“We expect 10 to 15% growth per year for at least next 3 years”

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Based in Nashik, Cupid Limited has been in existence over the last 25 years and has been a profitable business for most of the last 10 years. In this period recording a growth rate of an average of 11 per cent annually it has been outperforming the industry’s average growth rate of 8 percent. The big positive is it is a debt free Company and gets more than 80 percent of its revenue from international markets. A leader in manufacturing of male and female condoms, Cupid has been very successful in winning some of the important international supply tenders including big orders from government of South Africa, Brazil, Tanzania and other countries. The company is also the only one in the world, to obtain WHO UNFPA Pre-qualification for both Male condoms and two models of Female Condoms. There is no other company in the world with similar accreditations.

In 1993, Mr Omprakash Garg, Chairman & Managing Director of the Company, was one of the three original promoters to start Cupid Limited. His role was mainly as an investor and he was not involved in running the day to day business. When Cupid was facing operational and financial problems in 2006 he decided to move to India, bought the stakes of the two other promoters and started leading the management team from the front.

The Company just celebrated its Silver Jubilee, and announced Bonus Share offer, 1 share for 5 shares to all its shareholders. Its “Cupid Angel” Trademark has been recently registered with the United States Patent and Trademark Office which would help the Company to promote and market the Cupid Female Condoms in USA. The Company continues to diversify across new geographies and exported to Central American countries like Guatemala, Honduras besides Dominican Republic through United Nation Population Fund (UNFPA) for the first time.

Please tell us about the “We expect 10 to 15% growth per year for at least next 3 years” 1journey of the company so far? How it all started and what was the dream behind?

The Company was started in 1993 with an ambitious dream to provide a world class facility to manufacture contraceptives for worldwide market. I was one of the three promoters but my role was just as an investor. We came out with our IPO in 1995 and listed the Company on BSE. However, the commercial production started in 1998. Later, in 2005 when the Company was facing some operational and financial problems and the two other promoters had decided to terminate their association. I bought their stakes and decided to move to India to be an active member of the management team.

What were the key challenges when you took over and how has that shaped up now?

That time Cupid had only one product i.e. Male Condom with only couple of customers in India, no export and it had debt. As a turnaround strategy the challenge was to add new products to our basket and to start the export business. So first I decided to expand its production capacity, to be able to participate in large International Tenders. The move to acquire Pre-Qualification from WHO UNFPA for a Female Condom in July 2012 provided a major breakthrough in Cupid’s fortune. We were the first in India and the second in the World to achieve such recognition. Our sales and profit have been improving since then. Now it is debt free company. In 2016, we listed the Company on NSE also.

What is the current status on demand and supply front?

The current status of contraceptive industry, mainly condom is quite positive as the demand is increasing.On the supply side, however, there is limited supply of good quality Condoms, resulting in a favorable situation in demand. During the last 5 years we have expanded our exports to over 75 countries. Right now our 80 to 90% of sales are export and we have a very strong and healthy Order Book. We shall continue to explore possibility of enhancing business prospects in South Africa and other Sub Saharan continents. You will be surprised to know that 70 per cent of our capacity for FY20 has already been booked through this healthy order book. I feel one of the major factors that would drive the demand in future would be the increased donor funding.

Do you find the present capacity puts any hindrance to participate in large sized tenders?

No. We have completed our expansion plan in March 2019 and now we produce 560 mn pcs condoms both Male & Female. Our current capacity is adequate to participate in most of the major large sized International tenders from Brazil, South Africa and India.

“We expect 10 to 15% growth per year for at least next 3 years” 2

Do you think implementation of GST has eliminated some hurdles or is it another burden?

GST is a positive move as it has simplified the Tax structure for our business. However, claims for refund are rather slow in coming.

What steps you’ve planned to explore possibility of enhancing business prospects?

Firstly, we plan to aggressively compete in the international tender business at competitive prices. Second strategy is to offer a wide variety of male and female condoms to our customers at affordable price(s).

So working on the strategy we are trying to expand our market in new Geographies like South America, Eastern Europe and CIS Countries. Secondly, we are also in the process of adding some new products related to Women’s health and wellness. The company is also targeting the lucrative market of the United States and is relying on the outcome of a contraceptive efficacy study currently underway. The results from this study are expected to come out soon.

Is there any plan to have joint venture?

Yes. You must be aware that South Africa has the highest number of HIV positive population and female condoms are not only useful to prevent unintended pregnancy but also to prevent the spread of STIs including HIV. This is the reason Sub Saharan African countries are major buyers of Female Condoms. Keeping all these factors in mind we are exploring the possibility of setting up a joint venture with a local South African company for manufacturing female condoms in the country which is currently the largest market of Female Condoms in the world. To top it, the feedbacks from our customers have largely been positive because of its unique design, easy to use and availability at affordable price. I believe that the venture would be promising for the long term growth of the company.

“We expect 10 to 15% growth per year for at least next 3 years” 3

What kind of growth you expect going forward and which segment will contribute more to the bottom line?

