Looks like few institutions have started accumulating it and its time to Sit Tight. Few observations about the company.
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Its operating in oligopoly industry having huge scalability.
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Has assets light model with 60%+ ROE and potential high dividend yield in future
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Has high Moat as it is highly cost competitive with cost price as low as 25% of its only competitor (FHC). Operating cost is also significantly lower.
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Promotor is an intelligent fanatic with very sound Knowledge about industry and looks to be an honest person
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Growth ahead: Female Health Company(FHC) sells ~60 mn units and cupid current rate is ~15 mn. Cupid is in the process of doubling its capacity to 40 mn and looking at its cost competitiveness & market penetration, it is quite possible that cupid may be able to reach to the annual run rate of 40 mn units in 3-5 year time. Profits could be higher than sales growth due to higher margins in FC, management efforts to increase automation & efficiency, operating leverage etc.
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Valuation:Still trading at just 20x FY16E with zero institutional holding. We all know that if market starts believing in the growth story with excellent return ratio. PE multiple has no limits (e.g Eicher, Page, etc)
So Patience to Hold would be key in this story.
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