Should Tarsons products stock hold or sell after listing

 

What should Investors do in Tarsons products Share?

Tarsons products ltd is into the of manufacturing of bottles, Carboys , sell culture products, PCR Products, general labware products, liquid handling etc. Company products are more demand into hospitals & Laboratories. Due to Coivd 19 pandemic, company products were more into the demand. Integration of robotics in manufacturing gives boost to the company for meeting the future demand.

We will try to find out whether Tarsons products stock hold or sell after IPO listing? Can new traders & Investors buy Tarsons products stocks after IPO listing?

Before buying and selling shares of any company, it is very important to understand the valuations and fundamentals of the company.  it is very important to understand the business model of the company. Let us first understand in brief what the negative & Positive points of the company.

Question:

What are the negative points of Tarsons Products Company?

Answer:

1) The revenue of Tarson Products Company is only 229 crores, therefore it is a  small  size company.. But Tarson products IPO price at 635rs and 662rs per share looks very expensive with such small revenues of 229 crores. But the size of the company being small cannot be a negative point off, so we discuss further.

 2) Tarsons Products Ltd Company is going to list with nearly 38.50 P/E of multiple.  In the manufacturing sectors such valuations does not exist on better side.  If we calculate then Tarsons Product Company is asking for more than of 2900cr market cap with the small sales of 229cr of the company.

3) Price to book value of the company is nearly 13.5 and market cap to sales is 14 multiple approximately  

But If Tarsons Products Company has negative points then We will also find some Positive points of the company as well.

Questions:

What are the positive points of Tarsons products Company?

Answer:

1) Tarsons Products Company has very good financials track record.  If we will calculate the company operating profit margins then its looks very good.

2) Cash flow of the company is very good. Even company had done some expansions in the past with its own cash flow funds which is positive thing.

3) Nearly 150 crore funds from IPO will go in favour of the company. From this step Company will become debit free. Rest of the IPO raised funds will be used by the company for meeting  capital expenditure for a new manufacturing Unites at West Bengal., Panchla.  

4) Company promoter’s track record is very good and very experienced management is handling business of the company since 1983.

5) On the final day of IPO, It was subscribed by  77.49 times out of which retail investors portion was subscribed by 10.5 times & QII portion was subscribed by 115.7 times & NII portions had received bids of 184.58 times. All these signs also goes in the favour of the Tarsons Products IPO.

6) Tarsons Company products was in more demand in Covid 19 pandemic, In FY20, Company profit was increased If we will check in documents then Plastic Labware market was estimated nearly 1220cr & Company is expecting to see growth with more than 15% rate by the end of FY25.

7) Company has also global presence and demand for the plastic laboratory products are expected to reach $16 billion by FY25 in the last financial years it was nearly $8 billion.

8) Tarsons Products is an Indian labware company which is into the business of manufacturing and marketing of consumables, reusable’s products. Company has strong number of client base which includes the National Centre for Biological Sciences, Indian Institute of Chemical Technology, Syngene International, Metropolis Healthcare, Dr Reddy’s Laboratories and Dr Lal PathLabs.

Tarsons Products stock hold or sell:

If we will carefully read the above discussion then we will find the Tarson products stock is going to list with higher valuations. In the Bull Run of the Indian market every company is coming up with the expensive valuations but some of the past IPO got bumper listing because promoters of the company had left some amount of profit for shareholder after listing of their companies IPO’s.

Tarsons products is getting premium into the grey market which is nearly 150rs to 180rs which has reduced from nearly 250rs on final day of IPO Subscription. We can’t trust 100% on grey market premium of any company IPO because it may increase or decrease on the IPO listing day. But still we are expecting positive listing of Tarsons Products stock.  Tarson Products Company is a life science company. Even there are valuations of the company is very high but still Share holders of the company & IPO bidders may get 10% to 15% or few more returns on listing day.

It is advisable to trader try to book partial profit on listing day or trails your stop loss and enjoys the listing gains of Tarson products. If IPO list opens higher then short term traders should keep strict stoploss of 722rs on closing basis.

Should you buy Tarsons products stock?

As we discussed above that products of the company is in demand. Operating profit margin is also very attractive. There is no question on the small size of the company at current situation but company may do expansion in the coming years but all these things will not happened in few days or months it will take few years. Therefore if any investors want to buy Tarsons products stock then try to accumulate after profit into the stock because IPO price looks very expensive and if Tarsons IPO will list near 750rs or above then valuations will be extremely high. Investors should not jump into the stock after listing.

 Long term target of Tarsons Products stock:

As per the company expansion plans, it looks company management has more focus to increase its presence into the market. Tarsons Products Company has very experienced management having more than 35 years of experience. We maintain long term targets of Tarson products stock is of 790rs+. But it is advisable to accumulate this stock only after profit booking from higher levels. Long term targets will be still intact even if stock goes on lower levels. Holding period id 1 to 2 years. If Tarsons products stock gives closing below 620rs in coming weeks or months then avoid buying the stock and let this stock settle on lower levels then start accumulate it. 

If you get Allotment of Tarsons products shares then it is better to book profit on higher levels. If after tarsons products IPO listing price targets of 750rs or above will be met then don’t rush to buy the stock. Traders may raise their stop losses as discussed above.

Our recommendations on Tarsons product stock after IPO listing:

Only high risk taking traders should enter in into Tarsons products stock after its listing with the stoploss of 720rs on closing basis. New investors should not invest on higher levels.

Must Note:

Given Stoploss of 720rs as per premium of GM in tarsons stock. It is subject to change if IPO listing will not meet as GM expectations. If There will be correction into Indian stock market in coming days then we may see heavy profit booking into all recently listed IPO’s. Stay alert and keep stoploss on your trader after listing.