ravijain88
the cost and selling price of FCHO female condom can be found in the below article and it comes near to 15 -17 Rs and selling price near to 35- 37 Rs.
can u please elaborate how you arrived at the cuipd’s cost of female condom at 4 Rs and selling price at 24 Rs as it will give a margin of 500% which is
not realistic and also not reflecting in profit figures.
Requesting other board members to throw some light on the cupids female condoms cost price and selling price .
vijay
Let’s see if promoters give any clarification tomorrow and if they don’t then we should press charges against him in SEBI for share manipulation by coming openly on TV
After speaking to Mr.Garg I got to know that the product approvals take time and generally range from 2 to 3 years(without accounting for the time taken in product development). The capital required for product development is just 6 cr. So capital is not an issue for a new entrant or an existing business..however, would an existing business with lots of capital want to spend so much time on approvals? Wouldnt they rather acquire a small company like Cupid? Secondly, the market is too small for these big players to even concentrate on right now..by the time they, Cupid may well have established its position in the market.
Secondly you have mentioned cost advantage as a moat..How does Cupid have this advantage..what is the source of this advantage? I recall reading cheap labor as a source..I doubt that since its hard to believe that it is such a labor intensive industry..I saw the annual reports of FCH and compared the gross and operating margins..The gross for Cupid is in early 60s while for FCH its 58..shouldnt rubber be cheaper in Malaysia? FCH didnt give break up of its operating costs so couldn’t figure out the expenses on labor..I am struggling to understand the reason for low cost
Still believe, they need to be consumer facing but the management lacks the marketing DNA so licensing it could be an alternative..
Disc:invested
Mr Garg indicated that capacity will not be a constraint for the company and will increase it gradually to 40 mn by FY17 (Capex of ~2cr) as compared to current capacity of ~20-25 mn.
An important thing to note is that company is expected to have profit of 18-20 cr in FY16E with the sales of ~15 mn pcs. So if they reach to 40mn pcs in let say FY18, profit could be ~40-50cr.
Note: Invested and Views could be biased.
Quite puzzling.
40.0L shares is too high! The promoters had 1.26Cr shares out of which closed to 50% was pledged. Now how can they sell 30% of their holdings? That will bring down their ownership to below 20%
Thanks Ravi for the information. Do we have exact idea on the current capacity of cupid and capacity expansion plans for next 3-5 years. I mean what is the readiness of the company if it gets sudden potentially large orders?
‘considering that we are in a secular bull market.’
A secular bull market is bull. These ideas are floated by ‘market experts’ who refuse to see beyond their nose. Please do not believe such stories especially as it is clear now that the global economy is not in great shape.
Hello Guys,
It good to hear about acceptence of Cupid in Zimbabwe as it is very large market with annual demand of ~ 5mn pcs and if cupid get the order it will be very positive for the company.
Source for Annual Demand in Zimbabwe: http://zimbabwe.news24.com/Regional-News/R35bn-tender-was-not-condomwise-20151012-2
Competition: Currently, there are followings players in the industry:
Based on the above points i think, Cupid has very limited competition in the medium term and can get various orders going forwards due to favorable response for its product and cost advantage.
Valuation: As far as Valuations are concerned, its trading at ~25x FY16E and is not expensive looking at a) Growth Potential b) Moat (Cost Advantage) c) Oligopoly Industry d) High ROE and Dividend Yeild.
So as i mentioned few days back, patience to hold would be key here.
Note: Invested and Views could be biased.
A good analysis. I must say you have taken pains to collate and analyse. Thank you
Thanks for sharing your valued viewpoint. Our posts crossed.
Please stay true to that spirit, and respond further why Company Q&A Section – is not the best place for idea generation exercises mentioned.
Perhaps some new members are not aware of the utility and purpose of the different sections. But VP old-timers certainly are.
Stock Opportunity is serious business. No slack allowed here.
Company Q&A – is free-format. Use as light or as heavy information/base analysis as you want.