Cupid Ltd – Update

First, things first….mr. garg was very candid in this interaction and would therefore, rather than giving an account of the entire transcript, I am giving a point by point rebuttal of most common questions that myself and other investors had raised.

1. Why was the performance of the company so bad till now?
a. Mr. garg has had various business interests ranging from retail to jewellery in the US. Till 2009 is was not actively involved in cupid and was dependent on an external candidate to run the company and obviously, inspite of mr. garg spending around 15cr of his own “personal” money there was no output. Finally, in 2009 my garg decided to take the matters in his own hands and that’s when the recover plan was put into place and practice.
2. Why is his personal stake pledged at 75%?
a. In 2009 when he started getting involved in the company, the fiscal health of the company was really bad, and company needed some debt, which noone was ready to provide. At that time ING asked for personal guarantee for debt, and Mr garg being an NRI, had no option but to pledge his personal stake. Cupid, is now cash surplus and therefore, in next 2-3 quarters the pledge could be released.
3. Why did promoters sell their stake?
a. The person in question needed some cash urgently and selling shares provided the quickest liquidity. Mr garg, re-iterated that there were no malafide intentions behind it as the stocks were sold in their mid 30s and if there was anything malafide, they would have sold it at the best rate. Also, Mr garg admitted that it may have been a bad decision considering he was not aware that stock market sentiments can be hurt by such actions (he says he’s never traded any share ever and for all this he’s dependent on external advisors). He told me that promoter stake would be held up at this level without any selling. He also admitted that he was unaware of inner stock markets working and was deeply hurt by the conclusions being made by investors on promoter’s intentions on mere hasty but innocent decision of few thousand share sale. I explained him in detail, rationally, why this selling was being questions by investors.
4. What is Safeware & Co.?
a. Safeware is a stealth mode startup company (and therefore, no trace of company on web) registered in Naples florida. This company is started by four well known business guys (one of them is pure investor though) having very strong distribution channels. Safeware, zeroed in on Cupid after surveying a lot of companies in Malaysia, China and Thiland, but was introduced to Cupid, by a cupid’s existing customer (and Safeware’s friend). The company is for real and Mr. garg assured that he’s ready to face any legal action if otherwise. Also, he has requested US based investors to personally check the registration in case of any doubt. The export order is going to have a great annuity for cupid and could significantly add to the order book. Though, the effect would be visible from next FY and not much from this FY. By the way the agreement is already in place and Safeware, is expected to pay a visit in Jan 15 to Nashik plant again. I have got the details verified, but would expect, the shareholders to do it as well so that they can sleep tight  .
5. What’s in store for Shareholders?
a. The company expects to perform very well in coming year, and for this year, company should exceed its first 6 months performance. Also, now that company is cash sulplrus Mr garg, is of the view that the shareholders would be rewarded (and we all know what it indicates). He also explained me his line of thinking that if there’s no capex and debt, excess cash should go back in the hand of shareholders. Enthused by its own performance, cupid is now actively researching on another product line – Lubricants (which again is very lucrative).

There was a lot of discussion but it would become a 10 page essay. From the meeting it was clear the Mr. Garg, needs some better guidance on how stock market operates and especially what hurts the market sentiments. I also asked him to get better CAs and now CS as well. Earlier, the company was in oblivion and noone was interested and therefore, their ignorance of the markets was not questioned, but not now. I explained him in detail how promoter selling hampered the sentiments. I told him first safeware news came, then promoters sold, coupled with no “web” trace of Safeware, and the history of company few years back, raised eye brows and there were accusations of some possible fraud. This visibly “hurt” mr garg has he took pains in explaining that the Cupid is genuine, Safeware is also genuine (he told me names of safeware founders and have verified it on linkedin) and admitted that it was clear that promoters treating their own shareholding as their personal measure of liquidity was a big blunder (although he said he had asked his advisors before selling) as was evident from numerous mails and calls they have received over this matter and assured it should not be repeated again (though IMHO selling a few thousand shares is never a problem). He also accepted my advice of getting better advisors for himself, especially who knew the street well and what affected the street as well. Mr, garg is a well to do businessman and given the fiscal health of the company he was not taking any salary so far, but given the cash condition, from this/next quarter he might start accepting the salary. Cupid, is extremely excited about future right now. The company has a very healthy order inflow and are now in a position to say no to low margin orders, something that was unthinkable a few years back. Also, the company has started paying full income tax and would think of rewarding the shareholders soon.
I came out of the interview with a very positive frame of mind especially w.r.t safeware and company’s genuineness.

