Opto Circuits sees FY12 revenue up 33-38%, margins steady

Opto Circuits sees FY12 revenue up 33-38%, margins steady

Mumbai: Medical equipment maker Opto Circuits (India) plans to launch at least two new products this year and leverage the potential of its latest acquisition in the US to boost sales by 32-38% this year, a top official said on Wednesday.

“With the acquisition of Cardiac Science, we plan to enter a new business vertical - of AEDs (automatic external defibrillators) - in domestic market with demands from government departments, malls and MNCs," V. Bhaskar, director finance, told Reuters in a telephone interview.

The Bangalore-based firm, which has 10 manufacturing units in three countries, also plans to consolidate its US operations to cut costs, he said adding the company expected to maintain profit margins in FY12.

Opto Circuits’ FY11 profit margin stood at 23% on consolidated net sales of Rs1,585 crore.

“We have two other factories (excluding Cardiac Science) in the US and the plan is to integrate them into one unit," he said. “While all this is happening, we might retain (profit) margins this year. They could dip by a percentage or two."

Opto Circuits paid about $89 million - including restructuring costs and other expenses - to acquire Cardiac Science in December last year.

“We do not see very large growth in the Cardiac Science business as the priority is to make this company profitable this fiscal," he added.

Future moves

The firm, which reported a 68% rise in January-March net profit on Tuesday, plans to shift some manufacturing operations in the US to low cost-centres over the next two years, Bhaskar said.

“While 25 to 30% of production will continue to happen in the US, the rest would be moved out."

The company is planning to spend about Rs300 crore over two years to set up new facilities in India and Malaysia, where most of the US production would be moved, he added.

Opto Circuits plans to launch newer and updated versions of its existing products along with at least two new products in FY12 to further push sales, he said.

“In the non-invasive segment, we would launch a non-cardiac application while a new stent would be commercialized in the third quarter of this year," he said.

At 1:24 pm shares of Opto Circuits (India) - valued at Rs5,502 crore - were trading at Rs282.15, down 4.4% in a weak Mumbai market.