Invasive Segment May Contribute More To Our Topline In Future

Opto Circuits India (OCI) is a BSE/NSE listed company headquartered in Bangalore. Its range of products includes pulse oximeters, pulse oximeter sensors, fluid warmers, cholesterol monitors and stents.
The company is in a very specialised, technology-oriented opto electronic industry which requires a unique mix of in-depth knowledge and niche manufacturing capabilities.

Can you give us an overview of your business?
With our experience of 18 years, OCI is engaged in the manufacturing of medical equipment and devices in both the invasive and non-invasive segments. The invasive segment caters to the surgical part which consists of stents and drug eluting balloons. The non-invasive segment consists of pulse oximeters, multi parameter monitors, etc. In simpler words, we can say that the one that goes inside the body are the invasive products and the ones that are used for surgical support fall in the non-invasive segment.

What is the status regarding your wholly-owned subsidiary Criticare Systems and Eurocor GmBH?
Criticare (US) and Eurocor GmBH (Germany) are the two wholly-owned subsidiaries of OCI and cater to the non-invasive and invasive segments respectively. The products of Criticare are gas analysers, patient monitors etc. Eurocor caters to the invasive segment and has products like stents, coronary catheters, etc. The topline contribution stands at 74 per cent for the non-invasive segment and 23 per cent for the invasive segment. Going forward we may witness improvement in the invasive segment which may contribute more to the topline.

How many patents do you currently possess and how many have you applied for?
We currently have 35 registered patents and have 30 pending applications for the patents. While there has been a good sort of addition in your topline, the margins seem to be considerably under pressure, both sequentially and on a full-year basis. [PAGE BREAK]

Any particular reasons?
In the last year there has been good addition in our topline but the net profit level has been under pressure due to higher taxation as we had to pay taxes according to the tax structures of the other countries. But we have been able to maintain the margins on the operating levels. Going forward we are likely to see an improvement in the bottomline.

What is the capex plan for FY11?
The capex plan of the company for the current fiscal stands in the range of Rs 120-150 crore. We are setting up a manufacturing facility in Malaysia which is in a tax-free zone for ten years. We are also setting up our own manufacturing SEZ which would be required for growth and benefit on the tax side.

The promoter stake has declined to 27 per cent from 31 per cent on a YoY basis in March 2010. Is it so for any reason?
In the last year we did a QIP of Rs 400 crore for which the stake has witnessed a decline of 4 per cent from 31 per cent to 27 per cent. We have issued warrants in the past and post-conversion early next year the promoter stake would be in the range of 29-30 per cent. Are you looking to raise any more funds in the near future? At present we are not looking to raise any funds and we do not plan to dilute any equity at this point of time.

What about your new product eVision? Has it already started contributing to your topline?
Our new introduction in the form of eVision is a state-of-the-art product of Criticare. Its full-fledged production has not yet started as it is going through some system upgradation.
We are in talks with hospitals and are looking to supply them once it is ready and we hope that eVision will eventually make a good contribution to Criticare.