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170 Responses to Cupid Ltd – Update

  1. Thapa says:

    Kudos and hats off to your effort Ace…

  2. Ramesh says:

    Great efforts Sirji. Way to go…:-)

  3. manishkela says:

    Hi Ace,
    What is your views on Allied digital

  4. Sameer Anand says:

    Great work ACE. I wish you could do a similar interaction with Wanbury’s management.

  5. Mahesh Vakharia says:

    THANQ very much for caring for all your followers . It speak volumes , that you Don’t only Track the company you like but also make Sure the things which you shared on the Blog is Absolutely Well Researched . Hats of Sir,
    With Regards Vakharia Mahesh.

  6. rashmi says:

    grt ace!! and lo behold,cupid on uc!

    • more than price action, i know we are in great business and now i can rest peacefully 🙂

      • chirag says:

        Thank you! Ace freshtrop is running up as if there is no stop only..

        Europe being in doldrums according to news, though cannot say how it might affect their business on ground ,but this is a clear sign of over optimism. Running up 150 percent. Some people are saying it deserves a pe of 40!!!!! Let’s see what they have to say when things cool down

        • see, here’s my take…some people are seeing them as only exporters…but the goods that they export are fruits which has an FMCG based demand, so no matter people or happy or sad they wont stop eating fruits, only sentimets would get affected….well as far as PE is concerned, just enjoy the speculation…

  7. Hello Ace, can you tell us the buzz around SKm egg product exports today? it reveresed all of a sudden and is in its lower circuits.

    • i already said yesterday i am not comfortable with trading pattern of SKM…please go through my comments yesterday….

      • chirag says:

        Ace I’ve done complete research on wanbury and have been holding since your recommendation. Even though I have conviction, just want to ask whether they’ll surely report positive bottomline this quarter and it will not be an “abnormal quarter” for any reason again. If latter is the case I’ll probably take advantage by keeping money aside and average down.

        What do you think ace? I’m expecting market to correct also overall so keeping money aside only to buy wanbury

    • nsriniv says:

      Hi Zoom, which stock Dolly Khanna exited you said.

  8. ace sir you have done a great job by meeting Mr Garg and clarifying all the doubts which ware created by the crowd. now i think we are in a great business which would create great value in the future. and if they start distributing dividend that would be an icing on the cake and than the stock would get a much better valuations and would be highly rerated

  9. Akshit says:

    thanq for your efforts now i am more confident in this share and I am at peace with my investment made

  10. Jitendra says:

    Dear Ace,

    I am also confident of your latest recommendation Cybertech Sol. I will hold it for long term.

    Thanks ACE for your hardwork for us.


  11. akii says:

    thanks Mr.Ace for explanation on cupid and detail discussion with management of company. I think now investors confidence will boost and people will stop panic selling. i am sure in coming year cupid will cross 3 digit.

  12. Khansalimx says:

    Hi ace valuable information.

  13. Mayur says:

    Thanks Ace for all your efforts!

  14. Rohit Gulati says:

    Hi Ace!
    If I’m not mistaken Mr. Garg is based out of USA.Does this means you are also based in the US ?

  15. Altaf says:

    Good work ACE, keep it up 🙂

  16. Rohit Gulati says:

    Thnx Ace!

  17. sammy says:

    HiAce..What as per your view which one doesn’t work among these stocks…..
    Manjushree, Astra, Sintex, Mold tek, Edelweis, Bhawati Autocast and Dynemicproducts?


  18. Altaf says:

    When the next investment idea will be ? this week ? ACE

  19. Altaf says:

    Ace, please post the results (when they are out) of companies which you have recommended !

  20. Tamil vanan.S says:

    Waterbase turn to positive way. Waiting for wanbury.Sirvyour view on adi fine chemicals?

