Laxmi Dental Q1 FY27 earnings call

Laxmi Dental Limited delivered a strong Q1 FY27, achieving its highest ever quarterly revenue of approximately ₹75 crores, representing a 13.9% year-on-year growth. The company also reported robust profitability, with EBITDA growing by 20.6% year-on-year to ₹14.4 crores, and EBITDA margins improving to 19.2%. Profit After Tax (PAT) saw a 23.8% year-on-year increase, reaching ₹10.3 crores, with PAT margins at a healthy 13.8%.

All key business segments contributed to the strong performance. The dental lab business recorded a 23.5% year-on-year revenue growth, significantly boosted by a 37.4% growth in the international market. The aligner solution business also performed well, growing 28.6% year-on-year, with Bizdent and Vedia contributing 27.8% and 29.3% growth respectively. The paediatric dental business, Kids-e-Dental, demonstrated impressive growth of 54.4% year-on-year, indicating successful scaling of this segment.

The company is making strategic investments for future growth and efficiency. In FY27, plans are in place to invest in new machinery to modernize and expand manufacturing capabilities. A letter of intent has been executed to acquire land in Palghar, Maharashtra, for a new unified facility, aiming to transition from current rented premises, reduce ₹2 crores in annual rent, and allow for 3x expansion. Additionally, a new CEO has been appointed to lead the USA business, bringing over 32 years of experience to strengthen market leadership.

Laxmi Dental is actively promoting digital dentistry, with domestic digital penetration (combining dental lab and aligner business) estimated at 75-80%, while international operations are majority digital. The company plans to deploy 800 to 1,000 scanners in FY27. Investments in AI-led automation, including AI crowns currently in beta, are expected to enhance operational efficiencies, with initial higher costs projected to decrease as scale increases.

The company emphasizes building a strong brand in the dental industry through various initiatives. These include engaging brand ambassadors, in-clinic branding, social media advertising, and patient education to encourage informed choices about dental restorations. Management believes that trust, quality standards, and continuous innovation, coupled with branding efforts, are key differentiators in the market.

Gross profit for the quarter stood at ₹58.7 crores, reflecting a 22.1% year-on-year growth and a gross margin of 78.6%. Employee costs increased by 6.2% sequentially to ₹28.4 crores, partly due to the new US CEO appointment and other key hires. Other expenses rose to ₹15.9 crores from ₹12.5 crores in the prior year, driven by higher freight costs, ECL provisions, and AI-led automation investments. The company maintained a debt-free status, with finance costs at a minimal ₹0.3 crores.