Market expert Sandeep Jain recommended Tarsons Products Limited on the popular show as his top bet. The stock was recommended in a popular TV show ‘Jain Saab ke Gems’ in conversation with Zee Business Managing Editor Anil Singhvi.
Tarsons Products is a plastic and labware manufacturing company which manufactures disposable plastic labware, centrifuge ware, cryo labware, liquid handling system and instruments, Jain said while speaking about the company.
Tarsons Products Limited, which launched its public issue in November last year, kept the IPO share price band between Rs 635-662. The company witnessed a strong listing as well, Jain said.
Despite market upheavals, the stock has managed to trade above its issue price and was trading at Rs 729 at the time of recommendation.
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Talking about the business, Jain said that entry barriers for this segment are very high which will shield it from excessive competition. The company accounts for 20 per cent of the market share.
He stated that the company has excellent branding, marketing infrastructure and distribution network.
CAGR of the industry is very good, Jain said adding that this segment is expected to grow with a CAGR of 15-16 per cent which will also benefit the company, he said.
Apart from a strong diversified network, the company has over 300 products in the business infrastructure.
The company which has been in the market for over 3 decades, is credible and has strong promoters, Jain stated.
Company’s return on capital employed (RoCE) is 36 per cent while the return on equity (RoE) is 28 per cent, the Tradeswift Director said. Profit CAGR has been 19 per cent for the past 3 years and has been 37-38 per cent presently.
Tarsons Products is a zero-debt company and posted an excellent previous quarter result, he said.
He added that the company had a PAT ( profit after tax)of 29 crore this quarter, compared to 24 crore in the last quarter. The company has high OPM (Operating Profit Margin) and NPM (Net Profit Margin).
Furthermore, he said that the FIIs (Foreign Institutional Investors) and DIIs (Domestic Institutional Investors) have significantly shown confidence in the company and hold 18-19 percent the stake.
The stock has corrected significantly and must be bought at the target of Rs 910, Jain said.