tarsons products ltd share price Management discussions


After a prolonged battle against the COVID-19 pandemic, the global economy started to progress towards 2021. This progress was led by a faster vaccination drive and timely interest rate redressal. According to the IMF, the global economy grew by 6.1% in 2021 after a contraction of 3.3% in 2020. Moreover, there are signs that historically low-saving countries tended to accumulate greater savings in the wake of the pandemic, putting their finances on firmer footing going forward.

The second half of 2021 was a bit volatile, owing to the global energy crisis, new variants of COVID-19, mobility restrictions, and supply chain disruption, hampering global trade. The Russia-Ukraine conflict became a key concern for the global economy by the end of 2021. It led to a rise in crude oil prices, and it crossed USD 120 per barrel, further raising prices of essential commodities and building inflationary pressures.


The IMF projected a growth rate of 3.6% for 2022 and 2023 as well. Significant inflation and several central banks tightening monetary policy caused global interest rates to increase. Trade flows were further disrupted by global political tensions, interrupting productions, sanctions, and impairing access to cross-border payment systems. Following this, energy and food availability and prices were majorly impacted and continue to remain a key concern.


According to the FICCI Economic Outlook Survey, the Indian economy is expected to grow at 7.4% in 2021-22, following a contraction of 7.3% in 2020-21. Thereby, showcasing steady recovery in the Indian economy.

During the first half of the financial year 2021-22, the Indian economy showcased robust growth owing to a more intensive vaccination drive, Government stimulus packages, the PLI Scheme, and an accommodating stance on RBI policy. Furthermore, the economy benefitted from high consumer demand and ease in mobility restrictions. Thereby, Indian GDP grew by 20.1% in Q1 2021 against a decline of 24.4% in the same quarter of previous year. Following a similar pattern, Q2 showcased a growth of 8.4% in 2021 against a contraction of 4.4% in Q2 2020.

The Indian economy experienced volatility during the second half of the financial year 2021-22. Shortage of coal, an energy crisis, and a rise in inflation led by higher crude prices were the major factors that became key concerns for the RBI. Despite these challenges, the festive season demand has maintained the higher consumer demand and Indias GDP increased by 5.4% in Q3 2021-22. Moreover, export figures have also touched an all-time high of USD 669.65 Billion showcasing the impact of the robust policies of the Indian Government. Additionally, GST collections for the financial year stood at Rs 14.83 Lakhs Crores, representing strong consumer demand. Rising geopolitical tensions slowed down the pace of growth in the final phase of 2021-22 resulting in higher oil prices and a cascade impact on rising input costs, this further prompted IMF to lower the growth projection for 2021-22 from 9% to 8.2%.


According to the IMF, India is going to remain the fastest-growing economy in the world during 2021-24. For 2022-23, the Indian economy is expected to witness a GDP growth of 7.2%. Economic activity is expected to further revive and boost demand with increased Government spending - as planned in the Union Budget 2021-22 - and rise in private consumption and investments.

(Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1750782, https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.

aspx?prid=53601, https://gstcouncil.gov.in/sites/default/files/gst-statistics/GST_Revenue_collection_april2022.pdf)


Global Healthcare Market Overview

The global Healthcare market stood at USD 9,858 Billion in 2019-20, showcasing a CAGR of 7.3% in the past five years. This growth was led by the aging population, strong economic growth in emerging markets, and health insurance reforms globally. The global Healthcare market is highly fragmented, with a high number of smaller players in the industry. The Healthcare market can be segmented into different categories namely healthcare services, healthcare IT, medical devices and technology, and pharmaceutical and biotechnology. As the largest contributor to the industry, Healthcare services accounted for 79.2% of the entire Healthcare market in 2019-20, followed by pharmaceutical and biotechnology and the other segments. The top ten players in the industry account for 7-8% of the entire market.


In terms of manufacturing revenue, the global Healthcare sector is expected to increase by 8.9% between 2020 and 2025, reaching USD 15,098 Billion by 2025. The global Healthcare industry is expected to rise as a result of faster economic growth, technological developments, and the increasing prevalence of chronic diseases arising from sedentary lifestyles. However, several risks, such as increased knowledge of alternative therapies and natural remedies, limited Government provision in healthcare services, and stringent Government regulations, might derail the estimates.