  21. M Prabhu says:

    Zoom, what is the point you to know how much ACE earning.. Do not you earn as because of his recommendation in short term… if you ask me if even he earn crore aswell does not matter… be matured asking question … do not be childish…

  22. AA says:

    wow…zoom…if its less will you pass on some to him…stop being voyeuristic…look at your own…even if he made…what bothers you…get a life…

    • chirag says:

      hahahaha… ace, i guess people not too happy with your stock recommendations ! they want your money too !

      dada yeh toh kalyug aa gaya hain, kalyug..

    • chirag says:


      Ace people are not simply happy with your recommendations ! They want your money too !!

      Dada kalyug aa gaya hain, kalyug

    • chirag says:

      jokes apart but Ace you have the skin of a rhinoceros.. high tolerance level.. everyone ought to have that

      since technology is your passion hope you admire tim cook .. he is my champ

      • tim cook, maybe but not as much as John McCarthy, alan turing and dennis ritchie 🙂 but you know everyone has done a great bit in his own right… some of them we all know … most we have never heard of…. but all are special in their own way…. God Bless

        • chirag says:

          true ace.. founders of what computing is today.. obviously their achievements are vastly different.. its crazy if you actually connect with these guys.. so you really appreciate what they have contributed.. respect

          so what do you think about usual debate of windows vs mac, android vs ios ?!

  23. Surya says:

    Hi Ace, As I am new to this blog I scared after taking couple of shares available in this blog. Now I got confidence after recovering most of my stocks including orient bev, wanbury, cupid, frestrop, cybertech, prima plastic. What is the frequency of posting new picks. Monthly, quarterly, weekly. Thanks again.

  24. nsriniv says:

    Hi Ace. Great piece of work. No one can match you in researching and stock picking. Your follow up reasearch to clear the ambiguity in the minds of small investors like me is fabulous

  25. Serene says:

    Now more competition E-Commerce business…Which sector will benefit also which scripts?

  26. indianbull10 says:

    Ace, u tracking Sanco Trans? CMP 323 but mcap just 58.2cr. Nice result today

  27. Sanjeev says:

    Thanks ace….u are god like ..helping so many person

  28. Renu says:

    Hello ace , would like to know your view on Hindustan Media Ventures for a long term investment .

  29. chirag says:

    ace was trying to understand why wimplast commands such good valuation.. products are more or less the same/nothing extraordinary perception wise also for their furniture.. growth is there but were seeing it in prima too

    feel very confident about prima ace.. has a very long way to go.. ACP is their joker

    ace but one thing i felt is prima really needs to overhaul their website.. though it is a boring business, still feel that it left a very bad impression first time i had a look

  30. Dear ace, thank u for all ur recommendations. i entered v2@30, prima@52,cybertech@69, planning to enter cupid and waterbase. Iam convinced with both. But when I compare waterbase with avanti, waterbase does not feel to be undervalued@60 price. I could not understand in what way waterbase is undervalued or better than avanti. Its appearing to me that avanti is superior to waterbase in all aspects. i need ur advice.

  31. Nikhil Biswas says:

    Sir, pls express ur valued opinion on Somi Conveyor Beltings…

  32. sumesh says:

    hi whats ur view on panchsheel organics

  33. Khansalimx says:

    Hi ace entered Prima and Cybertech today….let’s hope for the best…

  34. rajul says:

    sir your expert views on ucal fuel after the current results

  35. Thapa says:

    Ace, Ur vies on Narmada Gelatines Ltd. please.

  36. Piyush says:

    Hi Ace ,

    Your views on La Opala RG .

  37. skdc14 says:

    Dear Ace, Good Morning .
    Sir do you track Vinyl Chemicals ? Any way what is your view..


  38. venkatesh says:

    Hi Ace Ji,

    I heard SEBI new delisting norms are out, Can you please postmortem it and let us know about the key highlights for investor.

  39. deepak01jun says:

    Hi Ace,
    Please share ur views on Shetron Ltd. enjoys a good market share in asia.Posted a fantastic result.

  40. Mayur says:

    Now its turn for Aro Granite – holding high when others are under pressures – eager to see it hitting century by this week 🙂

  41. sammy says:

    Hi Ace, whats your view on RPG LIFE SCIENCE LTD….promoters are buying heavily from open market.

