Opto Circuits caught our eye when it was trading at Rs. 215. We thought Opto Circuits was quoting at attractive valuations for a company with good growth prospects and a track record of consistent wealth creation through dividends & bonuses (see Opto Circuits – wired for profits). At CMP Rs. 272, Opto Circuits is up 26%.
We check whether in the light of Opto Circuits‘ Q1 FY 2011 results there is any reason to change our view on Opto Circuits.
Opto Circuits announced decent results for the quarter ended June 2010. Opto Circuits‘ consolidated sales were Rs. 292 crores as against Rs. 230 crores YOY representing an increase of 26.75%. However, in the Quarter ended March 2010, Opto Circuits had reported sales of Rs. 334.36 crores. Opto Circuits reported consolidated net profit of Rs 83 crores, up 39% on YOY basis. In the Quarter ended March 2010, the net profit was Rs. 66.14 crores.
So, Opto Circuits‘ financial results are quite attractive. Opto Circuits‘ 3 Yr CAGR Sales is an impressive 80.24%. Opto Circuits‘ 3 Yr CAGR Profit is 81.35% while Opto Circuits‘ Net Profit Margin is an attractive 25.27%. Opto Circuits‘ Return on Equity is an impressive 47.98%.
OPTO CIRCUITS’ QUATERLY PERFORMANCE
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V Bhaskar, Director of Opto Circuits, said on CNBC-TV18 that the Rs. 400 crores that Opto Circuits had raised via QIP had been used to hive off substantial debt. Opto Circuits‘ long-term debt is zero on the balance sheet.
Opto Circuits has also launched quite a few products over the last few months in both the invasive and the noninvasive segments. Opto Circuits expects the new products to generate about 30% of the business. Opto Circuits expects sustained growth from the new products.
| Q on Q Sales Growth (%) | : -12.70 | Q on Q Net Profit Growth (%) | : 18.48 |
| 3 Yr CAGR Sales (%) | : 80.24 | 3 Yr CAGR Profit (%) | : 81.35 |
| Debt to Equity Ratio (x) | : 0.73 | Net Profit Margin (%) | : 25.57 |
| Return on Equity (%) | : 47.98 | EV to EBITDA (x) | : 19.09 |
Opto Circuits has also entered new markets like UK and Malaysia. Opto Circuits is doing very well in Malaysia. UK is also doing well for Opto Circuits but it will take another quarter for business to pick up.
Opto Circuits expects to see a growth of between 25% and 30% year-on-year as a result of the scale up in its operations in the current fiscal year.
About Opto Circuits
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. Opto Circuits operates in niche segments of the medical devices industry. Opto Circuits is present in both invasive and non-invasive devices. Opto Circuits is expanding globally, with a wide distribution network across geographies. Opto Circuits has delivered strong financial performance in the past and the future looks bright.
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