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G r o w t h i n t a c t b u t W C c o n c e r n r e m a i n s …
Opto Circuits’ Q2FY12 results were slightly above our estimates. Results
are not comparable YoY as it acquired US based Cardiac Science (CSC),
NS Remedies and Unetixs Vascular in H2FY11. Net sales increased 69.6%
YoY to | 562 crore in line with our expectation of | 558 crore on the back
of 100% growth in non-invasive segment. EBITDA margins declined ~440
bps YoY to 27.5% due to consolidation of Cardiac Science Corporation
(CSC) while QoQ margins remained muted. The improvement in EBITDA
margins was not seen as the company has not capitalised any R&D cost
during the quarter. Net profit increased 57% to | 121 crore above our
expectation of |112 crore. With continuance of the strong quarterly
performance, we are maintaining our BUY rating on the stock.
ƒ Medical devices sales double
The non-invasive (medical devices and consumables) segment
witnessed a robust growth of 100% to | 464 crore on the back of the
consolidation of Cardiac Science and new tenders received by it.
Cardiac Science entered into an exclusive distribution agreement
with Omron Healthcare to distribute the JMHLW approved Omron
Automated External Defibrillator Powerheart G3 HDF-300 in Japan.
Japan is the second largest market in the world for AEDs with more
than 65000 AEDs sold annually.
ƒ Increase in working capital cycle remains a concern
The working capital cycle has increased by 20 days in H1FY12 to 241
days compared to 221 days in FY11 on the back of a sharp reduction
in current liabilities. Current liabilities have reduced from 169 days in
FY11 to 105 days in H1FY11. The debt increased around | 200 crore
from the yearly closing to | 1082 crore.
V a l u a t i o n
At the current market price, the stock is trading at ~10x FY12E EPS of |
24.2 and ~9x FY13E EPS of | 29.1, respectively. Overall, we expect
Opto’s sales, EBITDA and PAT to grow at a CAGR of 27%, 25% and 19%,
respectively, between FY11 and FY13E. We have valued the stock at |
309 i.e. 11x FY13E EPS of | 28.1 with a BUY rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
G r o w t h i n t a c t b u t W C c o n c e r n r e m a i n s …
Opto Circuits’ Q2FY12 results were slightly above our estimates. Results
are not comparable YoY as it acquired US based Cardiac Science (CSC),
NS Remedies and Unetixs Vascular in H2FY11. Net sales increased 69.6%
YoY to | 562 crore in line with our expectation of | 558 crore on the back
of 100% growth in non-invasive segment. EBITDA margins declined ~440
bps YoY to 27.5% due to consolidation of Cardiac Science Corporation
(CSC) while QoQ margins remained muted. The improvement in EBITDA
margins was not seen as the company has not capitalised any R&D cost
during the quarter. Net profit increased 57% to | 121 crore above our
expectation of |112 crore. With continuance of the strong quarterly
performance, we are maintaining our BUY rating on the stock.
ƒ Medical devices sales double
The non-invasive (medical devices and consumables) segment
witnessed a robust growth of 100% to | 464 crore on the back of the
consolidation of Cardiac Science and new tenders received by it.
Cardiac Science entered into an exclusive distribution agreement
with Omron Healthcare to distribute the JMHLW approved Omron
Automated External Defibrillator Powerheart G3 HDF-300 in Japan.
Japan is the second largest market in the world for AEDs with more
than 65000 AEDs sold annually.
ƒ Increase in working capital cycle remains a concern
The working capital cycle has increased by 20 days in H1FY12 to 241
days compared to 221 days in FY11 on the back of a sharp reduction
in current liabilities. Current liabilities have reduced from 169 days in
FY11 to 105 days in H1FY11. The debt increased around | 200 crore
from the yearly closing to | 1082 crore.
V a l u a t i o n
At the current market price, the stock is trading at ~10x FY12E EPS of |
24.2 and ~9x FY13E EPS of | 29.1, respectively. Overall, we expect
Opto’s sales, EBITDA and PAT to grow at a CAGR of 27%, 25% and 19%,
respectively, between FY11 and FY13E. We have valued the stock at |
309 i.e. 11x FY13E EPS of | 28.1 with a BUY rating.
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