  42. sanjeev jain says:

    Dear ace pls. guide me about pharma co. Sanofi ?can i buy it for longterm.Is it a goodvalue at current price

  43. chitresh says:

    hi Ace.. Today finally cupid and v2 retail are trading? Are the current price good for long term investment

  44. Mayur says:

    Ace, as u mentioned earlier about Aimco that one can take decision post results and as we know results were good, so it good time to accumulate more Aimco around 81 bucks?

  45. harishr27 says:

    Hi Ace….seek ur views on premier explosives….dolphin offshore…..Jayshree Tea….Neocorp International…

    Amazing analysis and insights….. Got to learn a lot from ur blogs….
    Keep up the good work….God bless u… 🙂

  46. sammy says:

    Hi Ace, your views on nile at cmp?

  47. Vandana says:

    Hi Ace, Can you please show some light on Pioneer Embroideries & RPG life science?

  48. anjum vohra says:

    Hi Ace,today entered Waterbase @ 58/- is it OK?

  49. anjum vohra says:

    Yes I am convinced Ace,thanks.

  50. Arun says:

    Hi Ace – Your view on Rossell India ?
    Thanks and Keep up the good work

  51. parinan says:

    Sir, request you to share your views on Talbros Automotive Components. Thank You

  52. M Prabhu says:

    ACE, I just spoke to Prima Finance person Mr. Jayanth bhatt for my queries..why only standalone results shown not consolidated, he said as per SEBI it is not mandatory to show the subsidiary company result which they have not done sofar…their subsidiary of JV Cameroon company Prima Dee-lite Plastics Pvt. Ltd financial year ending is December 2014… So he informed Consolidated result would be shown in March 2015.. when I was asking how the profitability of the JV Company as the major shares in the annual report are driven from JV company only… He said figures would be informed during March 2015, He was glad to say that major crude oil fall down is making huge impact on profitability.. He was firm to say profitability would never disappoint for any reasons as inventories are geared up.. . regarding company order book he was not able to say that he said he would check with marketing department he would reply if I call him tomorrow… I am too satisfied as during the discussion he was so patient on my all queries and he was very optimistic on company performance…. So It is my thought that as the crude oil fall had already shown the significance in Indian operation recent quarter result…hope it will reflect in JV Cameroon company Prima Dee-lite Plastics Pvt. Ltd coming financial year result aswell… with these all I guess it would easily cross last year consolidated EPS 6.9 to more than 9..So I concluded myself I am riding on growth company…..Thanks for the recommendation ACE.

  53. Raj says:

    Thanks for good work Ace. Can you please advise on Balkrishna Industries? It Fell from 838 to 631 in just 7 days but it seems the fundamentals are good… you view please?

  54. Sat says:

    Hi Ace,

    Whats your view on SPEL Semiconductor Ltd? Is there any future in its business ?

  55. Renu says:

    Hello ace , can you plz share your views on Hindustan Media Ventures for a long term investment .

  56. zoom says:

    Bravo! You booked your profits with cupid!

  57. hi ace,
    pls share ur view on redington and himatsingka seide at current cmp

  58. Ravi multani says:

    dear zoom
    please zoom from this blog and don’t again come to zoom in this blog….our mind get zoom with ur idiotic zooming comments…if u r not happy with this blog then why r u coming here and giving Bakwaas comments…

  59. drbishan says:

    Dear Ace,
    Thanks for your meticulous research.
    Its really heartening to see a person selflessly putting a lot of time as well as effort to make other people rich.
    Hats off to you & best of luck.
    I’d like to know your opinion about Neo Corp International, a packaging company which has posted quite decent results recently. Also the business is interesting.

  60. Amit says:

    Sir, do you track ‘Confidence Petro’ and if can be bought at the current levels?

  61. Bela says:

    Hi ACE,
    pls share ur view on Rolta India and Bambino Agro at CMP.

  62. parinan says:

    Sir, Kindly request you to provide your insight on Ashok Alco-Chem Ltd – a company that is likely to have an EPS of Rs. 25-30 in FY15 & is currently valued at just about 2 PE.

