Laxmi Dental Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Laxmi Dental reported its highest-ever quarterly revenue of ₹66 crores in Q1 FY26, growing 10% YoY, with healthy EBITDA and PAT margins of 18.2% and 12.7% respectively. The company fully repaid its debt and made a strategic investment in AI dentistry. While scanner sales and aligner solutions showed strong growth, the B2B2C aligner segment faced pricing competition, and new US tariffs pose a potential, albeit manageable, margin impact.

Highlights

  • Recorded highest ever quarterly revenue of ₹66 crores, representing a healthy growth of 10% on a year-on-year basis and 8% on a sequential basis.

  • Maintained a healthy EBITDA margin of 18.2% and PAT margin of 12.7%.

  • Successfully repaid debt in full, aligning with IPO objectives.

  • Made a strategic investment in IDBG AI Dent Global Private Limited to advance digital dentistry and AI-powered solutions.

  • Scanner sales demonstrated strong growth of 26% year-on-year, with over 200 scanners sold in Q1 FY26.

  • Aligner Solutions revenue rose by 18% and contributed 28% of total revenues.

Concerns

  • The B2B2C aligner business faced some competition during the quarter, primarily on pricing.

  • Gross margins on scanner sales are inherently lower (20-30%) compared to the company's own co-dental products (75-80%).

  • New US tariffs of 25% were imposed, though management expects to pass on the majority, anticipating a maximum 0.5-1% impact on margins.

Key financials

  1. Revenue from Operations ₹65.6 Cr +10%YoY
  2. Gross Profit ₹48.1 Cr
  3. Gross Profit Margin 73.3%
  4. EBITDA ₹11.9 Cr
  5. EBITDA Margin 18.2%
  6. PAT ₹8.3 Cr
  7. PAT Margin 13%

What they filed

Q1 FY27: revenue up 13.6%, net profit up 25.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue57 62 61 66 72 +26%66 +6%74 +21%75 +14%
EBITDA9 10 10 12 11 +22%7 −30%14 +40%14 +17%
Net profit6 5 4 8 9 +50%2 −60%10 +150%10 +25%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Dental Laboratory Business
    8% Revenue Growth59% Contribution to Revenue
  • Aligner Solutions
    18% Revenue Growth28% Contribution to Revenue
  • Scanner Sales
    26% Revenue Growth
  • Kids-e-Dental
    ₹4.4 Cr Revenue

Capital allocation

  • Capex ₹68 Cr IPO funds
    • Expansion plan and long-term growth strategies centered around digital dentistry and brand building
    During the quarter, as per our IPO objectives, we repay the debt in full and are focused on expansion plan and long-term growth strategies, which are centered around digital dentistry and brand building. (Page 3) ...So, in our IPO plan, we had said that we are going to be in the range of about Rs. 68 crores for the next 2 years and we still feel that that is more than sufficient for us to expand. (Page 15)
  • Debt Debt disclosed
    • Repayment Debt repaid in full
    During the quarter, as per our IPO objectives, we repay the debt in full (Page 3)
  • M&A IDBG AI Dent Global Private Limited Acquisition · Closed

    Strategic investment to advance AI in dentistry, improve treatment quality, and enhance patient experience, aligning with digital dentistry penetration goals.

    Expected to launch product in current Financial Year and contribute to revenue growth momentum.

    I am delighted to announce that we have recently made a strategic investment in IDBG AI Dent Global Private Limited. Though this company is a startup, we believe that they have done commendable work on the Al side of dentistry. Their solutions include Al-powered dental image, x-ray analysis software and AI-powered. This acquisition is a step ahead towards our primary focus and efforts on increasing the penetration of digital dentistry in the country. (Page 4)
  • Liquidity Liquidity disclosed IPO funds are available for expansion as needed.
    we have raised the capital and we will use the IPO funds as and when we keep needing those for our expansion. (Page 15)

Guidance & targets

Revenue

  • Full-year revenue growth Revenue · FY26 · High confidence 20% to 25%
    our outlook anticipates that the revenue growth momentum will continue on a quarter-on-quarter basis, leading us up to a full-year revenue growth mark of 20% to 25% in FY '26. (Page 4)

    — Sameer Merchant

  • Kids-e-Dental growth Revenue · FY26 · High confidence 20%-25%
    we should be able to do 20%-25% growth in Kids-e as well. (Page 11)

    — Sameer Merchant

Volume

  • Scanner deployment Volume · full year · Medium confidence 1000
    The goal in our mind it should be we should be able to deploy a thousand. That is the current goal in mind. (Page 14)

    — Sameer Merchant

Margin

  • Ad spend as % of sales Margin · this year · High confidence under 5%
    It will still be under 5%. So, we still keep that we always keep it under 5% and even this year, it will still be under 5%. (Page 15)

    — Sameer Merchant

What to watch in Q2 FY26

Sequential Revenue Growth

next quarter
Current 8% QoQ in Q1 FY26
Target 8-10% QoQ

Why it matters

To confirm the company's ability to achieve its full-year 20-25% revenue growth guidance.

our outlook anticipates that the revenue growth momentum will continue on a quarter-on-quarter basis, leading us up to a full-year revenue growth mark of 20% to 25% in FY '26. (Page 4)

Risks & concerns

  • US tariffs on dental products

    medium

    New 25% tariffs imposed by the US, but management expects to pass on majority of the cost, estimating a maximum 0.5-1% impact on margins. Diversification to other geographies is also a mitigation strategy.

