RESPONSE TO READER'S QUERY: @NR 16/9/2011: OPTO CIRCUITS

First examining the TECHNICALS, the Price Charts indicate a reasonably good support around 212 levels. However the basic Chart pattern is not very encouraging. On the downside, after 212, the next support is at 204. If it breaks 204 on a closing basis, then it could go down all the way to 185 levels or thereabouts. On the upside the first major resistance is around 256 levels. Trend reversal would be confirmed only if it decisively trades above 268 levels.

Now with technicals out of the way, a look at the FUNDAMENTALS shows that the Scrip is in the right space with a burgeoning catchment zone as Healthcare and ,in particular, Cardiac care awareness and need grows exponentially. The Company's products, particularly the Cardiac stents and allied equipment have a significant acceptability in the Medical circles. The slated Revenue growth rate of approx 30% as guided by management seems achievable and the amalgamated margins after the overseas acquisitions at about 20% odd augur well. One could also argue that the proposed IPO of the wholly owned unit could also be a kicker. The only negative in the FY11 Balance Sheet seems to be the burgeoning debt levels which have gone up substantially. So fundamentally, info in the public domain does not explain the poor price performance of the Stock of late.

Taking a balanced view, despite the poor Technicals, I feel the Stock is a staggered BUY at these levels CMP 233. It can be accumulated on all dips as long as 212 levels hold. However in the Short term I would not expect the Scrip to present any great fireworks on the upside either, So Buy and Hold for the long term seems to be the solution.