The divestment of vision care business means the company is getting rid of an ailing unit and Bausch & Lomb will be able to give a renewed thrust to its eyewear business which is a core competency area of the company. Although vision care business has been expanding (which contributed Rs 27 crore to thetotal turnover of the company for fiscal 1999), the division has been making losses since its inception given the low level of eye care and lack of awareness of contact lenses in the country.

Bausch & Lomb had turned around in fiscal 1998 and since then the company has been treading a high growth path. The company came out with a rights issue in 1998 to repay its high cost debt.

For fiscal 1998-99, too, the company has come out with an impressive performance. On a 35 per cent sales growth to Rs 89.71 crore, the company posted a 154 per cent rise in net profit to Rs 13.61 crore. The sharp growth in net profit is in the backdrop of a jump in sales growth, a rise in other income and saving on interest cost. Thanks to the financial restructuring, the company had undergone in fiscal 1998, the interest cost has fallen sharply from Rs 2.65 crore in fiscal 1998 to just Rs 28.57 lakh. Other income shot up from Rs 1.62 crore in 1998 to Rs 4.04 crore as the company received Rs 1.75 crore from erstwhile Indianpromoters, which was earlier considered doubtful of recovery.

The growth in turnover is mainly due to higher exports in eyewear products. The eyewear business contributed Rs 62.7 crore (a growth of 33 per cent) to the total turnover. The company has reduced its accumulated losses from Rs 15.86 crore in fiscal 1998 to Rs 2.23 crore in fiscal 1999.

On an equity base of Rs 24.47 crore, the annualised EPS works out to Rs 5.58 for fiscal 1999. This discounts the current market price of Rs 110 by a multiple of 19.74. In view of the current restructuring and several new products launched in fiscal 1998-99, the company should enjoy a higher discounting in future.