on March 31st, 2024, as compared to this year.
INR57 crore
For example, our top ranking customer is United Nations Population Fund to whom we had sold about INR57 crores worth of goods during FY '23. And similarly, we have six or seven other customers, who have been
Advertisement
Guidance — 20 items
Onkar Ghugardare
qa
“So how much you intend to complete entire order since you said around 10%, 12% revenue growth, which implements to around INR180 crores of the revenue.”
Omprakash Garg
qa
“So we expect a minimum top line of INR175 crores, and out of which 75% would be male condoms, 23% would be female condom sales and 2% others.”
Onkar Ghugardare
qa
“I mean, is there anything we can expect qualitatively?”
Onkar Ghugardare
qa
“So around -- from 560, you will be looking at around how much around 7 lakh or like how much?”
Keshav Garg
qa
“And last quarter, you had told us that in for the FY '24 to expect INR50 crores to INR100 crores revenue.”
Keshav Garg
qa
“What kind of losses shareholders can expect, which we were expecting anywhere from day 1 and yes, sir.”
Omprakash Garg
qa
“The IVD project, as I had mentioned earlier was delayed by 2.5 years due to COVID.”
Keshav Garg
qa
“Sir, so what kind of losses can we expect for this year and next year?”
Keshav Garg
qa
“Sir, so is it not wiser to just scrap this project and whatever space we will get available, we can at least start producing more condoms, which is making money for us.”
Omprakash Garg
qa
“So it will be, in our view, would function as a standalone operation.”
Risks & concerns — 4 flagged
So the ball is in their court and very difficult for us to be more precise on what their thinking is.
— Omprakash Garg
And based on their risk analysis, they have decided to stop the orders already given to Cupid.
— Omprakash Garg
Sir, so realistically speaking, things look really weak.
— Keshav Garg
So it's difficult to put a final number on the evaluation.
— Omprakash Garg
Advertisement
Q&A — 12 exchanges
Q
Yes. My question was regarding the INR177 crores orders, which are there with you. So how much you intend to complete entire order since you said around 10%, 12% revenue growth, which implements to around INR180 crores of the revenue. And what would be the contribution from male and female impact? First question is that.
Omprakash Garg
Okay. So we expect a minimum top line of INR175 crores, and out of which 75% would be male condoms, 23% would be female condom sales and 2% others. Okay. The next question is regarding -- there were some talks about you have been approached by 2 other players for sale of the business. Any update on that front? Basically, the negotiations are still going on, and there is no final decision, as yet on that. But what would be the timeline, if any, you can give? I would say in the next 6 months. So are the talks still going on? I mean, is there anything we can expect qualitatively? Or like what kin
Q
Sir, what happened to Tanzania, male condom tender of INR75 crores, which is expected to open in March '22, and also the Brazil tender. So have these tenders already been opened, or they are still awaited?
Omprakash Garg
No. The March tender from South Africa has been postponed and now it is supposed to be next week, i.e., 1st week of June. And another order female condom tender from Brazil is expected to be announced also during the later part of June. Some of the tenders have been delayed due to the budgetary control from their respective national governments. Okay. Sir, so now we are anyway capacity constrained, sir so -- and on the other hand, sir, this IVD division, it is year-on-year, actually, the sales have gone down from INR3.7 crores to INR40 lakhs in the whole of last year, whereas the loss has shot
Q
Sir, I just wanted to understand like how is the Indian market, as well as the contraceptive industry is concerned?
Omprakash Garg
The Indian market for condoms, particularly for male condoms is growing. And the only issue is that there are 4 or 5 low-capacity manufacturers, who are offering their products at a much lower price. So the bottom line for the sale of male condoms in India is lower than what we achieved in our export sales. So market itself is good, but profits are much lower. And what is the difference in the margins in the international market and in the Indian market? So in Indian market, you can expect 5% to 7%, and in the export market, minimum 15%, more like 20%. Okay. Sir you mentioned in your opening r
Q
Nothing. I think my questions were answered. Most of the questions were already included here.
Management
Q
Sir, congratulations on a decent set of numbers and best of luck for the next year. Sir, my 2 questions are about the IVD segment, sir. The capacities we have set up, what kind of peak turnover are possible in that segment? And do you expect to achieve it in the next 3 years to 5 years, sir?
Omprakash Garg
Okay. We expect to do, like I mentioned, INR5 crores worth of IVD sales in FY '25, and INR50 crores to INR100 crores starting from FY '26, I mean 2026 because of the 2 qualifications I mentioned earlier, i.e., a WHO approval; and second is the qualification that we have been in the manufacturing business for 3 years. So based on those 2 factors and based on our current capacity, we can achieve a sale of about INR100 crores after FY ‘26. And sir, I would also want to ask you whether -- see, any product extension you are looking at because making these latex gloves is, I think, a part of the pro
Q
Yes. Last call, you have mentioned -- you had mentioned that the U.S. FDA is telling you to conduct studies in U.S. for the approval of female cons. So what's the status on that front?