The Company ended the fiscal year 2019 with a total Operating Income of Rs85.47 Cr as compared to Rs80.60 Cr in the corresponding period of the previous year reflecting an increase of 6.0%. EBITDA stood at Rs230.4 mn as compared to Rs283.3 mn resulting in decline in margin by 27.0%. Net profit was thereby impacted, and the Company closed the year with a net profit of Rs152.1 mn for FY19. Reason for low margin in the 3rd and 4th quarter of FY19 was the higher sale of low margin Male Condom and less sales of high margin Female Condom. However, now the demand scenario has improved. We expect 10 to 15% growth per year for at least next 3 years. Female Condoms provides the highest contribution to our top and bottom line and continues to do so.

The third quarter of this fiscal was very remunerative for us with topline of about Rs43 crore and the profit after tax of Rs10.21 crore as compared to the same quarter a year ago when the top line was about Rs10 crore and the bottom line was just over Rs2 crore. We have a total of Rs160 crore worth of orders including Rs88 crore of confirmed orders and Rs72 crore of orders in the pipeline. We plan to dispatch the maximum possible order during the fourth quarter until March 31, 2020. We are looking at the same level of performance in Quarter 4 as well. So for the next year we see a growth of at least 10% from the FY20 numbers. In India the margins are lower as compared to exports, so we are more inclined to get orders for export rather than supply domestically.

How you visualize the future of the company?

The outlook is very promising. We believe a bright future for Cupid going forward and expect a growth rate of about 10 to 15% per year for next 3 years. Most of this growth is expected to come from the sale of female condoms to South Africa and Brazil and later on from the US. In addition we expect more sale and revenues from UNFPA WHO contracts.
We’ve successfully got our Female Condom registered with Government of Brazil which has put the Company in favourable position to win sizable order for Female Condoms from the region. The UNFPA has also renewed Cupid’s Pre-Qualification status for its Female Condom Version 1 & 2 and Male Condom for a period of 3 years. We have also launched Cupid range of Male and Female Condoms, Hand Sanitizers and Water Based Lubricant Jelly.

We expect to see increase in demand for condoms on the back of more international donor funding, higher consumption in lower and middle-income countries and more funding from National Governments for the prevention of spread of STIs including HIV and unintended pregnancies.

What could be the challenges going forward?

I see two major challenges going forward. The first is increased competition from expanded capacities by major manufacturers especially from Malaysia and China. The other challenge is the possibility of reduction of donor funding because of worldwide slowdown of the economy which would result in less funding for the various developing countries. We anticipate that growth in demand would also come from several other sources which would include international tenders, WHO UNFPA and also from international NGOs as well as from the private sector.

“We expect 10 to 15% growth per year for at least next 3 years” 4



Mr Omprakash Garg has lived a very inspiring life. He made a big move, not an easier one – from a small town Narnaul in Haryana to CANADA/USA and back to his roots in India. After graduation from Chandigarh he moved to Canada in 1967 on a scholarship to do his Master’s Degree in Mining; Post which he worked in Mining industry for 17 years in Canada, Brazil, Colombia and USA. In 1980, the company promoted him as Director of Mine Planning and transferred to the corporate Head office in Cleveland, Ohio, but he was restless, every night sleeping with a dream to become an entrepreneur.

The day came in 1987. It was a difficult transition, leaving a cushy job with safety and high salary; and more difficult was deciding the business and arranging the finance. After exploring various options, with his wife Veena he decided to start a Gold Jewelry Import and Distribution Business and thus Ram Trading Company was born. The idea was to fulfill the huge demand of 22 karat Gold jewelry as there was no whole sale Jeweler in US at that time. Within couple of years, the business expanded to all the 10 major cities in US. Although, it was a successful business, yet in 2007, Mr Garg decided to move to India to look after Cupid Limited.

Mr. Garg said, “Excellent basic training both at home and in school gave me positive attitude in life. Value of hard work, keeping myself busy and acquiring knowledge all the time made my day to day life very enjoyable.”

What drives you?
Passion for enjoyable work and to be able to solve challenging problems in business.

Most challenging part of your journey till now?
The decision to be an Entrepreneur by leaving the good paying corporate job and also raising capital.

How you make a balance between your various passions?
Mostly it has to do with advance planning to devote time for both job and family life.

What is your routine like?
I get up at 5:30 am every morning; go for a walk followed by Yoga. I reach office by 9:30 and go back home at 7 pm, have dinner and then engage in social activities including meeting with friends.

Your success mantra?
Dedication to work, allow time for family and social activities, advance planning and proper utilisation of time.

Which of your personality traits, you feel, has not been widely known?
Working in three distinct and separate lines of business over the last 53 years i.e. First 20 years in Mining Industry, next 20 years as an Entrepreneur, managing our own business and the last 13 years managing Cupid Ltd.

Secrets behind the success story of Cupid Ltd.?
To have good quality products, strong marketing network throughout the world, better service to the customers, and development of new products.

Would you allow your children to chase their own dreams even if it is not business?
We have left the decision to our three children and they are working in Professional jobs in USA; have very little interest in business.

Advice to new entrepreneurs?
There is no limit to learning. There is plenty of help available, you only have to ask.

Any regrets that you wish to share; (you missed the bus in your business journey)?
No regrets so far. I guess, I have been lucky.

You would like to be reborn as?
As a good human being with desire to help others.

About the author: IE&M Team
IE&M Team
Indian Economy & Market is an Indian media and information platform producing data-backed news and analysis on all the vital elements at the intersection of the economy, stock markets, mutual fund, insurance, commodities, currency, technology, startups and business.

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