CUPID LTD

CUPID LTD

Cupid ltd is consolidating in the range of 290-320, the companies looks good on both fundamental and technical parameters, with 100% capacity utilization it's topline is likely to grow by 30% giving huge investor returns.

It`s hard to measure the company on an absolute scale. However I have found it investment worthy because of following reasons

1- Free cash flow generation

2- Strong evidence of good management - dividend, periodic notification to exchanges for meaningful development

3- Last year the company was running at 60% capacity while in this quarter they are running at 100% and they expect to run at this capacity for rest of the year. This gives indirect hint on the bump in the topline.

4- Uniqueness of the business with no slowdown.

5- Innovation driven company - FC ( first in India) and Water Jelly (selling like hot cakes).

6- Recent focus on B2C which would open up a more meaningful revenue channel.

7- First mover advantage with approval and tie ups with governments and NGOs.

My concerns are

1- Over dependence on one person to run the show. However Mr. Garg has so far run the show beautifully.

2- Dependence on NGO and government agencies for orders. This is being addressed with recent B2C initiatives.

Net, I expect the company to report about 80 crores of topline and EPS of 20. So at forward looking multiple of less than 16 it is a bet worth taking.

Happy Investing