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WHAT THE NUMBERS DO NOT SAY<br />
Success Drivers<br />
Diversification into Invasive Segment<br />
The acquisition <strong>of</strong> Eurocor leads to product diversification and<br />
enables <strong>Opto</strong> to enter the invasive segment and enhance its product<br />
portfolio. On the other hand, it can utilize Eurocor's distribution<br />
network which is in 36 countries to enhance our reach to distribute<br />
our products. OCIL is in the process <strong>of</strong> integrating its operations with<br />
EuroCor<br />
US FDA approval for SpO sensors<br />
Emerging Outsourcing Opportunities<br />
Huge Market to be Tapped<br />
Emerging Domestic Demand<br />
2<br />
The US market size <strong>of</strong> this product is estimated at 70% <strong>of</strong> the total<br />
global demand <strong>of</strong> US$0.5bn and <strong>Opto</strong> has a market share <strong>of</strong> 2.5-3%<br />
there<strong>of</strong>. In FY06, Mediaid, OCIL's 100% subsidiary received a new<br />
distribution and pricing agreement (DAPA) from a Defence<br />
Personnel Support Centre (DPSC) based in Philadelphia. With this<br />
agreement, the company would be able to distribute the FDA<br />
approved SpO2 Sensors and Patient Monitoring Devices at specific<br />
prices through the Medical Prime Vendor Programme (MPVP). At<br />
this point in time, <strong>Opto</strong> is the only company in India to have an FDA<br />
approval for exporting medical devices and an agreement with DPSC.<br />
There is a visible trend among the OEMs in this sector to outsource<br />
the design and manufacture <strong>of</strong> opto-electronic devices and valueadded<br />
subsystems to fully integrated, independent manufacturers. If<br />
this trend gathers momentum a niche manufacturer like <strong>Opto</strong> could<br />
be a significant beneficiary.<br />
The estimated market-size that <strong>Opto</strong> can cater to in non-invasive<br />
sensing for healthcare with sensors and pulse oximeters exceeds<br />
$880mn.<br />
Given India's growing population and the fact that there are close to a<br />
million hospital beds in India (marginally more than the US) for a<br />
population which is over four times the US population, there exists<br />
immense scope to supply patient monitoring devices, sensor probes<br />
and other medical equipment to the Indian hospitals.<br />
Penetrating New Markets<br />
The global market size for stents is estimated to be US$8bn <strong>of</strong> which<br />
USA comprises <strong>of</strong> US$4bn, Europe US$3bn and rest <strong>of</strong> the world<br />
comprising <strong>of</strong> US$1bn. The stent market is growing at 14% pa.<br />
EuroCor has recently received CE approval for its stents, which<br />
presents them an opportunity to penetrate the non US & Japanese<br />
markets market using our distribution setup and low cost<br />
manufacturing advantage. The domestic market for stents is also very<br />
big with over 60,000 stents sold in 2005 which is likely to go up to<br />
over 80,000 in 2006.<br />
Qualitative Improvement in Financials<br />
The ROE (RONW) has improved significantly from 23.4% in FY03<br />
to 45.9% in FY06. More importantly the quality <strong>of</strong> ROE has<br />
improved significantly with increasing contribution from Net pr<strong>of</strong>it<br />
Margin (NPM).<br />
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