The Indian Healthcare industry is valued at USD 198 Billion witnessing a CAGR of 9.1% in the last five years. As the worlds population is aging, there is a rise in the prevalence and frequency of chronic diseases, along with the need for high-quality therapies at lower prices. These factors are driving health investments from healthcare providers and facilitating growth in the Healthcare industry. Indias Healthcare Access and Quality (HAQ) index showcased continuous improvement over the years. From 30.7 in 1990 to 44.8 in 2014-15, 67.3 in 2019-20, and 66.25 in 2020-21, this consistent rise indicates the healthcare system has improved generally.

The Indian Government is undertaking various measures to strengthen the countrys entire healthcare system. This includes the speedy introduction of generic medicines into the market and increased focus on rural health programs, lifesaving drugs, and preventive vaccines, which augurs well for the pharmaceutical companies.

Digital healthcare/telemedicine is in its initial stage and is expanding rapidly in India as following pandemic. Gradually, people are adapting to newer health technologies and intelligent solutions for lowering barriers between hospitals and patients. Artificial Intelligence (AI) and telemedicine technology can build further and better growth prospects. As a result, several major private players adopted telemedicine services. The Ministry of Health and Family Welfare with NITI Aayog released official guidelines for telemedicine practice, enabling registered medical practitioners to provide remote consultation under the supervision of the Medical Council of India (MCI). The Indian Government and companies have increased their focus on the digitalization of healthcare through enhanced efficiency and patient care.

Refurbished medical laboratory instruments, used as backup machines in the best of hospitals, enjoy a ready market in India. For hospitals, which are less sophisticated and situated in districts, the refurbished medical laboratory instruments are ideal for the laboratories due to the substantially lower investment cost.


The Indian Healthcare market is estimated to reach USD 557 Billion by 2024-25, showcasing a CAGR of 23% between 2020-25. This growth will be driven by increasing medicine spendings in the digital healthcare system, leading to further growth. India is propelled to become one of the top 10 countries in terms of medicine spending, with the projection of growth rate increasing from 9% to 12% over the next five years. (Source: Frost & Sullivan)


Lab technicians or scientists employ laboratory equipment to perform tasks such as analysing patients biological samples, preparing cell culture mediums for research, studying cells for diagnosis of various diseases, and more. The market is broadly divided into Consumables (Centrifuge, Liquid Handling, and Cryoware products), Reusables (mainly Bottles, Beakers, Measuring Cylinders, Tube Racks, Flasks, and Carboys), and others.

Overall, the industry is witnessing higher demand and is exhibiting continuous growth. This is led by technological advancement in the field of chemical and biological research, the development of diagnostic centers, and the biodegradability of disposables or reusability of products among other factors. Laboratories have emerged as multipurpose research facilities that host several types of testing mechanisms, novel developments, and research analogies. Furthermore, the trend of research-based studies has been gaining prominence. Thereby, leading to the development of new laboratories in schools and universities, imbibing students interest at an early stage in turn propelling the market demand.

Glass equipment is one of the major contributors to the laboratory equipment market, accounting for 45% to 48% in 2019-20. The global Plasticware Lab Equipment market segment stands at USD 8.4 Billion (Rs 612.5 Billion), with plasticware products making up to 52% of the total Lab Equipment market segment. The Global Labware market is witnessing higher demand for plastic labware which is led by lower breakages concerns, higher flexibility and lower cost.


The global Laboratory Equipment market segment is expected to witness a CAGR of 4.9% from 2020-25. It is projected to reach USD 20.5 Billion (Rs 1,493.8 Billion) by 2025 from USD 16.2 Billion (Rs 1,176 Billion) in 2020. While the global Plastic ware Lab Equipment market segment is valued at USD 8.4 Billion (Rs 612.5 Billion) and is anticipated to grow at 10.5% reaching USD 13.8 Billion (Rs 1,007.7 Billion) by 2025. Asia-Pacific region is going to lead the way in terms of growth with a rise of 7.7%.

(Source: Frost & Sullivan)


Indian Laboratory equipment is valued at Rs 23,520 Million (USD 323.1 Million) in 2020. The Healthcare services and Pharmaceutical industry showed excellent growth in terms of market demand over the past few years. This was led by the greater frequency of chronic diseases, improved healthcare infrastructure, and higher insurance penetration. Furthermore, increased investment in R&D and the expansion of diagnostic centers in India are all driving up the need for laboratory equipment.

India is expected to see a huge shift in lab equipment from glassware products to plasticware products due to the latter being favored more since it enables ease of handling, flexibility, and lower costs. In addition, most plastic lab containers are recyclable. Traditional glassware made from borosilicate glass has heat-resistant properties that makes it non-recyclable, thereon, observing higher demand as a result of increased preference. It is estimated that plastic labware products are going to grow by 23% in the coming years.

