CUPID LTD. - BUY and be 'SAFE'

Today I am going to suggest you a stock which is from a very niche segment of Personal products industry.

The company name is CUPID LTD. and listed only on BSE at CMP of Rs.58.

Brief introduction of company-

CUPID LTD. manufactures Male & Female condoms of different varieties, flavours and colours and are sold under different brand names.

CUPID is the only company from India which manufactures FEMALE CONDOMS and also among very few companies in the world to have certifications to sell this product.

CUPID Ltd. has a well equipped R&D center located alongside to its main production facility and is actively involved in research related to HIV/AIDS prevention technology like female condoms

The company was founded in 1993 in collaboration with GREEN MATE BIOTECH CORP. and HERO CORP., both from South Korea. The company has its registered office at Mumbai and State of the art manufacturing facility at MIDC Sinnar, Nashik (@ 200 km from Mumbai).

This modern facility has a current capacity of 400 million pieces of Male condoms and 15 million pieces of recently developed Female condoms per annum.

Unique selling proposition-

1) For selling these kind of products, any company has to comply highly stringent international quality standards and obtain certifications meeting those standards across different countries. Thus there are reasonably high entry barriers in this industry. Rather, this is the first step for start of sales.

CUPID has obtained all those credentials and is a market leader. Recently the company is pre-qualified by WHO/UNFPA for supply of Male / Female condoms.

2) Female condom is a new invention and is gaining wide acceptability across world specifically the African & European countries. Govt. of India and CSIR have also given their nod for use of Female condoms. CUPID has captured the international markets with over 70% of its revenues coming from exports. While, it is all set to gain an early mover advantage in India.

3) Developing countries like China, India, Brazil and S.A. are drastically increasing their spends on Healthcare and Family planning. This gives a policy boost to this sector.

Financials-

The oreder pipeline of this company for the year 2015-16 is quite impressive. It has received order for supply of WHO/UNFPA pre-qualified Male condoms from UN population fund, Denmark. The total value of the order is USD 0.97 Million equivalent to Indial Rs. 5.87 Cr approx. This order is expected to complete by Feb 2015.

The company, also has orders on hand of over Rs. 7 Cr. for supply of Female condoms to its customers in South Africa. This is in addition to the existing orders.

With a robust order pipeline, the sales figures for the current year are expected to achieve decent double digit figures. 
On the back of this, sharp fall in the rubber (raw material) prices will certainly boost company margines.
Company has significantly reduced its debt over the last 4 years from Rs.7 Cr to 2 Cr. 

Quarterly Results
	Q2 FY15 (Jul-Sep 2014)	Q2 FY14 (Jul-Sep 2013)
Sales	10.11	3.92
OPM	2.93	-0.16
NP	1.72	-0.65
Annual Results				Rs. Cr
	Mar-14	Mar-13	Mar-12	Mar-11
Sales	31.84	28.4	25.98	19.11
OPM	8.3	2.89	2.64	2.59
NP	5.28	0.86	0.59	0.39

Future growth plans-
Anticipating demand for Female condoms, the company is undergoing expansion. It has infrastructure in place to expand production capacity to 700 million condoms per year.

Management & Promotor shareholding:
CUPID's chairman Mr. Om Garg is a US based NRI having over 30 years of professional experience in this industry. He is also a member of an ISO Technical committee which deals with the Standardisation of non-systemic contraceptives and sexually transmitted infections (STI) barrier prophilatics.

The Promotors have increased their share since last 4-5 years and the current holding stands at 48%.

Conclusion-

- Very high growth potential of this industry and this niche segment in particular, will surely propel CUPID's long term growth prospects.

- Having reasonably high entry barrier will help CUPID

- Strong order pipeline from International agencies & Governments will further improve the performance of the company
- Company management's focus on reducing debt

- Drop in raw material prices are helping improve upon margins.

With all these factors, the company is surely going to be a multibagger in medium to long term.

 Please refer company website for further details - http://www.cupidltd.com/index.php