Omprakash Garg
Okay. U.S. FDA has suggested some modifications, and they have recommended that the population base we had used in South Africa was almost 100% black and US FDA has suggested a supplementary study including about 60% white people in South Africa, 30% black population and 10%, Asian Indian population. So we are gearing for that new study. But in general, we had a positive response from US FDA that at least one other manufacturers like Cupid is trying to get into this field. As you know, currently, there is only one product, which has had monopoly since 2009. So FDA would also like to see a comp
Q
Congratulations on a good set of numbers. Sir, in a previous question, you had told that there was a price increase of 6% in natural rubber latex. But in last conference call, you had told that you had an inventory hold up of at least six months. Then why is there a sudden spurt in raw material cost this quarter?
Omprakash Garg
No. like I mentioned, all the raw material costs have been stable or downward. The only exception is Latex, that starting January this year, there have been a slight increase, 2% to 3%, which has moved up to 6% in this month, during month of May. And this is a seasonal variation depending on the rainfall timing related to the monsoons in Kerala. So we believe this is a temporary phenomenon. And after the rain starts in early June, the prices should go back to its normal direction. Okay. So sir, can you brief us about the current inventory hold up, which you are having? We only hold inventories
Q
Yes. My question was regarding the second level management, and why only we see only Mr. Omprakash Garg on the call every time? Why the second level management doesn't come? And what's your plan on succession?
Omprakash Garg
Well, we had in the last 3 calls, we had the Chief Operating Officer also joining me in the con call. And in terms of succession, we have a completely second and third line of management, including 10 senior managers, who are with us for more than 12 years to 15 years. So the only change would be a new CEO. And depending on the possible deals, we are discussing, there is no other succession planned. Yes. But the CEO thing has been going on for last 3 years, 4 years, right, and you haven't found any one? Yes. The reason is that there is nobody qualified for this particular manufacturing job, in
Q
Sir, just to continue with what the other participant was mentioning. So when you have a -- when you had discussion with the two gentlemen or the two people, sir, they have been zeroed in money, as we come across the valuation part or -- and how will you value your company in terms of the type of sales growth that we have seen is only being observed for the last -- last two years, if I take your net sale number from INR143 crores to INR133 crores and now that leap jump in from INR132 crores to INR160 crores. So what factors are you keeping in mind in -- when you come on across the table to dec
Omprakash Garg
Well, we are concentrating on improving the performance at the company. Now in terms of valuation, everybody has their own method and their own priorities and their own thinking. So you may be evaluating it a PE of 15 and somebody has maybe thinking of PE of 18. So it's difficult to put a final number on the evaluation. But for the deal to go through sir, there has to be implementation or there has to be a zero in point, where both the buyer and the seller thought has to submerge to control the transaction. So taking that into account since we have got the pillars from them, how has -- how are
Q
Sir, there is a decrease in sales of lubricant water-based jelly. So what are the plans for the current year? Will it be same? Or will we see some growth coming ahead?
Omprakash Garg
No. Like I mentioned, the lubricant sales this year will be less than last year because of the quality issue, which we are having discussions with the UN FPA, but that should be fixed in 3 months to 4 months. So I would say FY '24 will be a maximum of INR10 crores sales and FY '25 will be major expansion about INR30 crores sales of lube we are expecting.
Q
Thanks, everyone, for joining the conference call of Cupid Limited. If you have any queries, you can type to us at research@kirinadvisors.com and vastupal@kirinadvisors.com. And once more, thank you, everyone, for joining the conference.
Management
Q
Right. Thank you.
Management
Speaking time
Omprakash Garg
102
Onkar Ghugardare
63
Saket Kapoor
17
Moderator
13
Keshav Garg
6
Zaki Nasser
6
Yashwanti Khedkar
5
Shivam Parakh
4
Yash Savla
2
Ranu Parwal
1
Advertisement
Opening remarks
Yash Savla
Okay. Thank you. Good afternoon, everyone. Thanks for joining the conference call of Cupid Limited. I would like to welcome, Mr. Omprakash Garg, Managing Director and Chairman. Omprakash, sir, over to you.
Omprakash Garg
Thank you, Yash. Good afternoon, ladies and gentlemen. On behalf of Cupid Limited, I would like to welcome you all for attending the Fourth Quarter FY '23 and the Full Year FY '23 Earnings Conference Call for Cupid Limited today. By now, I hope you had a chance to review the financial results we had circulated yesterday after the Board meeting. And I am pleased to report that the financial performance has improved significantly, not only in the fourth quarter, but also for the entire FY '23. For example, in the fourth quarter, our top line improved by 34%, as compared to a year ago quarter and also the bottom line actually improved by 99%, as compared to a year ago quarter. And now talking about the full year performance, our top line at INR164.1 crores improved by about 19%, as compared to a year ago. However, the profit after tax improved by about 82%. Now these significant improvements have been achieved by better operating efficiency, as well as because of the stable input costs, a
Advertisement
← All transcriptsCUPID stock page →