Opto Circuits Q2FY07 net profit up 110% at Rs 18.14cr
Opto Circuits (India) Ltd. (OCI), India�s leading manufacturer of healthcare equipments, has reported a 110 per cent rise in net profit at Rs. 18.14 crore for the second quarter ended ended September 30, 20006 compared to Rs. 8.60 crore in the corresponding quarter previous year. Net sales during the quarter grew by 75% at Rs 51.12 crore as compared to Rs 29.14 crores during the corresponding quarter of the previous year. For the six months ended September 30, 2006, net sales grew by 69 per cent at Rs 81.22 crore as compared to Rs 48.40 crore. Net profit surged 109 per cent to Rs 28.47 crore from Rs 13.61 crore in the corresponding period last year.
Meanwhile, OCI has developed, tested and commercialised production of two new multi parameter monitors for which the company have CE marking and have launched the same in the Indian Market. The company is looking at FDA approvals for sale of products in the US Market. While EuroCOR has been performing exceedingly well, in spite of several Coronary Drug eluding stents systems in the market. Taxcor has become the first choice with the cardiologists in several countries. Taxcor is preferred over other drug eluding systems primarily because of the clinical efficacy which has proved time and again through clinical trials in Germany, India, Poland &
Malaysia. The stents are available in 35 markets.
The last quarter also saw OCI making new inroads in by intensifying its marketing efforts, to promote extensive use of our stents, �We have been conducting live workshops, conferences & seminars in various countries. In India, we have conducted two such live workshops, the first workshop was conducted in the last week of September where about 200 cardiologists from South East Asia participated and the second workshop was conducted in the first week of October where over 400 cardiologists from South East Asia participated�, said Mr. Vinod Ramnani, MD & Chairman, Opto Circuits Limited.
Eminent cardiologists from USA conducted the workshop in the latest technology in deploying Taxcor. These workshops have been well accepted and have initiated several new cardiologists into the use of Taxcor. The board has also been strengthened by Dr. William Walter O�Neill, the Executive Dean for Clinical Affairs at the University Of Miami�s Miller School of Medicine. He is renowned leader in the field of interventional cardiology and in developing new techniques to diagnose and treat obstructed heart arteries. He has been listed each year in The Best Doctors in America since 1993.
Sourced From: Adfactors Public Relations Pvt Ltd
"Investing is simple, but not easy." - Warren Buffet
There is talk that Opto Circuits' subsidiary, EuroCor, which is in the business of manufacturing stents, is planning to get into cardiac surgeries and looking at a global listing.
Chairman and Managing Director of Opto Circuits, Vinod Ramnani says that the valuation of the company should be good. He thinks that the margins are pretty decent and they have to now spend money on marketing. He adds that by the end of December 2006, EuroCor is expected to have a presence in 36 countries.
Excerpts from CNBC-TV18's exclusive interview with Vinod Ramnani:
Q: Is it true that you are looking at listing EuroCor, the company you acquired on the Nasdaq?
A: That is the vision of the group because Conor MedSystems was sold in the US last week and they were listed on Nasdaq and their valuation was like USD 1.4 billion by J&J.
So we have tremendous potential and are definitely exploring that possibility and looking into it.
Q: How does EuroCor compare with Conor MedSystems and how would you arrive at a reasonable valuation in case you are moving towards a listing globally?
A: In my opinion, the valuation we get should be much better because we have a product, which already been sold in Europe and Asia.
The feedback says that the EuroCor products are equivalent or even better. So I do not see why we cannot get the same valuation or better valuation as we have other products also.
Q: At this point, what sort of sales and profits is EuroCor doing and what sort of contribution do you see this arm making to Opto Circuits?
A: As you know that we just got our CE mark around March-April this year and the sales are much better than what we expected. With the new product line and stents which we are going to introduce, I am sure that you will see a tremendous growth coming out of EuroCor.
Q: Which market is the business most active in at this point?
A: Right now, we are concentrating more on Europe and Asia because we have the CE mark and are working on the FDA approval now. Even in the Indian market we have picked up a lot, in addition to the Asian markets like China and Indonesia.
In Europe we are doing a lot of studies with various doctors in Germany and Switzerland. So overall it looks to be a very promising product and going forward I can see that it will contribute a lot to the company.
Q: What revenues come from EuroCor because your revenues will be consolidated after the acquisition. How much would it add to your topline?
A: I think that this year, we are looking at approximately 25% once we have all the studies done and have more clinical datas available. I do not know maybe 50-50 or something, but as of now, we are very much on track and it should contribute to the going forward quite a bit.
Q: If all goes well, when do you plan to go ahead with that global listing?
A: As I told you that is a vision of the management and we are meeting pretty soon to take a final call on that and probably in another week or ten days that I will be able to give you more details on other things which are happening.
Q: How high a margin is this business and of the entire global market share, how much does EuroCor hold at this point?