    Analyst downplayed

  • Pricing competition in B2B2C aligner business

    medium

    The B2B2C aligner segment faced competition on pricing, leading to flat revenue. Management is prioritizing margins and targeting value-seeking customers and new geographies.

    Management acknowledged

  • Lower gross margins on scanner sales

    low

    Scanners are hardware with lower gross margins (20-30%) compared to own products (75-80%). However, they are strategic enablers for digitalization, improving overall operational efficiency and long-term margins.

    Management acknowledged

Q&A highlights

5 direct
Confidence in 20-25% FY26 growth despite strong Q1 FY25 base Direct
we are confident of doing 20%-25% growth this year, our Q1 has done say 10% from Q4. Usually that is how we will keep growing on sequential basis. And with the investment that we have made post the IPO, we should be able to see the delivery numbers quarter-on-quarter. So, we are very confident that Q2 versus Q3 and Q4, we will have sequential growth of 8%-10%. (Page 4-5)

Analyst questioned the feasibility of high growth guidance given a strong base, and management provided a detailed explanation of sequential growth drivers and IPO investments.

Asked by Shalini Gupta

Impact of 25% US tariffs and mitigation strategy Direct
So, on the previous tariff situation when it was 10%, we were able to pass on the tariff of 10%. So, there was no impact based on that. Now, the current 25% which has just happened... we are confident that we should be able to pass on, I would say majority of it, we may have to take care of some part of it, but at the same time there is an intercompany transfer pricing that we have with our own subsidiary in US. ...bottomline impact should not be more than 0.5%-1%. (Page 10)

Analyst probed a significant external risk, and management provided a clear strategy for passing on costs and estimated the maximum margin impact, along with diversification efforts.

Asked by Hulash Goyal

Flat revenue in Bizdent branded aligner segment despite branding investment Direct
we clearly mentioned that B2B2C faced some competition and this competition was more on the pricing part. Now, as a management, we have clear thoughts in our mind that we will focus on maintaining the margins, the bottomline. And that is why we did not indulge in the price situation currently... we have already taken steps in terms of how to identify the customer who are looking for the value that we give with our aligners, slightly new geographies within India where people have perceived our brand to be good. (Page 11)

Analyst challenged the effectiveness of branding given flat segment revenue, and management clarified the impact of pricing competition and their strategy to prioritize margins and target value-seeking customers.

Asked by Ashutosh Nemani

How gross margins will improve given lower scanner margins but scanners being a key enabler Direct
a scanner is a hardware. If I am buying the hardware, say, for example, at Rs. 100, you would typically sell at 20%, 25%, 30% hardware to a customer, but when I am creating our own product that is where the gross margin will be in the range of 75%-80%. But this is a hardware, so you should not combine together to see the margin and scanner is one of the key component of enabler because when it comes digital impression versus say a physical impression, our operation efficiency... (Page 9)

Analyst sought clarification on the apparent contradiction of lower scanner margins versus their strategic importance, and management explained the long-term operational efficiency and overall margin benefits driven by digitalization.

Asked by Nirali Shah

Employee costs as a percentage of sales have gone up Direct
Ma'am, if you see our FY '25 when we ended we were at 35.9 and our current is we are close to 36. So, net-net, we have not, but, of course, if we have to improve sales we have added some people in certain important positions for us to enable that growth for this year. (Page 8)

Analyst raised a concern about rising employee costs, and management clarified that the percentage was stable and additions were strategic for growth.

Asked by Shalini Gupta

2 min read 5 chapters

Detailed narrative

Q1 FY26 Performance Highlights

Laxmi Dental achieved its highest-ever quarterly revenue of ₹66 crores in Q1 FY26, marking a 10% year-on-year and 8% sequential growth. The company reported a healthy EBITDA of ₹11.9 crores, translating to an 18.2% margin, and a PAT of ₹8.3 crores with a 13% margin. Gross profit stood at ₹48.1 crores, maintaining a 73.3% margin. Finance costs significantly reduced to ₹0.5 crores from ₹1.4 crores, following the full repayment of debt.

Strategic Investment in AI Dentistry

The company made a strategic investment in IDBG AI Dent Global Private Limited, a startup focused on AI-powered dental imaging and X-ray analysis software. This acquisition is a key step towards increasing the penetration of digital dentistry and enhancing treatment quality and patient experience. The AI product is expected to launch within the current financial year and contribute to future revenue growth.

Product Mix and Digitalization Drive

The product mix saw the Dental Laboratory business grow by 8%, contributing 59% of revenues, while Aligner Solutions revenue rose by 18%, accounting for 28% of revenues. Scanner sales grew robustly by 26% YoY, with over 200 scanners sold in Q1 FY26. Management emphasized digitalization, particularly through scanners, as a critical enabler for operational efficiency and long-term profitability, despite scanners having lower gross margins than other products.

Growth Outlook and Geographical Diversification

Laxmi Dental maintains its full-year FY26 revenue growth guidance of 20-25%, anticipating sequential growth of 8-10% quarter-on-quarter. The Kids-e-Dental business is also projected to grow by 20-25% upon receiving pending regulatory approvals in Q3 or Q4 FY26. The company is actively diversifying its business geographically, with strong efforts in APAC, the Middle East, and Europe, to mitigate risks like the new 25% US tariffs.

Capital Allocation and Debt Repayment

In line with its IPO objectives, Laxmi Dental fully repaid its debt during the quarter, leading to a significant reduction in finance costs. The company plans for capital expenditure in the range of ₹68 crores over the next two years, utilizing IPO funds for expansion, particularly in digital dentistry and brand building. This capex is deemed sufficient for planned growth and capacity enhancements.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls