>OPTO CIRCUITS LIMITED : Sensing strong growth ahead

■ Medical Equipment Industry to grow in double digits : According to Global consulting firm Capgemini, The global medical equipment industry, valued at USD 280 billion in 2009, is forecast to grow by more than 8% annually for the next seven years to exceed USD 490 billion in 2016. Some of the subsegments like orthopedic and cardiology are growing at a CAGR of 15-20%. Medical devices and supplies market in India is expected touch USD 1.7 billion in 2010, growing at the rate of 23% annually in the coming years from the current Rs. 5750 crores.

■ New product launch with aggressive marketing will lead to turnover growth: Eurocore GmbH, (acquired in 2006) has added invasive products ( Stents and Catheters) to Opto’s product portfolio. Eurocore’s products are CE certified and have market potential of USD 4bn. Once USFDA approval is obtained by December 2010, additional USD 6 bn market potential will be added. It sells its products in 26 countries. Criticare Systems Inc(acquired April 2008) has established product and technology leadership in anaesthetic gas monitoring, vital signs monitoring, gas and agent analysis and central station monitoring systems.


■ Cost cutting measures will lead to margin enhancement : Opto Circuits has shifted around 70% of the assembly and sub assembly works of Criticare Systems International Inc to Bangalore from USA. This will lead to improvement in operating margin of Criticare Inc. Recently, they have acquired N S Remedies Ltd, a Kolkata based manufacturer of medical and interventional products. This company has got CE certification for its stainless steel and cobalt chromium stent. Shifting of some of the production from Eurocore’s German facility will further enhance bottomline of the company by 65-80 basis points.

■ Product patent ,additional money spinner : Opto has got more than 40 product patents which provide them flexibility in product design and development. Additionally they can monetize this patent by leasing it to other interested parties .The company and its subsidiaries have recently entered contractual terms to private –label its gas analysis, vital signs and pulse oximetry modules for a few Fortune 500 medical devices companies.

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