A: The margins are pretty decent. The only thing is that we have to now spend money on the marketing side and a lot of studies and clinicals, which are expensive.
We should be able to maintain the bottomline or better it as we have been doing it in past few years.
Edited by deepinsight - 26/Nov/2006 at 2:01am
"Investing is simple, but not easy." - Warren Buffet
Arun Kejriwal, director, Kejriwal Research and Investment Services, answers your queries: from DNA Money
From the time of its secondary issue, Opto Circuits has been flying. Does it make sense to invest now?
—Rupesh Shah
Shares of Opto Circuits have been on a roll and have more than doubled since the time of its follow-on issue in April 2006. The company issued bonus shares in the ratio of one for one as expected at the times of the issue. The share closed at Rs 325.10 on Friday against the issue price of Rs 270. On an ex-bonus basis, this close works out to Rs 135. The recent high and low of the share have been Rs 342 and Rs 270 (at the beginning of November 2006).
On a standalone basis, the company has reported a turnover of about Rs 87 crore and a net profit of Rs 29 crore for the first half of FY07. It is expected to have a turnover of about Rs 200 crore, and a net profit of Rs 66 crore for the full year. Its subsidiary, Eurocor, meanwhile, is expected to report a minimum turnover of Rs 50 crore and a net profit of Rs 17 crore. This combined profit would lead to an EPS of Rs 15.30 for the year ending March 2007. The share is valued at 21 times the expected March 2007 earnings.
The company is growing at an excellent pace and the Eurocor acquisition has further accelerated this.
Investors with a minimum 8-12 month investment horizon would do well to acquire this share for a 30-40% appreciation.
"Investing is simple, but not easy." - Warren Buffet
Joined: 04/Dec/2006
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Posted: 04/Dec/2006 at 11:11pm
Opto Circuits has signed a LoI (Letter of Intent) to acquire a medical equipment company in Europe for Rs 72 crore. CNBC-TV18 had reported the deal on November 29. CMD of Opto Circuits, Vinod Ramnani gives the details of the deal.
According to Ramnani, the deal is an all cash deal. He expects to close the deal in 4-6 weeks. He informs that the target company has revenues of Rs 80-100 crore. He also mentions that the acquired company, located in Western Europe, is profitable and is involved in balloon catheters used for coronary stent implementations.
He further mentions "The idea would be to expand their business because we can’t expand it in Western Europe. So we will have to move the manufacturing back home and see how we can expand it. So in totality, this might even grow just bigger than that."
Another good quarter from Opto Circuit. Write up from India infoline on the results...
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Broking house, India Infoline is bullish on Opto Circuits and has maintained buy rating on the stock.
India Infoline report on Opto Circuits:
"Opto Circuits (India) Limited (OCIL) recorded another strong quarterly performance with standalone sales witnessing a growth of 71.4% to Rs 552 million. Economies of scale, cost cutting measures and better product mix has led to 250bps jump in OPM to 35.3% for the quarter. Healthy topline growth and strong margin expansion has led to a 98% growth in profitability to Rs 198 milion for the quarter. Consolidated sales recorded a growth of 88% to Rs 628 million driven by increasing volumes in the base business and growing acceptance and wider penetration of EuroCor's stents. OPM declined by 210bps to 32.5% for consolidated results due to lower margins for AMDL (60% subsidiary, sales Rs106mn, OPM 6%), a domestic distribution company for OCIL's products. PAT increased by 90% to Rs 200 million, translating into an annualized EPS of Rs 13."
"We like OCIL's business model and believe the model would be difficult to replicate. OCIL is witnessing very strong volumes on its base business (SpO2 sensors & pulse oxymeters) which are estimated to witness revenue CAGR of 31% over FY06-08. EuroCor's stents are witnessing wider geographical penetration and increasing acceptance amongst cardiologists which should enable it to contribute at least 30% to the total revenue and profitability by FY08. By moving low end stents manufacturing to India, OCIL would keep its margins intact by leveraging on India's low cost advantage as well as tax benefits under 100% EOU. Strong operational performance every quarter vindicates our belief that OCIL would achieve our EPS estimates of
Rs11.3 for FY07 and Rs17.8 for FY08. At Rs 337, the stock is trading at 29.9x FY07 and 18.9x FY08 earnings."
"OCIL is undergoing a financial and legal due diligence on a European Medical Equipment Company that designs and manufactures a wide range of balloon catheter assemblies and related products for coronary, renal and other applications. The acquisition estimated at Rs720mn is likely to close out over the next few weeks. We believe this acquisition will be a huge strategic fit for the company, as it would enable OCIL to achieve backward integration thereby improving operational performance and profitability. We maintain BUY on the stock. "
"Investing is simple, but not easy." - Warren Buffet
Another example of - difficult to get CE approval for Opto Circuits - builds barrier to entry - for competitors.
