Tarsons Products Limited (NSE: TARSONS) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Sanjive Sehgal — Chairman and Managing Director
Santosh Agarwal — Chief Financial Officer
Analysts:
Aditya — Analyst
Rishabh Shah — Analyst
Ajinkya Jadhav — Analyst
Abish — Analyst
Nikhil — Analyst
Presentation:
operator
Ladies and gentlemen good day and welcome to the Q3 and 9 month FY26 earning conference call of Tarsan Product Limited. As a reminder all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude should you need assistant during the conference call please signal an operator by pressing Star then zero on your touchdown phone. Please note that this conference is being recorded. Before we begin I would like to point out that this conference call may contain forward looking statement about the company which are based on beliefs, opinions and expectation of the company as on date of this call.
These statements do not guarantee the future performance of the company and it may involve risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Santosh Agarwal, Chief Financial Officer at Tarson Product Limited. Thank you and over to you sir.
Sanjive Sehgal — Chairman and Managing Director
Good evening everyone and a very warm welcome to the Q3FY26 earnings conference call of Darsun Products Limited. I’m joined by our CFO Mr. Santosh Agarwal and SGA, our Investor Relations partner. Let me start with the industry overview followed by operational and financial highlights. The plastic labware industry in India is gaining momentum and is expected to grow at a healthy cagr of over the next five to seven years supported by expansion of healthcare diagnostics, biotechnology and pharmaceutical research activities. While the global plastic labware market is significantly larger, India remains largely underpenetrated offering substantial long term growth potential.
The growth outlook is further reinforced by the recent announcement by the Union government which places renewed emphasis on the healthcare pharmaceutical sectors through a 10% increase in the overall budgetary allocation. The budget also highlights a strong focus on biopharma with a 100 billion rupee allocation over five years to develop India’s end to end biologics and biosimilars ecosystem. This initiative spans R and D talent development including the establishment of a new National Institute of Pharmaceutical Education and Research, expansion of clinical trial infrastructure and faster globally aligned regulatory approvals. Measures are expected to accelerate research driven activity across the sector thereby driving incremental demand for high quality laboratory consumables.
Tarsons is well positioned to capitalize on this structural demand tailwind. We have built Tarsons with a long term vision to emerge as the industry leader in the plastic labnet space in India while also deepening our presence in global markets, our strategy focuses on expanding our product portfolio through the addition of new products supported by the commissioning of new capacities at Bachelor in the current quarter. As this CAPEX comes on stream, we. Will be able to introduce an entirely. New set of products thereby expanding our overall addressable market. Backed by our strong brand manufacturing capabilities, robust supply chain and long standing customer relationships, we are confident of gaining market share in both existing and new product categories.
Turning to the current demand scenario and competitive landscape in the domestic market, demand for our products has begun to pick up reflected in increased order inflows for plastic labware products. We have been operating at near full capacity over the past few months in the existing plants and are actively working to expedite the ramp up of new capacities. With capacity expansion, steady demand for existing products and a gradual scale up in volumes for the new product categories, we are optimistic about delivering stronger revenue growth in FY27 and beyond.
On Competition intensity in the domestic market is moderately increasing with several competitors adopting aggressive pricing strategies which has kept pricing under pressure. Historically, however, our growth has been volume. Led rather than price driven. With an established brand, consistent supply and. High quality products, we believe we are. Well positioned to outperform industry growth and competition. Additionally, our scale advantage and reliable supply capabilities strengthen our ability to win business over other players. With respect to the global markets, the larger part of the financial year was marked by heightened uncertainty in international trade due to geopolitical tensions and ongoing trade and tariff related disruptions. However, the recent announcement of the trade agreements between India and the EU and India and the US have provided some relief to Indian manufacturers and exporters. While a degree of uncertainty continues to persist, the overall direction appears to be more constructive as global conditions stabilize.
We believe Tarson’s is well positioned to benefit from its manufacturing cost advantages, process efficiency, shorter lead times and consistent product quality which should translate into stronger momentum in the overseas market even during challenging periods. We maintained a focused approach towards building our export business through active participation in international fairs and exhibitions as well as strengthening engagement with our customers. Addition of new products we will offer a more comprehensive portfolio to serve international customers across multiple geographies. In parallel, we plan to leverage nobe, our overseas subsidiary and well established distributor in the European market to cross sell products and and deepen our presence in these regions.
