Cupid Shares Correct Sharply After Stellar 2025 Rally Triggers Profit Booking
Shares of Cupid witnessed a sharp sell-off for the second consecutive trading session, extending losses after one of the strongest rallies in the small-cap universe last year. The stock fell nearly 20% on January 2, following a similar decline in the previous session, taking the cumulative fall to around 36% in just two days.
The correction comes after an extraordinary 550% surge in 2025, which had pushed Cupid’s valuation to record highs. On Monday, the stock slipped to a one-month low of ₹337.10, before recovering marginally, highlighting intense volatility and nervous investor sentiment.
Regulatory Curbs Add to Pressure as Stock Enters ASM Framework
The recent decline has been exacerbated by Cupid being placed under the Additional Surveillance Measure (ASM) Stage 1 framework. Under this mechanism, stocks deemed excessively volatile are subject to tighter trading conditions, including 100% margin requirements on a T+3 basis.
Market participants say the ASM tag often acts as a near-term dampener, as it curtails speculative activity and forces leveraged traders to exit positions. For a high-momentum stock like Cupid, the move triggered accelerated selling as short-term investors rushed to book profits.
Also Read : US Raids In Venezuela Lift Energy Stocks With RIL At Record High And ONGC Up 2%
From Market Darling to Volatility Hotspot in Days
Cupid’s steep fall illustrates how quickly sentiment can turn in small-cap stocks after sharp rallies. The stock had been among the standout performers of 2025, climbing several-fold from its 52-week lows and attracting heavy retail participation.
Analysts note that such rapid appreciation often leaves little margin for error. When regulatory action or profit booking sets in, corrections can be swift and deep, regardless of the company’s long-term fundamentals.
What Cupid Does and Why the Stock Attracted Attention
Cupid operates in the healthcare and wellness segment, manufacturing and supplying:
-
Male condoms
-
Female condoms
-
Water-based lubricant jelly
-
In-vitro diagnostic (IVD) kits
The company has a total annual capacity of over 480 million male condoms, 52 million female condoms, and 210 million sachets of lubricant jelly. Its manufacturing facility is located at Sinnar near Nashik, around 200 km from Mumbai.
Cupid also claims a unique global positioning, being the first company worldwide to receive WHO/UNFPA pre-qualification for both male and female condoms, enabling it to participate in international public health tenders. This credential, combined with expansion plans and improving financial performance, helped fuel the sharp rally in 2025.
Analysts Attribute Fall to Profit Booking, Not Fundamental Breakdown
Market experts broadly agree that the recent decline is driven more by valuation excesses and profit booking rather than a deterioration in business fundamentals.
Kalp Jain, Research Analyst at INVasset PMS, said Cupid’s stock had run up far ahead of near-term triggers. “Cupid has been among the standout performers in the small-cap universe through 2025, rallying several hundred percent from its lows. The recent fall appears to be a classic case of profit booking at elevated levels,” he noted.
Jain added that near-term price action will likely hinge on execution and updates rather than momentum alone. “Upcoming catalysts such as quarterly performance, execution on the Saudi expansion and broader FMCG traction will influence the stock. While the long-term expansion narrative remains intact, intermittent swings may persist,” he said.
Technical Experts Urge Caution and Patience
From a technical perspective, analysts are advising investors to stay cautious and avoid fresh positions until volatility subsides.
Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, said the stock needs time to stabilise. “A healthy consolidation between the ₹370–₹400 range would be needed before considering any bullish stance,” Patel said.
He added that ₹445 remains a strong resistance level, while a sustained break below ₹370 could invite further downside. “Given the sharp correction and ASM restrictions, traders should wait for clarity rather than chase rebounds,” he cautioned.
Volatility Reflects Broader Risks in High-Momentum Small Caps
The extreme swings in Cupid’s share price underscore the broader risks associated with high-momentum small-cap stocks. Siddharth Maurya, Founder and Managing Director of Vibhavangal Anukulakara, said the move is a reminder of how sentiment-driven such stocks can be.
“The sharp upside was driven by enthusiasm around expansion plans and improving financials, but corrections are inevitable when valuations overshoot,” Maurya said. He added that retail-heavy participation often amplifies both rallies and corrections.
What Investors Should Watch Going Forward
For investors tracking Cupid, the next phase will be crucial. Key factors to monitor include:
-
Quarterly earnings and margin trajectory
-
Progress on international and Saudi expansion plans
-
Trading volumes and price behaviour post-ASM inclusion
-
Management commentary on demand and execution
Analysts say a period of sideways movement would be healthy after such an outsized rally and correction.
A Reality Check After a Historic Run
Cupid’s 36% fall in two sessions does little to erase its extraordinary gains over the past year, but it serves as a sharp reminder of the risks embedded in momentum-driven investing. While the company’s long-term business narrative may still hold, near-term stock performance is likely to remain volatile.
For investors, the episode reinforces a familiar lesson in small-cap investing: when returns are spectacular, corrections can be equally swift. Patience, position sizing and a focus on fundamentals may matter more than chasing short-term price moves in the weeks ahead.
