Buy OPTO CIRCUITS – 9th Nov 2009

Buy OPTO CIRCUITS above Rs. 210/- , Current Market Price : Rs. 208, Short Term Target : 225-228, Stop Loss : Rs.201 – 9th Nov 2009

Opto Circuits is a leading manufacturer of healthcare equipments in India. The product profile includes digital thermometers, sensors, probes, pulse oximeters, patient monitoring systems, Stents and Catheters. Other innovative products are in the pipeline.

In 2001, Opto Circuits acquired 60 per cent stake in Advanced Micronic Devices to market its equipments in India.

OEMs contribute (80per cent) of sales while MediAid (100per cent US-based subsidiary) contributes the balance.

Opto Circuits (I) Limited is a BSE/NSE listed company headquartered in Bangalore, India. OCI’s range of products includes, Pulse Oximeters, Pulse Oximeter Sensors, Fluid warmers, Cholesterol monitors & recently Stents.

OCI is in a very specialized, technology oriented Opto electronic industry since 12 years. This segment requires a unique mix of in depth knowledge & niche manufacturing capabilities.

OCI has the status of Export House and has been awarded two star trading house status by the Federal Government of India. It has ISO 9001-2000 and ISO 13485-2003 quality system certification. OCI group companies have been awarded CE approval for its products. The subsidiaries of OCI possess FDA approval for different products being manufactured by them.

At the heart of OCI’s growth plan is its desire to serve customers through excellent quality & innovative products.

In order to ensure the company’s short & long term growth, it invests a large part of its profits in the research and development of new products and technology. OCI has a world class manufacturing & R&D facility at Electronics City, Bangalore.

Highlights of Opto Circuits’ results in Q4 2009

• The growth led by acquisition of Criti care which is based in US
• Swine flu pandemic has led to increase in thermometer sales
• Newly launched Product Dior – (Cathetor) has seen good acceptance in India and Europe.
• 2-3 new products were launched last year which has also contributed to the growth.
• They have cut costs and have stopped free samples.

Highlights of Opto Circuits’ results on a consolidated basis:

• 23 % of the turnover is from the Invasive segment.
• 75 % is from the Non-Invasive segment and 2 percent from the other businesses.

Eurocor, Criticare to drive growth ahead:

Opto Circuits ought to be able to maintain its growth momentum for at least 2-3 years more. Eurocor, its subsidiary in the invasive devices business, has scope to increase its penetration of the global markets.

Opto Circuits is revamping the products and the sales and marketing function of the newly acquired Criticare. Opto Circuits is also trying to penetrate non-US markets with Criticare’s advanced products. These initiatives will be the major growth drivers for the next couple of years. Possibility of further inorganic growth also exists.

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