CUPIDNSEQ3FY202430 January 2024

Cupid Limited

5,866words

155turns

7analyst exchanges

0executives

Key numbers — 40 extracted

Rs. 40

ver a couple of highlights from the 3rd Quarter Results. The revenue from the operation was about Rs. 40 Cr which was 16% higher than the second quarter of FY24. And in terms of the net profit after tax,

16%

lights from the 3rd Quarter Results. The revenue from the operation was about Rs. 40 Cr which was 16% higher than the second quarter of FY24. And in terms of the net profit after tax, we were 73% hig

73%

was 16% higher than the second quarter of FY24. And in terms of the net profit after tax, we were 73% higher as compared to the second quarter. The one main point to note here is that the sale of fem

Rs. 1

the second quarter. The one main point to note here is that the sale of female condoms were only Rs. 1 Cr during the 3rd Quarter because of the major breakdown in the laboratory apparatus back in South

Rs. 50

st had gone up to 23 Cr. Now looking at the 4th Quarter: We are projecting a topline of between Rs. 50 and 55 Cr and female condom sales are expected to be approximately Rs. 21 Cr. Now, in terms of the

Rs. 21

ng a topline of between Rs. 50 and 55 Cr and female condom sales are expected to be approximately Rs. 21 Cr. Now, in terms of the exports, 89% of our sales were exported during the 3rd Quarter and only 1

89%

and female condom sales are expected to be approximately Rs. 21 Cr. Now, in terms of the exports, 89% of our sales were exported during the 3rd Quarter and only 11% were in the domestic market which

11%

Cr. Now, in terms of the exports, 89% of our sales were exported during the 3rd Quarter and only 11% were in the domestic market which included both the B2C sales as well as the sales of the IVD kit

Rs. 385

split of 10 to 1 and the third is issuance of nonconvertible shares to FIIs raising approximately Rs. 385 Cr. So without further delay, I would like to now open the conference call for the Q&A session.

Rs. 385 crore

Onkar Ghugardare: My question is regarding the warrants which you have issued to the FIIs around Rs. 385 crores. As you have already highlighted that you don't need any money outside, whatever money which i

Rs. 140

ime, the board who issued the ESOP, which Mr. Om Garg was a part of, decided an exercise price of Rs. 140 and post that we don't want to change the ESOP in any way shape or form because there's been no ma

50%

an agreement from the existing people we've issued the warrants to that they'll be letting go of 50% of the issuance and we'll be redistributing them to more employees within the company. Onkar Gh

Guidance — 20 items

Omprakash Garg

“Or a timeline, but all our preferential issuances, the funds which we are supposed to get will be received within 18 months.”

Onkar Ghugardare

“Okay, so maybe we can expect something in maybe a year or two, right?”

Aditya Halwasiya

“Simultaneously it will give us some faster approvals for our IVD segment and because the target company has all those approvals and apart from this I can't share anything else.”

Aditya Halwasiya

“So we are making many strives and jumps to make sure that we are able to garner sales and forward looking numbers going forward to the best of our efforts.”

Aditya Halwasiya

“None of them will be holding 5% or more.”

Onkar Ghugardare

“Okay, so you will be issuing around 22 lakh shares.”

Onkar Ghugardare

“So around how much equity dilution we can expect and like what is the percentage of this, like which fund is giving how much money to you?”

Aditya Halwasiya

“We will be sharing the names in the coming disclosures and each fund will be having a dilution of 2% to 3%, like having an expendable share ownership of 2% to 3%.”

Onkar Ghugardare

“So you will be making a disclosure about that, right?”

Aditya Halwasiya

“Like, you can do the math, like 22 lakhs shares will be added to our pool of Rs.”

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Q&A — 7 exchanges

My question is regarding the warrants which you have issued to the FIIs around Rs. 385 crores. As you have already highlighted that you don't need any money outside, whatever money which is there in the balance sheet is sufficient for expansion of the new facility. So would like to know exactly what's the purpose of raising this Rs. 385 crores. I mean you would be saying that for future need and all that but I would like to know the exact reason for this. Any acquisition you are planning or anything else?

Aditya Halwasiya

We are looking at using a very small portion of these funds for working capital requirements. That is something I can definitely mention but other than that we’re looking for a strategic acquisition outside India also, if not in India. And we'll be earmarking these funds for that purpose. So, this acquisition is related to the business which you are currently doing in terms of condoms or IVD or anything else apart from this you are targeting? Condoms and IVDs. Okay, includes both, right? Condoms and or IVDs, yes. Okay, when can we hear about this? I mean, any specific timeline you would be abl

What is the current order book of the company and can you please split it out in terms of domestic and international market?