About the financial performance, our revenues grew 12.8% on a YoY basis for Q3 and our cash profit grew by 38.6% with accelerated charge of depreciation on account of partial commercialization of the Parshila facility and revenues to follow in the coming years, it is prudent to evaluate our performance on cash band basis. Profit after tax for Q3FY26 grew by 21.4% on a year on year basis after adjusting one time expenses on account of the new Labor Code. With this I hand over the call to Mr. Santosh Agarwal, CFO of Tarson’s for a more detailed update on the financial and operational performance. Thank you.
Santosh Agarwal — Chief Financial Officer
Good evening everyone and thank you for joining our Q3 nine month FY26 earning conference call. Let me take you through the financial performance for the Q3.9 month FY26 on a standalone basis, revenue for Q3 FY26 stood at around 84 crore and revenue for 9 month IFY26 stood at rupees 236 crore, a growth of 10.3% and 6.6% respectively. On a YoY basis EBITDA for Q3 FY26 stood at 29.3 crore compared to 27.9 crore in Q3 FY25 for 9 months FY26 EBITDA stood at 77.5 crore registering a growth of 13.3%. YoYo EBITDA margin for Q3 FY26 stood at 34.7% for 9 months FY26 EBITIDA margin stood at 32.9% an increase of 190 basis point YoY adjusted profit after tax after adjusting one time impact on account of change in labor code for Q3 FY26 stood at 8.4 crore compared to 7.6 crore in Q3 April 25 for 9 month April 25 adjusted PAT stood at 18.5 crore.
The decline in profitability is primarily attributable to higher Depreciation expenses of 60.66 crore versus 36.35 crore in the previous nine Previous nine monthly period arising from partial capital license of the Parchla facility. Once the facility will be fully commissioned and revenue contribution commences, PAT margin is expected to return to normalized level. Adjusted Cash pad for Q3FY26 stood at 31.1 crore compared to 23.2 crore in Q3FY25 a growth of 33.9% over nine months. FY26 adjusted cash pad stood at 79.1 crore, a growth of 24.5%. YoY speaking about the consolidated performance console, revenue for the quarter was 108 cr marking a growth of 12.8% compared to Q3FY25.
EBITDA for Q3FY26 was around 31.5 crore with EBITDA margin of 29.2% and for nine months EBITA stood at 83.7 crores a growth of 13.5% y. EBITDA margin for nine month FY26 stood at 27.7% an increase of 140 basis point yoy adjusted pad form Q3FY26 stood at 6.4 crore a growth of 21.4% yoy adjusted CAF pad or Q3FY26 stood at 31.4 crore a growth of 38.6% yoy and for nine months FY26 it stood at 78.9 crore compared to growth of 27.3% yoy. With this I would like to open the floor for Q and A.
Questions and Answers:
operator
Thank you so much sir. Ladies and gentlemen, we’ll begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchton telephone. If you wish to remove yourself from the question queue you may press star and two participants are request to use answers while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Aditya from Securities Investment Management. Please go ahead.
Aditya
Yeah. Hi sir. Thanks for the opportunity. So first question is on Capex. So I believe one half of our Capex which was for existing and the bio process products has been commercialized. So if you could just talk about how is the utilization being for the Statex and what utilization would this facility break even for us?
Sanjive Sehgal
So the bioprocess side which is certain kind of containers and bottles has been commissioned and we have been able to start selling these products in India as. Well as international markets. We have a very very large capacity on these product lines and a majority of the capacity still remains unutilized. I believe that at full capacity most of these bioprocess containers what we’ve set up in our new facility could generate. Revenues of in excess of 150 crores.
Aditya
Understood sir. At what utilization would this facility start break even for us?
Sanjive Sehgal
Sorry, could you repeat the question please?
Aditya
At what utilization would we break even for this capacity?
Sanjive Sehgal
I think we would be able to break even very very easily Even at much lower capacities because once we come over our fixed cost at this point of time we have multiple people which we have hired for this facility both in terms of the workforce as well as certain managerial personnel. But I think once the entire Pashna facility is being somewhere close to 8 to 9 million dollars overall as a facility not only in bioprocess containers, so about 70, 75 crores in revenue, we should be in cash positive, EBITDA positive numbers.
Aditya
Understood sir. And sir, with cell culture capex coming in Q4, so how should one see the utilization this capex? So, so would the first few months go for sampling and after three to six months scale up should start happening over there or we are done with the sampling part?
