Broker's call to Buy Tarsons Products with the target price of Rs. 724
Mumbai : Life sciences company, Tarsons Products Limited, which is amung the leading companies to manufacture and supply laboratory plastic ware products, possesses healthy margins with strong return ratios and likely to be debt free in couple of years. Therefore, HDFC Securities has a buy call on Tarsons Products Ltd. with a target price of Rs 724. The current market price of Tarsons Products Limited is trading at Rs 665.
Tarsons Products Limited, raised Rs. 150 crore through an IPO and would utilise the proceeds for repayment of borrowings and expanding its facilities to increase its product portfolio. The company's ipo was listed on both the indexes BSE and NSE, on November 26th at a price of Rs 682 per eq. share. Later, its shares have also reached at lowest of Rs 581.45, much below its listing price. While it has also touched the highest level of Rs 924.90.
There has been an increasing trend of using plastic ware in laboratories given that it is superior in terms of shelf life, handling, and safety benefits. Plastic labware products are expected to grow at CAGR of 10.5 per cent over 2020-2025 as compared to overall 4.9 per cent growth in labware products, thereby increasing its share to 67 per cent from 52 per cent currently.
Tarsons Products Limited is expanding its footprint both in the domestic market as well as overseas markets. Increasing tariffs levied by US and tightening of environmental protection norms on Chinese goods are also benefitting companies like Tarsons Products Limited as India is proving to be a cost-effective alternative to China.
The company has proven its mettle as it manufactures for many private US and European labels while selling under its own brand in Middle East, Asia and Africa regions. It possesses healthy margins with strong return ratios and likely to be debt free in couple of years.
Recently, Tarsons Products Limited released the business update to the exchanges, revealing that the overall demand environment for the company’s products remained strong in H1FY22 despite localised lockdowns in various parts of the country during the period.