Aditya Halwasiya

So the current order book is Rs. 80 crores. And for the domestic and international split, it would be 88% international and 85% to 90% international, 10% to 15% domestic. In terms of revenue, how much do the other reproductive health care products of the company contribute? We just have one product in our segment that is pregnancy test kits which is known as Cupisure and other than that, we are in the contraceptives segment in male and female condoms. What is your competitor profile for IVD? Well, we have several test kits. We have eight test kits at least, which we are currently going, tracin

I have two questions. First is on this retail distribution that we are planning in the Indian domestic market. So can you please elaborate on what all has been done in this area until now, and what are the plans so far? Can you give some details on how we are going about building the retail foray?

Aditya Halwasiya

Regarding the retail foray, we have right now as a sales team in pan India from all the (Inaudible) 28:24 we have zonal managers, we have area sales managers, we have sales executives, and they end up selling our product to all the different geographies in India. We have representatives in the north geography populated over there because they are very well versed because of the education levels of the customers over there is very high. So they're able to sell more products. Simultaneously we have our zonal and area sales managers, in our east and west the product distribution is different. In

Thank you so much for the great sort of guidance that you have been giving us for so long. I have two particular questions. One is on our operating margin. As you just mentioned that we would be increasing our sales rates now in the coming 2 to 3 quarters, what do you think our operating margins are going to be especially given that you would also have million capacity of your condoms?

Aditya Halwasiya

So our operating margins, as you can see, are in the low 20s if you see year-on-year. We will be working towards getting them to 25% yet as we scale. So our current this quarter's margin were around 31.5% of which….. When you mean to say operating margins, you're mentioning EBITDA? Correct. Yes, I'm sorry. I was talking about PAT margins. The EBITDA margin is 30.33% 35:56_____. Looking to get our PAT margins up over and above 25%. And our EBITDA margins will be, it will be better if we keep it above 35%. Well, my second question is on the cash conversion cycle. So I mean, in the last concall,

You mentioned that current order book is around Rs. 80 crores. What's the split between female and male condom and till when you have to execute this Rs. 80 crores?

Omprakash Garg

Out of the Rs. 80 Cr order book, Rs. 30 Cr is for female condoms and Rs. 50 Cr for male condoms. And by when we have to execute this order? We are expecting some new orders in February from South Africa, Brazil and Government of India. And this South Africa, Brazil and Indian government orders are for female condoms or male condoms or both? South Africa, we are expecting both female and male condoms. From government of Brazil, we are expecting female condom orders. And from government of India, we are expecting male condom orders. We have our regular customers from UNFPA and private sector as

Quantified in revenue and profitability terms, what are we expecting from the capacity expansion announced by the company in December?

Aditya Halwasiya

So in terms of the revenue expansion, we've already made a press release regarding it. We are expecting a top line of not $320 crores, but close to $400 crores, post finishing up with our expansion plan. And simultaneously we're expecting an EBITDA of upwards of $100 crores.

As we come to the end of this earnings call, I want to take a moment to extend my deepest gratitude to all our shareholders and employees. To our shareholders, thank you for your continued trust and investment in us. Your faith in our potential, use our drives to innovate, expand and excel. We are committed to delivering on our promises and maximizing the value of your investment. You are an incredible team of employees. Your hard work, creativity and perseverance are the reasons we are able to celebrate our achievements today. Each of us plays an integral role in building our future. And I'm

Management

Speaking time

Aditya Halwasiya

Onkar Ghugardare

Omprakash Garg

Moderator

Chandra Gupta

Dikshant

Sharad Parke

Rakesh

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Opening remarks

Omprakash Garg

Thank you. Ladies and gentlemen, on behalf of Cupid Limited, I would like to welcome you all for attending the Q3 FY24 Earnings Conference Call today. By now, I assume that most of you have seen the “Financial Results” along with the “Press Release” we had published yesterday. I will go over a couple of highlights from the 3rd Quarter Results. The revenue from the operation was about Rs. 40 Cr which was 16% higher than the second quarter of FY24. And in terms of the net profit after tax, we were 73% higher as compared to the second quarter. The one main point to note here is that the sale of female condoms were only Rs. 1 Cr during the 3rd Quarter because of the major breakdown in the laboratory apparatus back in South Africa, resulting in delays, significant delays in the export of female condoms. And because of that, we had to stock piling that material at our factory in Nasik. The net result of that was that our inventory level as of December 31st had gone up to 23 Cr. Now looking a

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