Sanjive Sehgal
No, we are not done because the product line cannot be sampled with, you know, it has to be sampled with real products. We cannot just send you know, some sort of brochures or you know they need to have the real product with the real treatment to be able to grow their cells and check whether the cell culture vessels, what we produced is ideal for the use. So the sampling part is very, very quick which should not take more than a few weeks all over India. But being able to enter into large companies SOPs and being able to become one of their preferred vendors or even one of the secondary vendors because they would have long standing relationships with existing brands for many, many years, that would be the time consuming process.
Aditya
Understood sir. And also with this new capex, so. Our current revenue mix for a standalone business, 65% domestic, 35% export. Now after the utilization of this capex would you see the major growth would be driven by the export market. And should the share of export markets keep increasing for us?
Sanjive Sehgal
Initially yes, but see at this point of time we are building plastics for the biopharmaceutical sector, right? Which is biopharmaceutical containers. But we would definitely have plans to boost our domestic revenues over the next two to three years by trying to become a more solutions provider to the. Biopharmaceutical industry than just a plastic consumable supplier. And as our company pivots in that direction I feel that with the government’s initiative on the biopharmaceutical sector and biopharmaceutical sector going very, very in India with a lot of focus on that and a lot of focus of the biopharmaceutical companies to source make in India products and buy local, I think it’s a great opportunity for companies like us to be able to take advantage of that and build revenues in India through this sector.
Aditya
And now sir, you know we had made the announcement, you know, of this 600 crore CapEx in 2022 we are commercializing the same, commissioning the same in 26 now. So it has taken some time to commercialize the StateX. But do you think the triggers or the conditions which made us decide to go for such capex, are they still present or you think there are certain challenges now or the conditions are a little different now either in the domestic or export markets which would make the utilization of this capex a little harder than we expected, than we had estimated previously?
Sanjive Sehgal
Definitely. I think the markets got more competitive post the COVID era. So various product lines in which we would expanded capacities, sweating those capacities will take us longer than what we had projected. But if at all, relatively we are in the best position as compared to anybody in the industry, specifically in India. And our business development activities are quite strong and being able to figure out ways and how we can sweat capacities for capacity expansion related products. What we’ve done capex on, but products like cell culture and bio processor products we never had. And these products, when we start off as a player without any market share in the large Indian market and much, much larger international market, I do not see a lot of challenge in being able to gain, you know, and become the kind of capacities you’re building. Even if we sell to capacity would still be a fringe player, you know, in the international, you know, arena for. Cell culture or bioprocess consumers.
Aditya
And on this competition part. So you mentioned that there has been increased capacities. So this increased capacities have been from. Just the existing players or some new players have also come in which is affecting the pricing?
Sanjive Sehgal
No, it’s more or less existing players. Actually what’s happened is Covid presented an inflated artificial demand period for about 24 to 30 months and that led to a lot of companies building and spending a lot of capex on expanded capacities. We did that as well. But 70% of our CapEx was used to build newer products or in land and building and only about 25, 30% of our CapEx was built in expanding capacities. So I think there was a lot of expanded capacity and then people have large fixed cost burden and when that happens, people start going to new lows in pricing to be able to sweat their capacity.
So that’s basically what’s happening.
Aditya
Understood, sir. And sir, now with us FTA also done, almost done. And eu, India, FDA also happening. So just wanted to understand these expanded capacities. Would you say there are higher chances of these capacities getting utilized faster? Just some sense if you could provide because I believe some of the domestic players are pretty had a good amount of exports. So if you just help us understand how would this FTA affect the domestic competition.
Sanjive Sehgal
So see, the FTA will not affect. The domestic competition in any way. But I think the FTA will benefit us in our international business. The India UFTA is, you know, is always welcome because it makes our products more competitive. But the degree and the Delta is small, paying 6%. Our importers were buying from us in Europe were being 6% taxes which will come down to zero at a time when the FDA would be executed. But the US is if executed perfectly. And if the executive order is signed, it could be a big benefit because 50% coming down to 18% gives us a new lease of life and would definitely help expand our business in America. So I believe the India US FTA is a big one, but the India EU FTA for us is also, you know, an added advantage from 6% to going to no duties.
