Opto Circuits near 4-year lows on heavy volumes

The stock currently trading at its lowest level since May 2009, has tanked 17% in past two days on BSE.

Opto Circuits (India) has tanked 9% to Rs 87, extending its previous day’s almost 9% fall, on back of heavy volumes. The stock of medical device maker is currently trading at its lowest level since May, 2009 on the Bombay Stock Exchange (BSE).

As many as a combined 7.84 million shares have already changed hands on the counter till 1226 hours, compared to an average around 1.5 million shares that were traded daily in past two weeks on BSE and NSE.

Last month, the board of directors of the company approved the issue of two million convertible warrants to Mr. Vinod Ramnani, promoter of the at Rs 145 per convertible warrant or the six month average price as on the relevant date, whichever is higher.

The company yet to declare its Q3 (October-December) earnings, had disappointed the market by reporting over 15% quarter-on-quarter (qoq) fall in its consolidated net profit during past two quarters.

Meanwhile, analysts on an average has expecting a 16% qoq growth in net profit at Rs 135 crore on back of Rs 706 crore total revenues in Q3.

According to market buzz the company is facing working capital issue. Most analysts have raised concerns over rising debtor's days and believe that tightening of credit terms could lead to further slowdown in sales.

“Operating cycle of the company deteriorated to 199 days at Sep’12 (Q2) vs. 178 days at Mar’12 (Q1), while debtor’s days increased to 160 days from 131 days at Mar'12,” analyst at JP Morgan said in its November 2012 report.