Tarsons Products Limited is an Indian labware company engaged in the designing, development, manufacturing and marketing of 'consumables', 'reusables' and 'others' including benchtop equipment, used in various laboratories across research organizations, academia institutes, pharmaceutical companies, Contract Research Organizations ('CROs'), Diagnostic companies and hospitals. As of June 30, 2021 company had a diversified product portfolio with over 1,700 SKUs across 300 products. The product portfolio is classified into three key categories which include consumables, reusables, and others. 'Consumables' category includes products such as centrifuge ware, cryogenic ware, liquid handling, PCR consumables and petri dish, transfer pipettes and others. 'Reusables' category includes products such as bottles, carboys, beakers, measuring cylinders and tube racks. 'Others' category includes benchtop instrumentation such as vortex shakers, centrifuges pipettors and others. Company caters to a diverse range of end customers across various sectors which include research organizations, academic institutions, pharmaceutical companies, CROs, diagnostic companies, and hospitals. Some of the end customers include customers such as Indian Institute of Chemical Technology, National Centre for Biological Sciences across academic institutes and research organizations; Dr Reddy's Laboratories, Enzene Biosciences across pharmaceutical sectors; Syngene International, Veeda Clinical Research across CROs; and Molbio Diagnostics, Agappe Diagnostic, Metropolis Healthcare, Dr. Lal Path Labs, Mylab Life Solutions across other sectors such as diagnostics. They distribute the products to these end customers on a pan-India basis through the authorised distributors. Company currently operates through its five manufacturing facilities located in West Bengal. The key manufacturing facilities are ISO 9001:2015 and ISO 13485:2016/NS-EN ISO 13485:2016 certified. In addition, they have received CE-IVD certificate for the products such as micro and macro tips, cryo vials and centrifuge tubes which indicates that the products of the company have been assessed by the manufacturer and deemed to meet EU safety, health and environmental protection requirements enabling the Company access to the European region. As per financial performance, Tarsons Products Limited has posted total income/net profits of Rs 184.72 Cr / Rs 38.93 Cr (FY19), Rs 180.05 Cr / Rs 40.29 cr. (FY20), Rs 234.29 Cr / Rs 68.77 Cr (FY21) and Rs 71.13 Cr / Rs 24.84 Cr (Q1 F22). So company has posted good growth over last couple of years. They have posted an average EPS of Rs. 10.55 and average RoNW of 25.73% for last 3 fiscals. Issue is priced at a P/BV of 12.54 as per NAV of 52.8 on 30.06.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 51.14 and if we annualise FY22 earnings, P/E is 35, which looks fully priced. As per RHP, there are no listed peers in market. On BRLM's front, three lead manager is associated with this IPO, and have handled around 50 IPO in last three fiscals. From last ten IPOs, three is opened below issue price and remaining are opened above issue on the day of listing. As of now, six are trading below issue price and other are trading above issue price. ( As on 10.11.21) As per financials, TPL has shown good growth, RoNW is 28.19% and P/E is around 51 as per FY21 earnings, which looks fully priced. Company is in manufacturing of labware consumables, reusables and others. This sector is expected to grow at good rate and company is able to beat industry growth rate. Performance of BRLM is poor. So, we are giving SUBSCRIBE rating to this IPO for listing gains as well as long term.
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