OPTO Circuits
(OPTC IN, Rs300, Not rated)
Key takeaways
OPTC’s range of products includes pulse oximeters, pulse oximeter sensors, fluid warmers,
cholesterol monitors & stents. OPTC has a state of the art manufacturing and R&D facility at
Bangalore with 50 people in the R&D team.
Management believes both invasive as well as non-invasive segments of the medical equipment
industry are highly technologically driven, with newer product launches making the existing
variants obsolete. OPTC is consciously endeavouring to be a leader in innovations with newer
product developments and has constantly improved its product line with new launches. OPTC has
a strong R&D set up at Bangalore (100% EOU status) with 50 people involved.
Management expects OPTC, as one of the leading players in the industry, to capitalize on the
increasing opportunities. Uniqueness and strong complementary assets have been the biggest
determining factors and drivers for the stent industry, limiting the industry to 3-4 players. Another
entry barrier for a new entrant is the capital intensive (establishing sales force) nature of the
industry as medical device sales are highly relationship driven.
Valuation
Currently OPTC is trading at Bloomberg consensus PER of 13x FY12 earnings and ~10 x FY12
EV/EBITDTA.
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