The plasticware product is beneficial for the producers since raw material prices of high-grade plasticware resins (despite being a crude derivate) are not as volatile as crude prices and generally are passed on down the value chain allowing the companies to benefit even while the crude oil prices fluctuate.


It is estimated that the Indian Laboratory Equipment market will witness 7.8% CAGR in 2020-2025, to reach Rs 34,205 Million (USD 469.9 Million). Factors driving this growth include concerns related to health issues, increasing penetration of healthcare, improving diagnostic facilities, growth in pharmaceutical R&D outsourcing to India, and a growing focus on Research and Development.

(Source: Frost & Sullivan)


Tarsons Products Limited (Tarsons or The Company or TPL), having an experience of over 36 years, is one of the leading labware companies. The Company possesses expertise in designing, development, manufacturing, and marketing of consumables, reusables, and other labware. TPL produces a wide range of high-quality labware that assists scientific research and improves healthcare. With over 1,700 SKUs and over 300 product categories, TPL holds a diverse product portfolio.

The Company caters to a diverse range of end-customers across various sectors, including research organisations, academic institutions, pharmaceutical companies, CROs, diagnostic companies, and hospitals. Some of the Companys prominent end- customers include the Indian Institute of Chemical Technology and National Center for Biological Sciences across academic institutes and research organizations, Dr. Reddys Laboratories and Enzene Biosciences across Pharmaceutical sectors, and many others.

The Company currently operates through its five manufacturing facilities located in West Bengal. These facilities are vertically integrated and equipped with automated support systems that help maintain quality, increase productivity, and reduce costs.


During the year 2021-22, TPL showcased robust operational performance wherein its revenue from operations stands at Rs 3007.94 Millions indicating a growth of 31.4% compared to last financial year, while the gross profit margins stands at 79.09%. The Company continues to invest in automation to eliminate human error and increase overall performance. Through the development of a new production facility in Panchla, West Bengal, the Company is gradually increasing its manufacturing capacity for both existing and new products. Tarsons Products Limited is focusing on branding & promotion to enhance visibility in the Labware industry to increase brand awareness & loyalty. The Company is diversifying its product line even further by introducing new products in the cell culture & robot-handled consumables. The import-dominated markets for these products are focused on further expansion.

As of 31st March, 2022, the Company sold its products to 40+ countries via 45+ distributors. The Company has also increased its export sales and the total exports stand at Rs 992.92 Crores in 2021-22 compared to Rs 755.91 crores, showcasing a growth of 31.35%. In terms of domestic sales, the Company has a strong and wide distribution network with the help of 152 distributors across the country driving its pan-India presence.


Highlights of the financial results for the fiscal year ending 31st March, 2022 :

• In 2021-22, Revenue from Operations were 3,007.94 million, 31.40% higher as compared to 2020-21, owing to robust demand and growth in the export and domestic sectors, while TPL has reported a gross profit margins of 79.09%

• In 2021-22, the Companys Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was Rs 1526.99 Million, witnessing a growth of 47.62% compared to 2020-21

• In 2021-22, the Company recorded a PAT of Rs 1006.64 Million compared to Rs 688.70 Million in 2020-21, showcasing a growth of 46.16%

• In 2021-22, the Return on Capital Employed (ROCE) stands at 32.7%, while in 2020-21 weve reported 34.64% of ROCE

Particulars (Rs in Million) 2021-22 2020-21
Revenue 3,007.94 2,289.11
EBITDA 1,526.99 1,034.39
EBITDA Margin (%) 50.77% 45.19%
PAT 1,006.64 688.70
PAT Margin (%) 33.47% 30.09%
Earnings per Share (in Rs) 19.46 13.43
Return on Capital Employed (%) 32.70% 34.64%
Return on Equity (%) 27.42% 31.17%
Networth 4,898.30 2,443.38


The Board of Directors of the Company is in charge of establishing and overseeing the Groups risk management framework. The Board is in the process of establishing the Risk Management Committee, responsible for developing and monitoring the Groups risk management policies. The Committee will report to the Board of Directors on its activities. The Groups risk management policies are established to identify and analyse the risks faced by the Group. These policies intend to set appropriate risk limits and controls while constantly monitoring the relevance of these limits in line with the need of the hour.

Risk management policies and systems are reviewed regularly to keep up with the changing market conditions and the Groups operations. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment, wherein all employees understand their roles and obligations.

