20% Lower Circuit: Why Did Cupid Shares Crash Today After a 600% Rally?

SYNOPSIS: Cupid hit a 20 percent lower circuit after an extraordinary 2025 rally, as stretched valuations, overbought indicators, and heavy selling triggered sharp profit-booking despite strong earnings growth and expansion plans.

It was a sobering day for investors in this Indian manufacturer and global exporter of male and female condoms, personal lubricants, and IVD kits with a presence in over 110 countries. On 2nd January 2026, the stock hit a 20 percent lower circuit amid intense selling pressure, bringing an abrupt pause to what had been an extraordinary rally.

What makes the fall harder to digest is the sharp contrast with recent months. Throughout 2025, the stock was in the spotlight for hitting fresh 52-week highs almost every day and delivering strong multibagger returns. In fact, even earlier today, the stock had touched a new 52-week high of Rs. 527.4. But as the new year barely began, sentiment quickly turned, leaving many investors surprised and a bit unsettled.

With a market cap of Rs. 11,274 crores, shares of Cupid Limited hit a 20 percent lower circuit at Rs. 419.95, as against its previous closing price of Rs. 524.9, a painful reversal that has understandably shaken confidence after such a strong run.

Established in 1993, CUPID Limited is a trusted Indian manufacturer and global exporter of male and female condoms, personal lubricants, and IVD kits. CUPID is the first company globally to receive WHO/UNFPA prequalification for both male and female condoms.

In a major strategic shift, CUPID entered the B2C FMCG space in 2024, launching a branded portfolio that includes deodorants, perfumes, toilet sanitisers, menstrual cups, petroleum jelly, face wash, hair & body oils, hair removal sprays, and other personal care products. Cupid’s bold entry into India’s high-growth FMCG space marks a pivotal shift toward domestic B2C expansion backed by decades of manufacturing expertise.

Cupid has rapidly scaled its B2C FMCG presence, expanding to more than 1.2 lakh retail touchpoints in just 15 months, highlighting strong execution capabilities and robust pan-India distribution scalability. Rapidly scaling B2C FMCG reach with a target of 1.75 lakh+ outlets by FY26.

On 29th December 2025, Cupid received in-principle approval from its Board to set up a new FMCG manufacturing facility in the Kingdom of Saudi Arabia (KSA). This will mark the company’s first manufacturing plant outside India. The facility is aimed at supporting Cupid’s FMCG expansion strategy and strengthening its footprint in overseas markets, starting with the Gulf Cooperation Council (GCC) region. Once operational, the plant is expected to boost regional supply capabilities, improve speed-to-market, and ensure better product availability across KSA and other GCC countries.

Cupid is building a robust diagnostics platform through automation, certifications, and global outreach. The company currently operates with a manufacturing capacity of 1 lakh kits per day and is targeting a 4x increase to 4 lakh kits per day by the end of 2026.

The company is also accelerating international expansion, having secured registrations and commenced sales in multiple regions, including Tanzania, Ghana, Liberia, Bangladesh, the Philippines, Sierra Leone, Bhutan, Nepal and Uganda.

High Valuations & Selling Pressure

Shares of Cupid, currently placed under Stage 1 of the Long-Term Additional Surveillance Measures (ASM) framework, snapped their 13-day winning streak in today’s trading session.

So far, neither company has issued any official clarification to the stock exchanges that could explain the sudden slide. The sharp fall, therefore, appears largely unexplained, which has added to investor unease. Market observers suggest the decline may be driven more by speculative trading or abrupt market pressures, rather than any immediate deterioration in the companies’ underlying fundamentals.

The stock is currently trading at a sky-high P/E ratio of 183, significantly higher than the industry average of 50. This extreme premium – over 3 times the sector norm – marks the stock as dangerously overvalued. Despite nearly 600 percent gains in 2025, today’s crash underscores vulnerability from stretched valuations, while a high RSI near 93 indicated overbought conditions pre-drop.

Additionally, trading activity in Cupid Limited surged sharply during the session. By 2:45 pm, over 39 lakh shares had changed hands on the BSE, far exceeding the two-week average volume of 5.03 lakh shares. Notably, there were only sell orders totalling about 58 lakh shares across both exchanges, highlighting intense selling pressure.

In terms of financials, in Q2 FY26, CUPID experienced a significant growth in the revenue from operations of Rs. 84 crores, an increase of around 40 percent QoQ and 100 percent YoY. Meanwhile, its net profit stood at Rs. 24 crores, representing an impressive rise of around 60 percent QoQ and 140 percent YoY.

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