Tarsons Products Limited Q3 FY26 Earnings Call Summary

Summary

Tarsons Products Limited - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026 4:00 PM

Event Participants

Executives 2 Aryan Sehgal (Promoter & Whole Time Director), Santosh Agarwal (CFO & Company Secretary)

Analysts 4 Aditya (Securities Investment Management), Ajinkya Jhadav (KRIIS Portfolio PMS), Nikhil (SIMPL), Rushabh Shah (Buglerock PMS)

Financials & KPIs

Geographic & Segment Commentary

• Domestic Market: Demand is gaining momentum supported by a 10% increase in the Union Budget for Healthcare. The company is operating existing plants at near full capacity, though pricing remains under pressure due to aggressive competition from existing players with excess post-COVID capacity.
• International Markets: Exports grew despite geopolitical uncertainty, aided by new trade agreements between India-EU and India-U.S. The company is leveraging its German subsidiary, Nerbe, to cross-sell products in Europe, though the German economy remains a “challenging” environment with flattish volume growth.
• Bioprocess & Cell Culture: This new segment reported initial sales of bioprocess containers and bottles. Management expects this segment to generate ₹150+ crores in revenue at full capacity, focusing on becoming a “solutions provider” to the biopharma sector.

Company-Specific & Strategic Commentary

• Panchla Facility Commissioning: The landmark ₹600 crore capex is nearing completion with bioprocess lines commissioned and cell culture coming in Q4 FY26. Total revenue potential from this facility is estimated at ₹70-75 crores to reach EBITDA breakeven.
• Product Innovation: Tarsons is pivoting from “basic” labware to high-value cell culture and bioprocess consumables to counter the commoditization of older product lines. 70% of recent capex was allocated to these new categories.
• Self-Reliant Sterilization: The company established its own captive sterilization plant at Panchla to mitigate the risk of relying on the only other third-party facility in Eastern India.
• U.S. Market Strategy: Management views the U.S. as a more “open” market for high-quality Indian products compared to the more local-focused European market, anticipating a significant boost if the U.S. executive order on tariffs is signed.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Domestic Competition & Pricing

• Question: What is driving the aggressive pricing in the domestic market? (Ajinkya Jhadav)
• Answer: Excessive capacity expansion by existing players during the COVID era has led to a “buyer’s market” where competitors are dropping prices to cover fixed costs. Tarsons is countering this by increasing operational efficiency and moving into higher-margin, value-added products. (Aryan Sehgal)

Cell Culture Ramp-up

• Question: How long will it take for customers to qualify your new cell culture products? (Aditya)
• Answer: Sampling is quick (a few weeks), but becoming a preferred vendor in large company SOPs is time-consuming. We expect a gradual ramp-up from 15-20% utilization in the first year to 100% over 3-4 years. (Aryan Sehgal)

Trade Agreements (FTAs)

• Question: How material are the India-EU and India-U.S. trade agreements? (Aditya)
• Answer: The EU FTA reduces duties from 6% to 0%, which is beneficial but incremental. However, the potential U.S. executive order could reduce tariffs from 50% to 18%, which would be a “big benefit” and provide a new lease of life for American exports. (Aryan Sehgal)

Financial Impact of Panchla

• Question: Why has PAT declined despite revenue growth? (Santosh Agarwal)
• Answer: Profitability is temporarily depressed by higher depreciation (₹60.6 cr vs ₹36.4 cr YoY) due to partial capitalization of the new facility. Management suggests monitoring “Adjusted Cash PAT,” which grew 38.6% YoY. (Santosh Agarwal)

Key Takeaway

Tarsons Products delivered a resilient Q3 FY26 with consolidated revenue growing 12.8% to ₹108 crores, though reported PAT remains pressured by the ₹60.6 crore depreciation charge from the newly capitalized Panchla facility. The company has strategically shifted 70% of its ₹600 crore capex toward high-value cell culture and bioprocess products, moving away from commoditized segments. While domestic pricing remains competitive due to industry-wide excess capacity, Tarsons is leveraging its 30-year brand trust to cross-sell new biological labware to existing customers. Management expects a 3-4 year ramp-up period for the new capacities to reach optimal utilization. With the bioprocess segment alone holding a ₹150+ crore revenue potential and tailwinds from India-U.S. trade discussions, Tarsons is positioned for significant revenue acceleration in FY27 as it pivots toward becoming a comprehensive biopharma solutions provider.