Aditya
On the EU FTA. So I believe a presence in EU was limited if I exclude the NARBE business. So if you have to understand now going forward, how are you seeing the EU business for us? So would you keep on expanding the Norway business only or you would try to do more white labeling over there with the EU FDA happening?
Sanjive Sehgal
We will go with both kinds of business. See, the advantage of the American business is that there are very few strong family run businesses in the us. It’s large multinationals and that always presents an opportunity for high quality, good quality, well priced products to make its way through. In EU you have four to five very strong family owned businesses, large family owned businesses in the eu. And I always believe that the European Union is more local, focused product and. That was the reason for the acquisition as well. Where they believe in their local products more than imported products. And in the US it’s more like a global economy where they accept products. You know, the acceptance is much stronger. From all over the world.
Aditya
Understood, sir. If I see Norbi this quarter we have. Am I audible?
Sanjive Sehgal
Yes, you are.
Aditya
Yeah. So for Nordi, we have seen a 22% increase in sales this quarter. So just wanted to understand how much is because of volume growth and how much is due to rupee depreciation?
Sanjive Sehgal
It’s mostly due to the rupee depreciation because the euro has shot up against the rupee. I think Norway overall has been just a marginal growth from last year. It’s a very challenging economy. 2025 calendar year was a very challenging time for the European economy, especially the German economy. And Norway at this point of time is doing well, holding up in Europe and I think addition of newer products from our facilities, especially in cell culture and geographical expansion within EU would be the key factors, you know, to monitor to see Nurbase growth moving forward.
Aditya
But if I could understand the scale up in Norway. So it is, it has been almost. One or two years now since we have acquired Norway. We have been seeing that we are investing in that business, having more sales personnel over there, increasing our brand presence over there. But the scale of the revenue is pretty flattish now. So just wanted to understand how long do you think this kind of flattish growth would continue for Norway? Because I understand the European markets are a little weak but we are a minuscule player if I look at the overall scheme of things. So just wanted to get a sense how long do you think the investments need to take happen in Nairbe and how much time it will take for us to scale up.
Sanjive Sehgal
So since we’ve acquired Norbe, we’ve not. Made any significant investment into Norbe post the acquisition. It’s been status quo since we acquired Norbe. The reason for that being that you know, we’re focusing on executing two of our largest facilities and 600 crores of capex takes precedence over the company which you acquired because as you rightly said, it’s a minuscule size, smaller, small in size. So I think over once we, you know, establish and stabilize the products, what we are building, we will try and look at geographical expansion and what no way does so very well In Germany where 70, 80% of the revenues come out of the 8 and a half million Euro revenue. We try and replicate that model in certain other key geographies in Europe and that’s how the scale up would happen. Along with introduction of new products.
Aditya
Understood. Just last one question from my side. So there has been an increase in other income from 1 crore to 8 crores this quarter. So what is the reason for the same?
Santosh Agarwal
The other income has been increased because of high forex income. There are some forex income has been booked because of the fact that lot of capex are there for which we have given given advance at much lower euro rate. Right. And now those machines has arrived at much higher euro rate, right? So that is the reason why the Forex high forex income has been booked in this quarter.
Aditya
Understood sir, thanks for answering the questions and come back in the case.
operator
Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and 1. Our next question come from the line of Rishabh Shah from Baglay Rock pms. Please go ahead.
Rishabh Shah
Thanks for Opportunity. So the new capacity which we’ve put up that for cell product culture and for biopharma, these products would be commanding a higher margin than our legacy products or be in the same margin category.
Sanjive Sehgal
Material margin wise it would be similar to what we currently work at. We work at about 68 to 70%. Gross margin across product lines with the exception of a few which could be. Lower and the exception of a few. Which would be higher. But EBITDA wise, it would all depend on how we scale up over the next two to three years. So material margin wise, it should be similar.
Rishabh Shah
Okay, the next question is, as we see that in working capital much of our money gets stuck in the inventory. I just wanted to know how we manage our inventory in terms of life cycle of products. Since we have 2000 plus SKUs.
Santosh Agarwal
We have currently we have on sales, we have a working capital cycle age of 125 days. Right. Of last nine months. And it includes raw materials of 41 crore. It includes WIP of 5 crore. It includes finished goods of 39 crore. It includes stock and trade of 7 crore, it includes packing material of 13 crore. So when we are, you know, running the venture of, you know, more than 2500 SKU, then we have to keep the inventory in hand in all these kind of segments. Raw material, working progress, finished goods, stock and trade, traded goods, packing material and consumables. Right. And on the top of that we are also launching the new products. So to send the samples to the customer for the validation, we have to keep minimum batch inventory also. Right. We believe that this inventory inventory can be optimized once the company will, you know, scale up its, scale up its revenue going forward.
Rishabh Shah
Okay. During IPO time and years after that, we have always in our commentary have mentioned that we need to focus more on the exports since we have seen significant growth in the export market. So I just wanted to know what would be our strategy to fight against the global peers since they have a deeper pocket and Greater number of SKUs and tartans. What could be your strategy to fight against the global players?
Sanjive Sehgal
That has been seen the global players. Through acquisition have always larger product portfolios and larger product baskets than smaller players like us. But we are focused on, on the product lines, what we produce. And most customers and most distributors are willing to work with focused companies which are not all over the place and you know, focus on certain product lines and do a few things and do that really very well, you know. And that’s what Tarson is all about. We never pivoted out of plastic labware, understood plastic lab and the industry very, very well and did that to the best of our ability.
And in terms of quality, we have one of the best names globally. We are very well respected player globally. I think internationally, more than fighting the global players, I think the international uncertainty and the geopolitics is something which is out of our control. But if that pans out, well, I think it’s a very, very bright future for Tarsons in US, Europe and some of the other developed economies.
Rishabh Shah
I was coming to my next question, like, how do we engage the customers? Like, like how long does it take for customer to get on board with Target? And also why does it, why would a customer stick with fashions? Is it just pure the quality of the product or it is something else? Is a relationship?
Sanjive Sehgal
It’s the relationship as well. It’s the number of years we work together and the reliability we provided to the customer. And, you know, you don’t engage customers. And get business sometimes immediately, you know. So there’s no timeline or defined protocol that, you know, if I approach a customer or if I meet a potential customer in an exhibition in three weeks or four weeks or two months, you know, it will be converted into business. You know, sometimes you make some connections and when the opportunity arises, you know, that sometimes is an inflection point and. It suddenly turns into business. So our focus always is to grow our wallet share with existing customers because that’s immediate whenever the opportunity comes. And then keep soliciting new customers as we meet them in, you know, conferences. And exhibitions, as well as through our marketing strategies. And as and when the time is right, we keep building up and growing our base.
Rishabh Shah
And also when we go for a customer and he’s like, already using products of, let’s say, the global player, like Corning or Thermo Fisher. Any reasons that he would, he would switch to Tarzan’s. Is it like, what. Because in terms of quality, these global players would be as good as, say, as us. So what would be those things that would make a customer switch to Tarson’s product?
Sanjive Sehgal
No, see, you always have to identify a gap in the portfolio. You know, they have, there has to be, you know, you have to build a relationship with a customer and identify. A pain point and then work on. That pain point and then move your way up with the customer.
Rishabh Shah
Okay. For me. Okay. Okay. And sir, what are the customers? Top three key purchasing criteria. Can you rank the criteria in the order of importance?
Sanjive Sehgal
No, I think it’s too much of, you know, sensitive marketing Information and business development information. So we won’t be able to discuss what makes the customer buy our product and why, you know, why he chooses our product.
Rishabh Shah
Okay, fine, I can, I’ll get back in the queue.
operator
Thank you sir. Next question come from the line of Aink Jada from Chris Portfolio pms. Please go ahead.
Ajinkya Jadhav
Yeah, thanks for the opportunity. My first question is regarding that you mentioned that competition in the domestic market has been due to the aggressive pricing from our peers. So like wanted to understand what initiatives we are taking to tackle this competition and how much time it will take to, you can say for the market to this excess capacity that has been there in the industry post Covid.
Sanjive Sehgal
The second question I do not still. Have an answer because prices are at an all time low because of capacity, right? There are sufficient players with sufficient capacities and hence at this point of time it’s a buyer’s market by far and nowhere close to being a seller’s market. So, you know, it’s not, you know, so I would not know when, you know, that capacity would play out and you know, when the market would grow significantly big enough where there wouldn’t be enough capacities. Because whenever the next turn comes, I think people will be more wise then including ourselves, you know, to what we all did in Covid in 2021, 22.
And regarding your first question on the, you know, price, you know, competitiveness and how do we tackle it? I think by innovating and innovating our processes and systems and getting more leans, getting better, trying to be able to take out margin from our operations and. From our manufacturing rather than to trying. From the customer and being able to innovate and be able to add more value added products because there’s always a cycle, right? What we sold at very high margins in the 2000s, maybe 20 years back today is highly commoditized and the company has survived because the company has launched better value added products. So our R and D teams and our product development teams continuously building more and more products so that we can add more, better margin products so that we can balance out products which are getting highly commoditized.
Ajinkya Jadhav
And regarding the new products that will be produced from our new facilities. So how much time it will take for us to get qualified with the big companies or MNC that you mentioned, it will take a lot of time. So if you can roughly quantify how much time it will take,
Sanjive Sehgal
it depends. On, you know, the sensitivity of various companies and the projects in which they’re using. We would start selling immediately once we. Launch the products within the first month. And then the scale up will happen over two to three years where we expand to where we expect to reach close to optimal levels of capacity. So I would believe, you know, from 0 to 100 we would get to the installed capacity maybe in three to. Within three to four years, you know. At even levels, you know, maybe 15. 20% capacity going in the first year. 30, 35% by year two and so. On.
Ajinkya Jadhav
In the domestic market due to this budgetary support, can we say that we will see steeper growth in domestic government based institutes, medical institutes due to this budget report? Like how we are evaluating this?
Sanjive Sehgal
See the thing in the problem with. The domestic business in India is that now it is controlled by gem, which is called a government E marketplace. And unfortunately this is not the most organized way of purchase, you know, because vendors and suppliers, you know, with products which do not fit the needs of the customers are forced, you know, customers are forced to buy from them because of the systems and because of the L1 process. So I think the government business has taken, you know, has taken a big setback over the last three to four years since Gen is getting more and more stronger each and every year.
So unless the system of procuring for the government does not change or they do not add more transparency so that it’s customization to what the buyer needs or what the researcher and the research institute needs, I don’t see the standard laboratory consumable business growing or becoming a significant business for any of the top players in the country in the laboratory business.
Ajinkya Jadhav
Got it? Got it. And the last question from my end is both this India USD and US tariff reduction. So can we say that international markets will be the growth driver for us than the domestic given the benefit due to this tariff reduction or like how you are strategizing.
Sanjive Sehgal
For now? Yes, because you know, we are building products where India is still a nascent user of those products and the world is more mature user of those products. And India accounts for 2 and a half, 3% of the world market and the rest of the world accounts for 97% of the market. And we’ve been in the international market. Now we are old enough player. We’ve been in the market for 17 to 18 years outside India. So the statistics say that it’s natural for us to grow much faster internationally than grow in India. But we’ll see how the external political environment all over the world plays up and what sort of stability the world continues to have over the next three to four years. I think that would be A very important factor, more external than internal, whether we have to watch out.
Ajinkya Jadhav
So this investment like equity incision in the Singapore subsidiary, is that the step taken that direction to increase our sales in Southeast Asian. Southeast Asian markets, particularly along with the US and Europe?
Santosh Agarwal
Not, not really. This investment of equity in Singapore is not related to any kind of expansion. This investment of equity is basically related to the loan which we have taken in Singapore entity for the acquisition of German entity. We need to serve the serve the EMI obligations and the loan obligation from India. That is the reason we are giving this kind of equity infusion in Singapore rather than doing the multiple round of loan.
Ajinkya Jadhav
Got it, Got it. Got. Yeah, Understood. Thanks. Thanks for answering your question. All the best.
operator
Thank you so much. Ladies and gentlemen, anyone who wishes to ask a question, we press star and 1. Our next question come from the line of abish from Michael. Please go ahead.
Abish
Hi, good evening. Thanks for taking my question. I have a couple of industry level questions. As we see more and more diagnostic labs getting into automation and you know, the, let’s say the manual intervention becoming less and less, what kind of products do you think incrementally are losing relevance? The products that may or may not. Be in your portfolio?
Sanjive Sehgal
I think liquid transfer vessels are what we make which are manual liquid transfer vessels like Piper tips. And as labs are getting more and. More automated. There are, you know, there are automation systems and there are automation compatible Piper tips. We do not produce the same today because India again is a very nascent market. The capex for such product lines is large and it’s not prudent at this time for a company like us to invest 10 or 15 million dollars on a product line which is just about gaining certain momentum in areas where we never sold product in the past. And the global market is very, very. Large for certain products like this. But it’s heavily OEM dominated. Right. So the large machine manufacturers sign agreements where they must buy the consumable from the equipment manufacturer as well. So it’s not an area where we are focusing on at this point of time because you don’t see much growth or much momentum for us as a company. But having said that, if there is any offset of the manual consumables what we produce, there is enough growth from newer areas to offset that loss.
