Tarsons Products Limited

Healthcare — Medical Instruments & Supplies · NSE

₹331.95+₹5.10 (+1.56%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Tarsons Products Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Tarsons Products Limited manufactures and trades in scientific plastic labware products in India and internationally.

IndustryMedical Instruments & Supplies

SectorHealthcare

Employees1,108

Annual revenue₹421 Cr

How does it make money?

Turns over ₹421 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹34 left at the operating level before interest, tax and depreciation. Each of its 1,108 employees supports ₹38.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin34.0%

Net margin3.4%

Revenue / employee₹38.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, CIPLA LTD, DR. REDDY S LABORATORIES, APOLLO HOSPITALS ENTER. L. These are the companies its valuation and returns are measured against elsewhere in this report.

SUN PHARMACEUTICAL IND LP/E 34.9x · ROE 14.5%

CIPLA LTDP/E 31.8x · ROE 9.8%

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

APOLLO HOSPITALS ENTER. LP/E 54.3x · ROE 22.0%

What is its competitive advantage?Little sign of one

Returns on capital of 4.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE4.8%

ROE2.3%

Peer median ROE14.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +49% while net margin moved -88% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+49%

Margin effect-88%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 2.3% is weak
✗ ROE has fallen by 11.9 points over the period

Quality vs. Valuation

Company Quality

39/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

34/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

158.8x

3Y Median

41.7x

40 monthly readings · mean 49.1x · range 25.9x–123.4x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 281% above its 3y median of 41.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 376% above the peer median of 33.3x.

vs. its own history

Expensive

41.7x median over 40 months · +281%

vs. sector peers

Expensive

33.3x median of 4 peers · +376%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

158.8x

P/B

2.77x

EV/EBITDA

14.9x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 50.2% to 34.0% over 3 years.
Debt is rising
Total debt is up 255% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 14.2% to 2.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.1% to 4.8% — often a sign of competition or overexpansion.
Valuation above its historical average
At 158.8x the stock trades 281% above its own median of 41.7x.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 255% over 3 years, from ₹111 Cr to ₹393 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 2.0x — little room if earnings dip.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 16.2 points, from 50.2% to 34.0%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.3x to 2.0x.
🟡Profit is decliningFinancial
Net profit is down 82% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 50.2% to 34.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 281% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 14.2% to 2.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 14.3% CAGR
Latest reported year was 20.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 32%✓ 34.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 4 neutral · 5 weak

Market Cap

₹1,766 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

158.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.77x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.09

Profitable

Profitable on a per-share basis

ROE

2.3%

Weak

Weak capital efficiency

ROCE

4.8%

Weak

Low return on total capital employed

Debt/Equity

0.62x

Moderate

Moderate leverage

Revenue Growth (YoY)

20.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-51.9%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹7 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹331.95

P/E (Forward)

25.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

-0.9%

Weak

Thin margins leave little room for error

Net Margin

2.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.01

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

80%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

331.1 / 329.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

49.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹281 Cr	₹295 Cr	₹391 Cr	₹421 Cr	+14.3%
EBITDA	₹141 Cr	₹111 Cr	₹126 Cr	₹143 Cr	+0.4%
EBITDA Margin	50.2%	37.7%	32.3%	34.0%	—
PAT (Net Profit)	₹81 Cr	₹43 Cr	₹30 Cr	₹14 Cr	-43.8%
EPS	₹15.17	₹8.01	₹5.6	₹2.69	-43.8%
ROE	14.2%	7.0%	4.7%	2.3%	—
ROCE	17.1%	9.3%	7.1%	4.8%	—
Total Debt	₹111 Cr	₹269 Cr	₹339 Cr	₹393 Cr	+52.5%
Free Cash Flow	-₹114 Cr	-₹82 Cr	-₹37 Cr	-₹7 Cr	—

🟢 Revenue has grown at 14.3% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (0.4% a year).

🔴 EBITDA Margin has fallen from 50.2% to 34.0% over 3 years (-16.2 pts).

🔴 PAT (Net Profit) has shrunk at 43.8% a year over 3 years.

🔴 EPS has shrunk at 43.8% a year over 3 years.

🔴 ROE has fallen from 14.2% to 2.3% over 3 years (-11.9 pts).

🔴 ROCE has fallen from 17.1% to 4.8% over 3 years (-12.3 pts).

🔴 Total Debt has grown at 52.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,186 Cr

Total Liabilities

₹551 Cr

Total Debt

₹393 Cr

Cash & Equivalents

₹23 Cr

Operating Cash Flow

₹118 Cr

Capex

-₹126 Cr

Shareholding (proxy)

Institutional Holding

1.6%

Insider Holding

78.1%

Corporate Actions

Ex-Dividend Date

20 Sept 2024

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
CIPLA LTD	31.8x	9.8%
DR. REDDY S LABORATORIES	31.0x	8.8%
APOLLO HOSPITALS ENTER. L	54.3x	22.0%

Recent News

1 mixed1 negative4 general

Tarsons Products vs Nifty 50: 1Y Return +7.52% vs -10.93%

Univest, 12 Oct

Is Tarsons Products (NSE:TARSONS) A Risky Investment?

Simply Wall Street, 07 Feb

Tarsons Product Standalone June 2026 Net Sales at Rs 86.15 crore, up 20.86% Y-o-Y

Moneycontrol.com, 11 Aug

Tarsons Products Q4 Net Profit Slumps 58% to ₹4.2 Cr Amid Revenue Growth

Sahi, 22 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Tarsons Products - Spooked by Iran war? 7 stocks that are predicted to double investor wealth over next 12 months

The Economic Times, 12 Mar

Tarsons Products Q1 Results: Consolidated net loss widens to ₹14.44 million

scanx.trade, 10 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak8.8/20

🔴Financial HealthStretched8.1/20

🔴GrowthWeak7.7/20

🔴ProfitabilityWeak4.6/15

🔴ValuationDemanding4.9/15

🔴RiskHigh4.4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 11% a year14.3% CAGR
✓EBITDA margin holds above 32%34.0%
✗Debt / EBITDA stays below 2x2.7x
✗Free cash flow remains positive-₹7 Cr
✗Interest cover stays above 3x2.0x