This newly listed IPO stock down 10% after Q1 results. Should you buy?

After the announcement of Q1FY23 results, Tarsons Products shares are down by over 10 per cent in the early morning session. Tarsons Products share price today opened with huge downside gap and went on to hit intraday low of 684.25 on NSE, logging around 11 per cent dip within few minutes of opening bell.

According to stock market experts, Tarsons Products Ltd has reported weak quarterly numbers and the market oscillating around its resistance levels is not in a mood to hold any share that has a chance of any sell-off. This stock has fallen due to the ‘sell on rise’ sentiment of the market as Nifty is still not able to beach its resistance around 17,500 levels. As results season is about to complete, there won’t be much domestic trigger left in the market and hence shareholders of Tarsons Products are selling the stock. They said that the stock is trading at 4 times of its valuations and this is also a reason for the sell-off trigger in the stock. However, they said that long-term positional investors can buy the stock at dips for up to 910 per share target.

Speaking on the reason for Tarsons Products share price fall 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 market has been rallying for long but it is still not able to breach resistance placed at 17,500 levels, shareholders of Tarsons Products are exiting their long holdings and hence the stock is falling.”

Asking positional investors to pick the stock at lower levels, Anuj Gupta, Vice President — Research at IIFL Securities said, “Technically, Tarsons Products shares are in sideways to upside. Immediate support for the stock is placed at 700 whereas its strong support is placed at 635. One should keep on accumulating on big dips like today and wait for the long term target of 830 Andes 910 levels.”

In Q1FTY23, the company’s net profit and EBITDA got hit in the recently ended June quarter and this has probably not gone down well among the market investors. The company reported a dip in EBIDTA from 36.8 crore in Q1FY22 to 31.1 crore in Q1FY23. Its revenue too dipped from 69.2 crore in Q1FY22 to 68.6 crore in Q1FY23. Its net profit also dipped from 24.8 crore in Q1FY22 it 20.3 crore in Q1FY23. However, the company’s domestic revenues for Q1FY23 de-grew by 6 per cent. Its exports revenue showed strong resilience and grew by 14 per cent for Q1FY23.

Tarsons Products shares were launched in the primary market in November 2021 and it was listed on BSE and NSE with a marginal premium of nearly 5 per cent.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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