Abish
And these newer areas will be the cell culture. I mean the new plant that you’re putting in.
Sanjive Sehgal
I mean like for like there’s enough newer areas for the manual consumables to find its way into customer hands to offset any loss. If at all.
Abish
All right. Is Pipits or Pipcips a large part of your existing revenue?
Sanjive Sehgal
Pipits is something which we are developing and growing in. And Pipit tips is also an important part of our revenue, I would say, in that way.
Abish
Okay. Okay. My second question is on, I mean, the new business that you are targeting, the cell culture business. I just wanted to understand this better. The scientists or the QC guys who are doing cell cultures in the labs, are they prone to be stickier to the labware that they are using just because the value of the test is higher and they don’t want obviously anything to go wrong with it? So is the stickiness to the existing labware higher in this business as compared to, let’s say, the business that you’re currently. Is that a fair thing to say?
Sanjive Sehgal
Much higher. Much, much higher. But the advantage, what we have over other companies which try and get into cell cultures, we’ve spent 30 years selling them basic products compared to cell culture. You can call the products what we make, basic or standardized or commoditized products and build a level of trust around these, around this user base. So the user base which uses cell culture, it’s not only cell culture what they use. They still need standardized products, products, what they buy from us. So that 30 years or 40 years of brand building, relationship, comfort and trust on Tarson’s gives us an edge when we launch cell culture because we moved organically step by step. Right. So, yeah, you find a lot of companies which have eliminated, you know, the base level and come straight into cell culture. So you have no history. Right. With the user. So that becomes a challenge.
Abish
Yeah. So as I understand, it’s basically cross selling to the same customers who you already have a relationship with.
Sanjive Sehgal
You already have a relationship with. But having said that, the customer is still very, very sticky, you know, specifically in research organizations funded by the government because it’s not private and there is no balance sheet or PNL responsibility. Right? There is, but not as much as a private company.
Abish
Yeah. When you talk to these customers, I mean, do they give you some comfort that they would switch whenever your plant gets operational or they would say that? Okay, first, I mean, we’ll see when it happens.
Santosh Agarwal
The time when it comes. To make an indent, that’s when the real. When it’s real. Right. Because to be honest, you know, people can say a lot and give you a lot of comforting statements when they don’t have to make a decision, but. When the time comes to make a. Decision, I think that’s, you know, when it’s real. So there are a lot of factors, you know, it’s of course the user. And the user’s comfort. The user’s preference is a primary factor. But apart from that, the organization’s relationship with the vendor, with the supplier, which could have spread over a few decades because India has never had a cell culture producer. Right. It’s always been an international company that plays into their advantage. But having said that, competitive landscapes, cutting budgets on research all over the world, including India, as well as the depreciating. Rupee playing to our advantage.
Abish
Understood, Very clear. Thank you so much.
operator
Thank you. The next question comes from the line of Nikhil from Simple. Please go ahead.
Nikhil
Yeah, good evening, thanks for the opportunity. Just continuing with the previous participants question, see if we look at on the cell culture side, some of the global players like in Europe, Grinder and all, even they have put sterilization capacities in last one or two years. So if you have to understand the market, does it become very important for you to have a complete control from like with the sterilization and the product quality for someone to make a like dent in the market or even in like in other products where we have seen even unorganized have come and try to compete on price, Is that, is it possible or is it like you need to have a sterilization facility to actually be considered by the customer?
Sanjive Sehgal
Absolutely not. You, you need a validated sterilization plant which is sterilizing the product as per the norms and having complete information and complete certification. So if it’s a validated certified plant, that’s all that is needed. Who owns that plant? Whether it’s a third party party contracted sterilizer or a company owned sterilizer, it doesn’t really matter. The reason we built a sterilization plant is because in the eastern part of India from where we operate there is only one sterilization plant. And we felt that that is a very large risk moving forward as most of our products are going to be sterilized and hence we wanted to reduce that risk and be self reliant rather than getting stuck up to putting in 500, 600 crores of capex to by not having enough sterilization or not having enough certified sterilization.
