I believe we need to wait for a couple of quarters’ results before we start it seeing go beyond listing price. Given the kind of tailwinds this Industry is in, I am sure Tarson’s profit would be double-digit (~15%) and that should be a good enough reason to make the prices go higher from hereon.
It’s recently listed hence hourly chart, inverse head & holder breakout takes it back to above issue prices, Q3 will be first maiden quarter results, H1 updates have been good.
Yup. Thanks for the information. He only worked with company for 7 months. This is not the first time it’s happening in the company. Previously also company secretary joined and left the company within 3 months of time. Please find the below screenshot:
Little bit skeptical after this as he worked very less and have now resigned can be just for personal reasons or opportunity so may not be that much of an issue.
Will say just look for quater results and there picture can be more clear
Being listed need not be the driver for hiring a quality Company Secretary. Presence of a seasoned and experienced CS is critical for governance of the company, irrespective of being listed or private company.
Do you Sir really feel it’s not worth investing?
I am tensed as my thesis was it’s a good condition with high margin and invested 2% of my capital.
Please advise.
Thanks
Sorry, I cannot comment on the investing aspect of the stock- my intention was to share exp regarding its products.
Disclosure- not financial advice; kindly consult a financial advisor. All the best.
HDFC come with research report recently.
Major Highlights are:
There are high entry barriers and forging strong relationships with distributors/ultimate users is key to business growth. Due to the unique business model, TPL has high gross and net margins. We expect TPL’s revenue/EBITDA/PAT to grow at 23/31/32% CAGR over FY21-FY24, led by increasing demand and expand footprint in domestic and global markets. TPL could be a long-term compounding story if its plans work out in the expected manner over FY23-FY25.
Key Triggers
Gaining preference for plastic labware in a large addressable market.
Expanding global footprint
Established pan India sales and distribution network
Healthy margins, Gross Margin above 70%.
Wide product portfolio with established brand in the domestic market and strong distribution network.
Growth potential for the plastic laboratory ware industry.
company may get accepted under PLI scheme. Risk:
Moderate scale of operations
Long working capital cycle
Project risk and continuous capex requirement in the industry
Covid related boost in sales which was 30% in FY21
Remaining stake sale by PE investor.
out of the IPOs last year, the one that we have built a substantial position in is Tarsons. It is a provider of lab equipment and equipment to the diagnostic labs. Dr Lal PathLabs for example used to be a Tarsons customer. Tarsons has built a business with 50% EBITDA margins, 30% PAT margins in an industry which is around Rs 1,200 crore but as the specialty chemicals industry and the pharma industry grow, we reckon the lab equipment space will grow similarly because they will supply to the speciality chemicals companies who in turn will supply to the pharma companies.
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Tarsons is the dominant player in this lab market. It is a small company today with Rs 300 crore top line but 30% PAT margins and our discussions with dealers and distributors of Tarsons suggest that this is a well run, moated company with very few competitors in the Indian market.
CAPEX:
The new project on track, will be commissioned in the middle of 2023, It will be gradual addition, there will not be bump at the end of capex.
400Cr. 190 Cr paid. 60 cr to be paid for construction. 150 to 200 cr. will be from cash in next 18 months.
Cost of land of 6 acres is 20 cr. 150 to 160 cr. for upcoming two facilities.
Asset turn will be better as capacity is for value added product, but construction cost will be higher.
EBITDA margin declining in last 3 quarters, We renew prices every year only. Business is
Looking at higher atomization. Follow ESG requirement.
Most of capex would be for sterilized products. in future of 50% of revenue can be from sterilized products.
Key strategy:
Expand product, branding and promotion, robotic handling and cell culture consumables, make in India. Expand in various popular categories. Increase presence in overseas 120 countries in next 7 to 8 years.
Operation efficiency increase by automation and higher sales.
Business Update:
In Q3,41% revenue from international and remaining from domestic.
Historically, Q4 is strongest and Q1 is weakest. Q2 and Q3 is similar. Can not look at Q to Q level.
capacity utilization figure is difficult to give due to complexity of products.
Gross Margin improvement due to value added products, increase in revenue of sterilized product.
Other expenses due to packaging cost and paper prices. Employee expense higher to execute capex and R&D. These cost will be drying up and as revenue goes up.
Not participating in 45% of market, with launching of cell culture categories, will participate.
First manufacture for new products from India, will be competitive with MNCs.
Export margin is lower for 5 to 7% at gross level, at net level almost same due to overhead cost is negligible in export.
Covid revenue now at mid to high single digit, more regular product taking over.
New products launching is continuous process.
Aspiration is to have 500 cr sales in CY24.
Gross margin could be on sustainable will be 72 to 73%, EBIDTA could be close to 50%.
Price is comparable to MNC and best in Indian industry.
Know how in West Bengal, no plan to go other state. Sterilization will be in West Bengal so new plants will be in west Bengal.
ROE will be at similar level.
In House sterilization cost is 3 cr annum, can grow to 5 to 6 times ,so installing new sterilization facility which can increase 100 to 120 basis point EBIDTA margin. Looking for it due to increase capability.
Not aware of any peers specifically in Brazil or Mexico. ‘Guangzhou Jet Bio-Filtration’ is a major Chinese peer. Following are some of the other global and Indian peers -