    Thank You

  63. Hi Ace, I am new to investing and am doing some research on a few companies. My eyes are on :ON mobile global” . would like to know your opinion on this company ?

  64. parinan says:

    Sir, I had asked your views on “Talbros Automotive Components”. You commented that you didn’t like it.

    I would be glad if you could kindly elaborate a little. I believe the fundamentals of the company are good (though it has some debt on its book), the company has been consistently performing well & the auto ancillary sector is likely to do very well going ahead.

    I look up to your advise as there could be something that I may be missing.

    Thank You

  65. Saurabh says:

    Hi Ace,

    What’s your take on Waterbase. It has fallen from 90 to 57 level.


  66. naveen says:

    Dear sir,whats your opinion on Madhav mables?

  67. Rohit Gulati says:

    Hi! Ace,
    Can you tell us what is the order value given by Safeware to Cupid and for how many years?Thnx.

  68. Prabhu says:

    Hello ACE
    Had a look at the FY’14 annual report. It says they received an order for female condoms which started to reflect in March’14 quarter and also they say the remainder of the order runs through till October’14. Now as i see the panic in stock after October. Is their order book sound for the remainder of FY’15. Any details shared by Garg on orders being executed for the remainder of FY’15.

    Also whats little frustrating is there are no buyers even for few hundreds of shares daily after 25% drop from peak levels of 60.



    • mr. garg said they would easily do whatever they have done in H1 in H2 also, without considering some shipments for safeware…whatever small orders safeware gives this FY would be bonus on top of it….i have clearly written that in the update…have you read it? also, this is the reason traders are important in markets…they keep things exciting…although fundamentally, there nothing that appears wrong with company, but 2% circuit has kept traders at bay and therefore, people get nervous…i see only 15k pending orders…anyone can actually buy it but people are scared because of lack of activity. Business wise, so far nothing wrong..

  69. Prabhu says:

    Hello ACE
    Neo corp with Compounded sales growth of 45% fr last 5yr..compounded profit growth of 25% over 3yrs..1200 cr sales company with a market cap of mere 160cr and operating profit margin of 10% is very much mouth watering..but a low promoter holding of 25% which has increased from 12% over the yr..also seems to be that some mess up hapd wth their GDR issue and stock crashed to 6 levels a year ago wen FII exited neo..didnt find reason for their exit..

    Also recently Neo has acquired a bangalore based PP/HDPE manufacturer IPC Packaging co pvt ltd ..and added rooftop farming to their agrotech products

    Whats your call on neo corp ACE..?



  70. hafizul09 says:

    Hello Ace Ji…..Thanks a lot for all your efforts….you are doing really a GREAT , GREAT ,GREAT job…hats off to u……..although i am a very late entrant to Cupid and you blog (bought Cupid last week around 40 and read ur blog today but i heard ur name in Cupid Board in Moneycontrol) , i want to know that as the price is going downward , should i buy more to avg. the price…Thanks in advance!!!!!!——Regards- Hafiz

    • are you yourself convinced about the business. cupid is risky but could be very rewarding. if you are convinced then you can think of taking a plunge. remember the stock has appreciated quite a bit after being recommended here giving returns as high as 180%. also, if you bought at 40, averaging now does not make sense as its not even 10% decline.

  71. hafizul09 says:

    Thanks Ace Ji for such a quick reply…Yes Ace Ji…i am very much convinced BUT my only concern is that i missed the opportunity to buy @price u recommended as i was not aware of ur such a wonderful blogs….so from now i dont want to miss any opportunity….pls give some clue on date before publishing ur next investment idea……regarding Cupid , someone raised qs in Moneycontrol that why MD is leaking such sensitive information(WHO order confirmation and all) one to one investor and why not publishing to the exchanges as per company rule so the promoter might be fraud…..however i do not agree to that but would want to know ur view on the same…Thanks in advance…GOD Bless U…..

    • tomorrow the answer to the Name this gem 2 is being published. although no company is required to announce on exchanges the order wins, but i personally would like cupid to announce it to exchanges and had requested him last time and this time too. Let’s hope better sense prevails.

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