And on Griner’s answer, Griner expanded into more sterilization plants and they’ve been having sterilization plants for the last decades, you know, maybe 15, 20 years. Griner is into the business of sterilization as well. So it’s a Griner group of companies and Sterilization is one of those businesses. So they have multiple sterilization plants which customers in Europe can use as a contract. Sterilization, sterilization. So they make a lot of money out of sterilization. Sterilization is not only captive consumption for them.
Nikhil
Okay, so for us, if we, for us if we have to understand on the semiconductor side, And you also talked about currency depreciation and there are no other plants.
Sanjive Sehgal
Cannot hear you.
Nikhil
Hello, Am I audible now?
Sanjive Sehgal
Now you’re audible. Yeah, yeah.
Nikhil
So what I’m trying to understand is that in cell culture, as you said, we are one of the only players who has put in a capacity and most of the others are like importing with the currency depreciation. How, what kind of a price differential today we would be having versus say one year back. And this would also be true for the non cell culture or the diagnostic product. So if you can just give sense of how this currency depreciation would have made us more competitive versus our MNC players who are importing.
Sanjive Sehgal
I don’t have a table to have a price difference between what the MNC offers and what we offer at. But you know, the currency, you know the dollar which was two years back at hovering around 18 hours at 90. So it’s like a 12, 12 and. A half percent depreciation from 80 to 90.
Nikhil
Okay, but parallel on the unorganized or the smaller player though they have put in capacity. What we also see is that most of the resin and the quality of product which we are trying to provide, we have to import those. Considering that they already have smaller volumes. If they have to provide a similar quality and compete with us on price, will they be able to sustain the business or are they cutting on quality and trying to compete?
Sanjive Sehgal
See, people are sustaining on business because I believe that our balance sheet is very, very robust. And you know, you have, I think. If you look at balance sheets of. Other local producers in India who produce or who have own a manufacturing business. Or who own a trading business, Trading. Business is not a fair comparison because they trade, they don’t produce. But if you look at manufacturing, the. Balance sheet looks very, very different to. What our balance sheet looks. So different companies can exist in the same industry having different kind of numbers and different kinds of margin expectation and different kinds of cash what they’re generating. But there is, you know, there’s a place for everybody.
Nikhil
I understand there is place for everybody. But see in last three years when we have seen such kind of a consolidation in our P and L from where we were in 22, 23 to today. And we have, and even post that our margins have gone down, some say from the peak of 42 today, around 30, 31. How would the other players be like playing? Are they playing at like 10, 15% kind of margins?
Sanjive Sehgal
There could be people playing it below. There could be people playing at above as well. But just how we have survived over the last three years, coming from the peak to where you said we are, just that’s how other people have survived. You know, it’s just combination of expectation, right? So somebody could run a business at 6% EBITDA, 7% EBITDA and still be okay with it, you know, and, you know, still, you know, hope to stabilize his operations and you know, be able to grow, grow his business from there. But there is definitely room for all these players in India and there is scope for all these players in India because there are all kinds of customers with all kinds of price points.
And I’m not saying that everybody produces the quality what we produce, but some companies in certain product lines also produce very high quality products and do a good job.
Nikhil
Okay, last question. See, maybe those players who are like manufacturing low quality and making like 6, 10% margin is not the market where we would like to operate.
Sanjive Sehgal
But I think that question. No, no, no. I don’t believe that anybody makes low quality. You know, there are certain different segments in the market and different companies produce. Products according to different segments. So low and high is just a relative term. Right. Maybe the MNC players would consider that we make low quality because we are lower in price, but we believe we make high quality. Right. So it’s just segmented.
Nikhil
Okay. Okay, sure. Thanks. Yeah, I’m done.
Sanjive Sehgal
Okay, thank you.
operator
Thank you. Ladies and gentlemen, as a no further question from the management, I’d like to hand the conference over to the. As there are no question from the participant, I would like to hand the conference over to the management for the closing comments. Thank you. And over to you team.
Sanjive Sehgal
Thank you everybody for joining us today. I hope we have addressed all your questions. We remain committed to keeping the investment community informed with regular updates on our developments. For any further information or queries regarding Tarson’s, please feel free to reach out to us or sga, our investor relations partner. Once again, thank you for your time and your support.
operator
Thank you so much. Ladies and gentlemen, on behalf of Tarsin, that concludes this conference, thank you for joining us and you may now disconnect your lines.