OPTO CIRCUITS INDIA LTD. CMP Rs.221, Target of Rs.270
Excellent Q4FY10 Results - Opto Circuits India Ltd. (OCL) has reported an excellent performance for Q4FY10. Some of the key highlights of the quarterly performance are given hereunder.
- Its Consolidated Revenues for the quarter stood at Rs.3344.6 mn, registering a strong growth of 56.9% YoY and 30.1% QoQ. During Q4FY10, its invasive business grew by 151% YoY to Rs.1070 mn contributing about 32% to the overall revenues, whereas, the non-invasive business grew by 26.8% to Rs.2107 mn and contributed about 63% to the overall revenues.
- Its EBITDA increased by 51.4% YoY and 25.9% QoQ to Rs.1109.5 mn, while its EBITDA margins stood at 33.2%. The PBT (including other income) increased by 43.2% YoY and 34.2% QoQ to Rs.916.7 mn. However, its APAT grew by 22.6% YoY and 8.5% QoQ to Rs.713.1 mn, mainly due to higher tax provision at 22.2% for Q4FY10 as against 9% in Q4FY09.
OUTLOOK & VALUATION
- OCL has delivered very strong performance during FY10. The Company launched several new products during the year in both invasive as well as non-invasive segments. The Company has 18 years of experience in knowledge intensive medical device industry, and is one of the leading manufacturers of healthcare equipment in India. To expand its product portfolio as well as its presence in global market, OCL has done nine acquisitions in last nine years in different geographies. The acquisition strategy has worked well for the Company and it has grown its APAT at ~67% CAGR during FY05-10. The Company also launched many new & innovative products in both invasive & non-invasive segments and also acquired necessary certification to sell these products in different markets.
- OCL operates in monitoring devices Industry, which is estimated to grow to US$ 5.7 bn by 2011 as per Global Markets Direct Report. Further, the US monitoring devices market, where OCL has presence through its subsidiary Criticare, is expected to grow at a CAGR of over 8% and would account for 56% of the worldwide market by 2011. As per Global Coronary Stent Market Report, the global market for coronary stents is expected to grow at a CAGR of 3.4% to US$ 7.36 bn by 2015, while the global DES (Drug Eluting Stent) market is expected be around US$ 4.24 bn by 2010. The DES market globally is dominated by US, followed by Europe and Asia-Pacific. Currently, OCL has presence in European market through its subsidiary Eurocor.
- Going forward, OCL is expected to deliver very strong performance for next 2-3 years. We expect OCL's consolidated revenues to grow by 25% & 20% in FY11E & FY12E respectively and its APAT to grow by 28.8% & 24.1% in FY11E & FY12E respectively. At the CMP of Rs.221, the stock is trading at 12.2x and 9.9x of its FY11E and FY12E estimated earnings of Rs.18.1 & Rs.22.4 respectively. We maintain our BUY rating on the stock with an increased target price of Rs.270 (12x its FY12E earnings).
 BHATIYA PARESH J |
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