Tarsons Products - Building Capacities To Diversify Offerings: ICICI Securities Re-Initiates Coverage

ICICI Securities Report

Tarsons Products Ltd. offers a range of plastic labware products. Over the years, it has gained ~25% market share (Source: Company) in a segment which was historically dominated by multi national companies.

Its network consists of over 150 distributors and more than 500 sub-distributors which provide pan-India visibility to its products. Besides, it has built a sizeable presence in the export market (~33% of revenue) through a mix of branded and original design manufacturing sales.

Tarsons is now spreading its wings in niche areas like cell culture and is adding two new plants at Panchla and Amta (both in West Bengal) which we believe may double its available capacities by CY24E.

Excessive inventory in the system and overheads of new plants may keep a check on growth in the near term.

We re-initiate coverage on the stock with 'Add' rating and target price of Rs 590 on 22 times FY25E enterprise value/Ebitda.

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