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http://content.icicidirect.com/mailimages/ICICIdirect_OptoCircuits_Q4FY12.pdf
W o r k i n g c a p i t a l c on c e r n s w a n i n g . …
Opto Circuits’ Q4FY12 results were in line with our expectations.
Revenues grew 21% YoY to | 680.7 crore slightly higher than our
estimates of | 647 crore driven by 24% growth in the medical equipment
& consumables segment, 19% growth in interventional devices segment
and favourable currency. EBITDA margins declined 50 bps YoY to 24.2%,
lower than our estimates of 26.5% due to higher raw material cost. It
recognised deferred tax assets on the US books during the quarter and
booked tax credit of | 77 crore, which led net profit to grow 89% to
| 295.4 crore. Adjusting tax credit and considering normal tax rate (5%),
the net profit stood at | 126 crore in line with our expectation of | 124
crore. We are maintaining our BUY rating on the stock.
ƒ Launch of My Sense Heart in US to be key
Opto has received USFDA approval for wearable Holter cardiac
monitor MySense Heart in January 2012. The launch of the device
would be the major event to watch out for. It is in the process of
discussion with various retail outlets and plans to launch the same
by the end of H1FY13.
ƒ Working capital concern eases
After a sharp increase in the working capital cycle from 221 days in
FY11 to 241 days in H1FY12, the company was able to reduce the
same to 179 days.
V a l u a t i o n
There has been a marked improvement in working capital management
during the quarter. This, we believe, has been the major concern in the
past. Although the improvement is heartening, we have to wait for at least
a couple of quarters to gauge the effectiveness. New product launches in
various geographies are expected to keep the growth momentum going.
We expect sales, EBITDA and PAT to grow at a CAGR of 18%, 18% and
17% (adjusted net profit base for FY12), respectively, in FY12-14E on the
back of higher capacity utilisation at Vizag and Malaysia. We have
ascribed a value of | 28.5, based on 9x FY14E EPS of | 28.5. We maintain
our BUY recommendation on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_OptoCircuits_Q4FY12.pdf
W o r k i n g c a p i t a l c on c e r n s w a n i n g . …
Opto Circuits’ Q4FY12 results were in line with our expectations.
Revenues grew 21% YoY to | 680.7 crore slightly higher than our
estimates of | 647 crore driven by 24% growth in the medical equipment
& consumables segment, 19% growth in interventional devices segment
and favourable currency. EBITDA margins declined 50 bps YoY to 24.2%,
lower than our estimates of 26.5% due to higher raw material cost. It
recognised deferred tax assets on the US books during the quarter and
booked tax credit of | 77 crore, which led net profit to grow 89% to
| 295.4 crore. Adjusting tax credit and considering normal tax rate (5%),
the net profit stood at | 126 crore in line with our expectation of | 124
crore. We are maintaining our BUY rating on the stock.
ƒ Launch of My Sense Heart in US to be key
Opto has received USFDA approval for wearable Holter cardiac
monitor MySense Heart in January 2012. The launch of the device
would be the major event to watch out for. It is in the process of
discussion with various retail outlets and plans to launch the same
by the end of H1FY13.
ƒ Working capital concern eases
After a sharp increase in the working capital cycle from 221 days in
FY11 to 241 days in H1FY12, the company was able to reduce the
same to 179 days.
V a l u a t i o n
There has been a marked improvement in working capital management
during the quarter. This, we believe, has been the major concern in the
past. Although the improvement is heartening, we have to wait for at least
a couple of quarters to gauge the effectiveness. New product launches in
various geographies are expected to keep the growth momentum going.
We expect sales, EBITDA and PAT to grow at a CAGR of 18%, 18% and
17% (adjusted net profit base for FY12), respectively, in FY12-14E on the
back of higher capacity utilisation at Vizag and Malaysia. We have
ascribed a value of | 28.5, based on 9x FY14E EPS of | 28.5. We maintain
our BUY recommendation on the stock.
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