ValuePickr Forum

TARSONS products ltd

Drhp Notes

  • •TARSONS is among the top 3 plasticware laboratory equipments manufacturing companies of India. As of March 31, 2021,the co has a diversified product portfolio with over 1,700 SKUs across 300 products used in various laboratories across research organizations, academia institutes, pharmaceutical companies, Contract Research Organizations (CROs), Diagnostic companies and hospitals.
  • • End consumer:The end customers of our Company’s products mainly include research organizations, academia institutes, pharmaceutical companies, CROs, diagnostic companies and hospitals (Indian Institute of Chemical Technology, Dr. Reddy’s Laboratories, Dr. Reddy’s Laboratories and Dr. Lal Path Labs.)
  • •Scuttlebutt notes- Thyrocare using Tarsons products.
  • •Tarsons has a large network of distributors of over 141 distributors on 31st March 2021; ~75-80% of the total distributors have been with Tarsons for over 20 years indicating a strong supplier and distributor relationship and a stable distribution network.
  • •33% of total revenue came from overseas market in FY21 vs 26% in FY20. Tarsons sell products to more than 40 countries and has plans to export to ~120 countries in the next 5-10 year.
  • •Revenue from sale of goods to top 10 distributors was representing 37.33%, 39.97% and 43.49% of total income from sale of goods for Fiscals 2021, 2020 and 2019, respectively.
  • •Trade Receivable (cr)= 15% of total assets.

Net proceeds of the IPO to be used in 2 ways:

  1. Co’s expansion plan- The net proceeds will be used for expansion at Panchla for current products as well as new products.

  2. Repayment of ₹75cr of borrowings.

Opportunity size:

Global healthcare sector is expected to grow at a CAGR of 8.9% and medical devices & technology sector is expected to double by 2025F.

Net Sales 228 175.90
Growth % 29.6% -2%
Profit Before Tax 92.43 53.13
Growth % 74% -5%
Net Profit 68.87 40.53
Growth % 70% 4%
Basic EPS (Rs.) 13.43 7.94


  1. Shift happenning from glass consumables to plastic consumables as they have a long shelf life in addition to being unbreakable and inexpensive as compared to glass. Indian plastic labware market is ₹1225cr. Market share of Tarsons is around 12%. The domestic market for plasticware lab equipment in India is expected to grow at ~16% given the huge adoption of plasticware products over glassware products.

  2. Debt equity and overall gearing ratio improved at 0.09x and 0.17x as on March 31, 2020 as compared to 0.37x and 0.46x respectively as on March 31, 2019.

  3. Tarsons has 5 manufacturing facilities in West Bengal with the sixth facility under development. The latest facility that is to be developed in Panchla has a capacity and area equal to approximately the combined capacity and area of all its other facilities. This will allow the company to manufacture double of its current production effectively providing a potential to double its revenues as well. This facility is intended to be funded from a combination of internal accruals and proceeds of the Offer.

  4. The Make in India initiative is aiding Tarsons to bring in affordable consumables and reusables by making them in India at 15- 20% lower prices than imported products.

  5. The best profitability ratios in the industry.

Strategy going forward:

Tarsons is aiming at venturing into the development of new end products with high realization and higher value and transitioning itself from a Life Sciences company to a Bio-Tech company.

Tarsons’ upcoming manufacturing facility in Panchla will enable the entry and expansion of the company into the new product segment comprising of PCR, cell culture, Serological Pipettes among others.


  1. Around 75% of raw materials are imported. However, the prices these high-grade resins (despite being a crude derivate) are not as volatile as the crude prices, and are generally passed on down the value chain. In Fiscals 2021, 2020 and 2019, cost for raw materials was ₹44.8cr, ₹38 cr and ₹42.2 cr, respectively, which accounted for approximately 19.16%, 21.18% and 22.86% of total income, respectively.

  2. Competition from large companies like Corning, Thermo Fisher and Eppendorf have dominated the market due to their strong R&D facilities and brand name.

(Thermo Fisher Scientific have increased their production for PCR based detection kits.)

  1. The approval for conversion of majority of the Jangalpur Land from agricultural land to non-agriculture land is yet to be received. For Fiscal 2021, Jangalpur facility contributed 58.00%, of the total consolidated sale realisation of theCompany.

Speaking from personal experience + scuttlebutt, their lab products (especially plasticware) do not stand up well compared to their competitors. My lab and I have used their vacuum desiccators as well as micropipettes and found them of poor quality, so prefer Finpipette/ ThermoFischer.
As for reusability- hardly! Plasticware, like Pasteur pipettes or centrifuge vials, is one-time use only and cannot be reused due to contamination.


A few observations from drhp

  1. Only 6 employees in R&D & Quality respectively . If quality & customizing products are so critical for customers in this industry ,how do they take care of them with just 6+6 employees out of 480 employees in total ?
    2 The top & middle management seems all related so there are too many related entities leading the business . Though this could be perceived as skin in the game but it also could lead to some issues such as - a) taking non-consensual /difficult decisions
    b) management increasing their salaries disproportionately to corner profits as they grow
    c) currently no track record of sharing fruits of business with other shareholders . So one would have to take them on face value that they would reward shareholders as they grow . Some of smaller compaies such as DHP india has similar margins but >50% of their market cap is parked in mutual funds .SO Difficult to judge the capital allocation record
    3 The financials are only for 3 years .Having burnt my fingers in some SME stocks in the past where last year numbers showed significant growth compared to prior year (again just 3 yr data ). I did the error of projecting those growth rate to arrive at apprimate intrinsic value

Open to feedback from fellow members & incase someoen could throw more light on promotors & medium/long term track record on this company . It would be really helpful

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