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Thursday, Jun 06, 2002

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Opto Circuits may buy HLL unit

Abhrajit Gangopadhyay


SENSORS maker Opto Circuits Ltd plans to buy the business line of digital thermometers from Hindustan Lever Ltd. (HLL). "Talks with HLL are on, but the deal is yet to be signed'', the Managing Director, Mr. Vinod Ramnani, said.

Declining to detail the deal size, Mr. Ramnani said that the acquisition is likely to be funded through internal accruals. Moreover, the new line of business is likely to add Rs 8 crore to Opto Circuits' revenue for financial year 2002-03. Close to 90 per cent of the products will be exported. The factory has a capacity of 250,000-300,000 units per month.

The global market for digital thermometer is estimated to be close to 22 million units.

It may be recalled that HLL bought the manufacturing line of digital thermometers from Ponds India Ltd.

Meanwhile, Opto Circuits is in talks with a US healthcare major to divest a part of its equity in its favour to gain the marketing rights of all its products in India. "In case the company decides to transfer its entire business from Singapore, it could add almost Rs. 200 crore to our topline'', Mr. Ramnani said.

Opto Circuits could offer as much as 50 per cent of its equity to the U.S. company "if things work out well'', he said.

Opto Circuits is also in talks to buy out a small US firm with similar product line. The target company has reported a revenue of $3.8 million in 2001 and has projected $7 million for the current year. "Discussions on valuations and stock-swap ratio are taking place'', he said.

Admitting that business slipped post September-11, Mr. Ramnani said that "business for the next year is looking very bright''. Increased demand for security scanners from the US authorities would help Optima report a net profit jump of 25 per cent for 2002-03. "The size could go up considerably if the US alliances come through'', he added. For the first nine months in 2001-02, the company has reported a net profit of Rs. 6.24 crore over a sales of Rs. 34 crore. Opto Circuits is a 100 per cent export-oriented unit which manufactures healthcare sensors and fluid warmer sensors.

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