About Company
Tarson products is an Indian labware company in the design, development, construction, and marketing of plastic lab equipment Company was established in 1983 in Kolkata, West Bengal.
This tarsons product is used for laboratories in research organizations, educational institutions, and pharmaceutical companies, Its products are divided into 3 categories
Contract Research Organization (“CRO”), clinical companies and hospitals.
The company has a huge portfolio of more than 1,700 SKU in 300 products.
Consumer consumption: Centrifuse wear, cryogenic wear, liquid handling, PCR consumables, Petri dishes, transfer pipettes, etc.
Reusables: Bottles, Carboy, Becar, Cylinder measuring, and tube racks.
Others: benchtop instruments such as vortex shakers, centrifuge pipettes, and others.
The company has many reputed organizations as customers educational institutions like the Indian Institute of Chemical Technology and the National Center for Biological Sciences
Doctor. Reddy’s laboratories and Annezer Biosyinses Cross like Sinnene International and Vida Clinical Research
Diagnostic companies with Molibio Diagnostics, Egappa Diagnostic, Metropolis Healthcare, Dr. Lal Path Labs, Mylab Life Solutions.
The company has 5 manufacturing facilities in West Bengal.
Tarsons products revenue distribution across its major segments for FY 2011:
It also has a wide distribution network of 130 plus distributors in India.
The top 9 plus distributors were responsible for more than 54% of sales for Tarson in FY2011.
In FY21, around 33% of revenue was from exports.
The company supplies its products to more than 40 countries.
Consumer Content: 62% Reusable: 34% Others: 4%
Tarson is the largest player in the Lab Equipment Industry in India.
Tarson had geographic revenue and distributor breakup in FY1 21
The company has performed well in the recent past with a Roe of 31% and a net profit margin of 29.4% in FY21.
Why ROCE is very important in stock the selection process-2022
fundamental analysis of tarsons products
The fundamental analysis of Tarsons Products Limited is as follows:
Tarsans product industry observation
The global healthcare market is expected to grow at a steady CAGR of 8.9% from 2025 to $15 trillion.
There will be a healthcare services market of approximately $12.3 trillion that will dwarf all other segments of the industry.
There is a lot of potential for the expansion of the healthcare sector in India.
Health care spending as a % of GDP in India was only 3.5% in 2018.
We can say that the healthcare sector in India has huge potential for growth.
The Indian healthcare market is expected to undergo a boom with a CAGR of 23% to reach a market size of $557 billion by 2025.
While the global laboratory equipment market is expected to grow at a steady CAGR of 4.9% till 2025.
The plastic lab equipment market is expected to grow at a rate of 10.5%, more than twice the market rate.
This will be due to the widespread acceptance and replacement of traditional glass appliances with plastic ones.
The overall market for plastic products is expected to grow from 46% to 67% in 2015 and 52% of the overall market at present.
This transition from glass to plastic is expected to reach 75% in India by 2025 from the current 52%.
The fastest CAGR for Plastics Lab Equipment is expected to be witnessed in India by 2025 with an estimated CAGR of 16%.
The key growth driver for the worldwide plastics lab equipment industry is:
The factors are–
The rise in lifestyle diseases and conditions has led to increased research and development.
Increase in outsourcing in replacement of glass pharma industry with plastics.
Covid-19 brought attention to healthcare due to its longer shelf life and recyclability.
This was an overview of this industry.
Competitors to Tarsan Products
Now let’s talk about the competitors of Tarson products.
On the above data, you can see that Tarson Products is one of the oldest companies among its competitors.
It is one of only a few companies that deal in consumable, reusable, PCR/cell culture.
It has its own manufacturing plant in India.
Company Financial
Now let’s talk about the financial position of the company.
In the chart above you can see that all the figures are in crores.
First, look at net worth. This figure increased from 248.71 crores in FY 2010 to 295.95 crore in FY21.
In total revenue, this figure increased from 180 crores to 234.29 crores.
This figure in profit after tax increased from 40.53 crores to 68.87 crores at the end of FY 2011.
Comparing Quarter 1 with FY 2011 and FY 2012, we can see an improvement here as well.
In total assets, this figure increased from 235.66 crores to 364.77 crores.
In total revenue, this figure increased from 43.57 crores to 71.13 crores.
This figure increased from 6.97 crores to 24.84 crores in profit after tax.
Significant Proportion of Tarson Products Compan
Important Ratios of Tarsan Products Company are as follows:
The net profit margin is 29.40%.
The operating profit margin is 40.58%.
13.43% per share.
The PE is 49.29.
Debt to equity is 0.356.
The current ratio is 1.86.
The 2-year sales CAGR is 12.62%.
2-year-old profit CAGR is 32.96%.
Pros and Cons of Tarsons products
Now we will talk about the pros and cons of investing in Tarson products.
Pros
Invest now in the pros first.
There are major opportunities for the rise of the healthcare industry, especially the diagnostics space and crams space.
The diagnostics space in India is untapped, while the CRAMS industry has a low-cost and highly skilled workforce in India.
Tarsons Products has been in this industry of manufacturing laboratory equipment for more than 3 decades and is the largest player in India with a manufacturing plant.
Thus, it has a brand advantage in India in this area.
The company has good export potential considering the low-cost manufacturing advantages.
The company will focus on ODM sales in mature markets such as the United States and the European Union.
The company will expand using branded sales in emerging markets such as South America and the Asia Pacific.
The largest share of sales falls on more than 60% of consumable products.
This is a category that demands constant demand for the industry as most of them are single or limited use.
So these were the advantages.
Cons
Now let’s talk about some negative things as well.
The company imports more than 75% of its raw materials and over 44% of its imports are from the European Union.
Its top 10 suppliers accounted for 76.8% of raw material requirements in Q1fy22.
Hence the company depends on its suppliers for its raw materials.
The loss of any major supplier would be very damaging to the company.
Raw material cost is a significant part of the overall cost at 31.6% of the total expenditure in FY2011.
Most raw materials are exported, so the price of a company’s raw materials can be negatively affected by inflation and foreign exchange volatility.
The company is threatened by environmental regulations that may limit the use or sale of plastic products in the future.