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Stock Valuation Report

RECOMMENDATION STRONG BUY Date -10th September, 2017

Cupid Limited
Industry - Personal Products. EPS Rs 18.48
Products - Male & Female Condoms, Lubricants. P/E 15.19
Face Value Rs 10
Dividend 40%
CMP Rs 288.00 52 wk High 374.85 Dividend Yield 1.39%
Market Cap Rs 319.39cr 52 wk Low 261.10

Company Information
Cupid Limited is one of the leading suppliers of male and female condoms. It is the first company in India and the
second worldwide to be pre-qualified by WHO for worldwide public distribution of female condoms. Its annual
capacity is 400 million pieces of male condoms and 20 million pieces of female condoms. It exports to 26 countries
and derives 77% of its revenues from exports.

Key Positives Potential Negatives

Reduction in debt. Raise to Director is 3x more than median
Virtually debt free. increase to employees (percentage terms).
Strong & stable operating margins (about 40%). Decreased Promoter stake (-4%).
Focus on core business only. Low presence in B2C segment.
Increasing cash and bank balances. A lot of expected non-core launches.

Future Outlook
Although predominantly in B2B space, the company is foraying into B2C space to improve its presence.
Institutional revenues are continued to form a major chunk of the revenues.
To cater to B2C segment, the company is expected to set up a retail distribution system in 1000+ towns.
Listing in the National Stock Exchange will aid credibility and liquidity in share trading.
Company expected to launch male condoms, vaginal creams, hand sanitizers and new tech female condom.
Newly launched water based lubricant jelly added 5% to margins indicating a strong branding. This strong
branding is expected to have a positive effect towards new launches.

Valuation Methodology (CMP 288.00)

Current P/E Ratio is 15.19x and EPS is Rs 18.48
Expected profit margins based on 3 year average 22.18%. We add a 5% profit margin premium based on
new launches making the margins to 27.18% for next 3 years following which growth may fall to 18.9%.
The expected EPS for FY17-18 is Rs 23.5, FY18-19 is Rs 29.9 and FY19-20 is Rs 38.
The sequential targets are FY17-18 Rs 357, FY18-19 Rs 454 and FY19-20 Rs 577.

Analyst Information Disclaimer

Siddharth Shah The analyst has compiled this report from public sources, for informational use. The
sidd.shah@live.in Analyst holds no position in this security. Any losses arising from an action to buy or
+91-99204-45094 sell stocks is not a responsibility of the Analyst. Please consult your financial advisor.