Risk Impact Mitigation
Industry Risk Given the dynamic nature of the industry, changes could be, at times, unfavorable as a result of their unforeseen nature. The Company has a presence across various geographies and periodically evaluates various developments globally to identify any risk, and implements immediate action in mitigating the same.
Operational Risk Any manufacturing or quality control issues may damage the Companys reputation, adversely affecting the business and its operational results, and financial conditions. The Company invests in automation to avoid human error and for an improved overall performance. Further, rigorous checks are executed to maintain the quality and efficacy of the products as per customer standards.
Forex Risk Any changes in the foreign exchange rate can substantially influence the Companys financial performance because of TPL primarily being an export-oriented Company. The Company is exporting its products while importing raw materials. This provides natural hedge.
Liquidity Risk Any potential inability on the Companys behalf to fund an increase in its assets and to meet its financial obligations may adversely affect TPLs financial conditions. The Companys business strategy is aimed at meeting liquidity obligations while also safeguarding it from liquidity and interest rate risk. Thereby, ensuring stability in its earnings.
Risk Impact Mitigation
Suppliers Risk Any volatility in prices may directly impact the Companys profitability and margins. In case of a significant change in the raw material prices and operational costs among others, profitability, too, may be impacted. The Company has developed close associations with alternative suppliers to protect TPL from any disruption in the raw material supply chain. The Companys raw materials cost currently accounts for approx. 20% of its topline. Hence, any increase in the pricing for raw materials, may not have the same proportionate impact on the margins. Besides, The Company undertakes price increases every year to factor in inflationary impact.


TPL considers its people as valuable assets, and thereby, the Company is focused on developing and nurturing its human resources. Recruitment and retention, learning and development, performance management and review, and communication are all areas where the Company concentrates its human resource efforts. The employee receives regular training to help them achieve operational excellence, productivity, and quality and safety compliance. The Company provides performance-based incentives to its sales team, and none of its staff are unionised. Evaluation of the existing human resource efforts is done regularly by the Company in order to make them more inclusive, employee-centric, and skill-development driven. The Company will continue to place a strong emphasis on creating and maintaining an exceptional workplace culture based on human performance. To promote a tranquil and harmonious work atmosphere, the Company implemented proactive policies. TPL believes that its rapid expansion and positive work environment, along with a high employee satisfaction rate, have helped the Company in attracting a huge number of talented people.

Sales, IT, administrative, finance, marketing, procurement, logistics, design, operations, manufacturing, R&D, engineering, and factory personnel are among the Companys employees. The Companys employees contribute significantly to its business operations. As of 31st March, 2022, the Company employed more than 500 full-time employees and workers spread over all offices and units across India.


The Companys safety management initiatives include designing and implementing health and safety policy and facilitating external and internal safety audits. It also focuses on planning activities to achieve health and safety, and performance monitoring and evaluation for employees. TPL intends to reduce the negative environmental impact of its products and activities, preserve ecological balance, and protect biodiversity surrounding the Companys industrial facilities. Furthermore, the Company strives to meet statutory requirements, as well as the requirements of the licenses, approvals, and other certificates. The Company also aims to ensure the safety of its employees and those working under its supervision.

Appropriate mitigation steps are taken in advance to guarantee that the business is conducted keeping in mind all the possible risks. The Company ensures that every recruit receives sufficient training before participating in any form of the production process. Employees of the Company are insured by the Employees State Insurance Act of 1948, which gives them access to medical care for themselves and their immediate families. The Company also procured group health (floater) insurance coverage for employees who arent covered by ESIS. Through relevant programs and policies, TPL is committed to ensuring sustainability in its operations.


Internal controls are adequate and well-synchronized at the Company. It follows all procedures, laws, rules, and legislation to the letter. Periodic risk assessment, mitigation, and monitoring are carried out to ensure operational efficiency, keeping in mind the type and business complexity of operations. Internal audits are carried out by the Companys independent auditors to ensure appropriate documentation and reporting. If there are any discrepancies, they are immediately reported to Management and the Audit Committee for immediate resolution. The Companys robust IT infrastructure ensures data security and audit processing efficiency. The recording of transactions and accounting requirements are scrupulously followed. The MIS, on the other hand, improves real-time reporting and helps with expense control. To guarantee rigorous compliance, any differences between the actual and budgeted allocation are promptly reported and addressed.


Statements in the Management Discussion and Analysis Report describing the Companys projections, estimates, and expectations may be interpreted as forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply, price conditions in the domestic and international markets in which the Company operates, and changes in Government regulations, tax laws, and other statutes. The Company assumes no responsibility to publicly amend, modify, or revise any forward-looking statements based on any subsequent development, information, or events.