Neutral on Opto Circuits - Motilal Oswal

Opto Circuits (OPTC IN; Mkt Cap USD1.1b, CMP Rs263, Neutral)

Opto Circuits reported 62.5% YoY revenue growth in 3QFY11 to Rs4.18b, 39.4% YoY EBITDA growth to Rs1.23b and 46% YoY growth in adjusted PAT to Rs961m. Top-line growth was led mainly by the acquisition of CSC (Cardiac Science Corp) which reported revenues of Rs640m.

An delayed financial turnaround at CSC, large goodwill and debt on its books remain concerns. Based on our revised estimates, the stock trades at 14.5x FY11E EPS, 12.5x FY12E EPS and 9.5x FY13E EPS. We maintain Neutral with a revised target price of Rs274 (up from Rs241 earlier).

Source : Equity Bulls

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