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OPTO CIRCUITS SUBSIDIARY EUROCOR GMBH RECEIVES CE MARK APPROVAL FOR 'DIOR'
Opto Circuits India Ltd has announced that Eurocor GmbH the Company's wholly owned subsidiary has received the CE Mark Approval for its "DIOR," a Paclitaxel Coated Ballon Catheter, used in treatment of Coronary in-stent restonosis.
"Investing is simple, but not easy." - Warren Buffet
Opto Circuit recently sponsored an cardiology event in Goa: report summary by India Infoline:
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Broking house, India Infoline has maintained buy rating on Opto Circuits India.
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India Infoline report on Opto Circuits India:
"We attended the International Cardiology Summit 2007 sponsored by EuroCor GmbH, a 100% subsidiary of Opto Circuits (India) Ltd (OCIL). More than 170 eminent cardiologists from around the world including Dr. Cindy Grines, Dr. Nish*t Choksi and Dr. Kirit Patel from USA, Dr. Antonio Colombo from Italy, Dr. B K Goyal and Dr. Brian Pinto from India attended sessions over two days. The sessions included paper presentations on interventional issues and five live cases on Indian patients with EuroCor’s products. The summit also witnessed the launch of EuroCor’s key product ‘DIOR’ (coronary balloon dilation catheter), used for treating in stent restenosis and bifurcation stenting. In addition, EuroCor also presented data on another novel product ‘Magical’, a bare metal stent with a balloon acting as a drug delivery device. The forum also stressed that there was no substitute to stent in the foreseeable future."
"We believe the event was a grand success considering a record turnout of cardiologists. Interacting with these cardiologists vindicated our belief about the tremendous potential for EuroCor’s products particularly ‘DIOR’. Doctors were of the opinion that the quality of EuroCor’s products is superior to its competitors, which should enable it to gain increasing market share in European and Indian markets. We estimate stent sale to record Rs 58 million in FY07 and Rs 1.1 billion in FY08. Core business is estimated to witness revenue CAGR of 31% to Rs 2 billion over FY06-08. We see increasing visibility in OCIL’s operations and are confident of the company witnessing earnings CAGR of 68% over FY06-08. We maintain our BUY recommendation."
"Investing is simple, but not easy." - Warren Buffet
Sweet Spots Of Growth Opto Circuits loves its niches.
Opto Circuits' Ramnani: A reason to smile
When this writer met medical equipment manufacturer Opto Circuits' Chairman and Managing Director Vinod Ramnani five days after a successful Rs 100-crore IPO (initial public offering), he still had a smile on his face. Job well done, for sure, but for the 57-year-old Ramnani, it should have been a foregone conclusion. After all, the Bangalore-based Opto Circuits has not only grown at a CAGR of 30 per cent over the last four years, but also rewarded shareholders (its maiden IPO of Rs 10.7 crore was in early 2000) every year with generous payouts (30 per cent-plus) and bonus shares. More importantly for the new investors, Opto doesn't show any signs of slowing down.
Set up in 1992, Opto has found a way of turning global disasters into opportunities for itself. When the SARS (severe acute respiratory syndrome) scare broke out in Asia in 2003-04, shaving millions of dollars off regional economies, Opto bagged a Rs 12-crore order from the Singapore government for its digital thermometers. Similarly, after the US attacked Iraq, Opto found an opportunity to sell to the coalition forces, specially designed blood warmers that it makes. (Since blood and IV fluids are stored at specific low temperatures, they must be warmed to 38 degree Fahrenheit to prevent thermal shock to the patient.) Increased security at American airports in the wake of the 9/11 attacks of 2001 has meant more demand for Opto's sensors that go into baggage scanners. That's also partly because Opto is one of the few manufacturers approved by the Federal Aviation Authority of America.
The new opportunities didn't just land up at Opto. When founded in the early 90s, Opto was a manufacturer of medical electronic devices and monitoring equipment (think all the display gadgets at a standard intensive care unit). It added new products through acquisitions. In 2002, it acquired the digital thermometer division of Hindustan Aeronautics Ltd. That year too, it acquired us-based Palco to sell oximetry products (these are body sensors, some of which can be clipped onto a finger) under its Mediaid brand. Later in the same year, it picked up a stake (now at 60 per cent) in Advanced Micronic Devices-a marketer of different medical equipment-to strengthen its distribution in India (just a quarter of Opto's revenues come from domestic sales). And in January this year, it acquired EuroCor, a Germany-based manufacturer of coronary drug eluting stents (these medicine-coated stents), for Rs 59.91 crore. Opto will have to take on biggies such as Johnson & Johnson and Boston Scientific in the market, but Ramnani is unfazed: "There is room for every player in the market."
Ramnani plans to use the IPO proceeds to beef up Opto's R&D and marketing. How about future acquisitions? "We will continue to acquire companies in specific niche segments," he says. Quite clearly, Opto is a company to watch.
"Investing is simple, but not easy." - Warren Buffet
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A: In my opinion, the valuation we get should be much better because we have a product, which already been sold in Europe and Asia. 
