Shares in Opto Circuits, which dropped as much as 11.57 per cent during intra-day trade on Tuesday due to concerns over ICRA’s rating suspension of its facility, recouped majority of its losses to end marginally lower after the company reported an increase in consolidated net profit for the quarter ended June 30.
Opto said consolidated net profit after minority interest rose 18.59 per cent to Rs 138.01 crore for the quarter ended June 30 compared with Rs 116.38 crore in the year-ago period. Total income increased 36.53 per cent to Rs 717.79 crore.
Opto shares ended 1.33 per cent lower at Rs 147.95 on the Bombay Stock Exchange (BSE), after touching a low of Rs 132.60 during the day’s trade.
Credit rating agency, ICRA, last week suspended the rating assigned to a Rs 538-crore facility of the healthcare equipment maker.
ICRA had cited concerns about Opto’s “stretched liquidity position”, saying factors such as high capital spending were resulting in “negative” free cash flows. The rating agency also said Opto had not provided information it had requested.
Although Opto shares did not fall immediately after ICRA issued its statement on August 8, the shares fell in each of the previous two sessions, with declines accelerating on Tuesday on concerns over the company’s margins and cash flows.
The sharp fall prompted Opto Circuits’ chief executive officer (CEO) Srinivas M to issue a statement on Tuesday, saying it had “disengaged” from ICRA services in July 2012, and instead asked CRISIL to rate the fund-based facilities for fiscal 2012.
Opto questioned the basis on which ICRA had drawn its conclusions, saying it had failed to elicit a distinction between the standalone entity and the credit facility.
The company CEO added Opto Group and its entities continued to enjoy the support of its secured lenders.