This newly-listed stock fell 10% after first-quarter results. Should you buy?

Shares in Tarsons Products are down more than 10% in the morning session following the announcement of 1Q23 results. Tarsons Products stock price opened today with a wide gap to the downside and hit an intraday low 684.25 on NSE, registering a fall of around 11 percent within minutes of opening bell.

According to stock market experts, Tarsons Products Ltd has reported weak quarterly numbers and the market hovering around its resistance levels is in no mood to hold any stock that has a chance of selling them. This value has fallen due to the ‘oversold’ sentiment in the market as Nifty is still unable to fit its resistance around 17,500 levels. As earnings season draws to a close, there won’t be much domestic trigger left in the market, and so Tarsons Products shareholders are selling the stock. They said that the stock is trading at 4 times its valuations and that is also a reason for the trigger to sell the stock. However, they said long-term positional investors can buy the stock until it dips 910 target per share.

Talking about the reason for the drop in Tarsons Products share price in morning deals, Avinash Gorakshkar, head of research at Profitmart Securities, said, “The company has reported weak numbers and was trading at high valuations. As the market has recovered for a long time but is still unable to break the resistance located at 17,500 levels, Tarsons Products shareholders are exiting their long holdings and thus the stock is falling”.

Urging positional investors to pick the stock at lower levels, Anuj Gupta, Vice President, Research, IIFL Securities said, “Technically, Tarsons Products stock is on the upside. Immediate support for the stock is place a 700 while its strong support lies at 635. It is necessary to continue to accumulate big falls like today and wait for the long-term goal 830 i 910 levels”.

In Q1FTY23, the company’s net profit and EBITDA took a hit in the recently ended June quarter and probably did not go down well with market investors. The company reported a decline in EBIDTA from 36.8 million in the first quarter of 2022 to 31.1 million in the first quarter of 2023. Its revenue also fell from 69.2 million in the first quarter of 2022 to 68, 6 million in the first quarter of 2023. Its net profit also fell 24.8 million in the first quarter of the 22 a 20.3 million in Q1 FY23. However, the company’s domestic revenue for Q1 FY23 declined by 6 percent. Its export earnings showed strong resilience and grew by 14 percent in 1Q23.

Tarsons Products shares were launched in the primary market in November 2021 and listed on the BSE and NSE at a marginal premium of close to 5%.

Disclaimer: The above opinions and recommendations are those of individual analysts or brokerage firms, and not of Mint.

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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!