Laxmi Dental Limited — Q2 FY26 earnings call

Call held 12 Nov 2025

Management summary

Laxmi Dental delivered a robust performance in Q2 FY26, with strong revenue growth of 26.5% YoY and a significant PAT increase of 44.7% YoY. The company achieved a debt-free status and maintained healthy liquidity. However, margins faced headwinds from US tariffs and a product mix shift towards lower-margin scanner sales, alongside competitive pressures in the domestic aligner market.

Highlights

  • Revenue from operations for Q2 FY26 grew by 26.5% year-on-year, reaching ₹72.3 crores.

  • PAT for Q2 FY26 increased by 44.7% year-on-year to ₹8.5 crores.

  • Scanner sales grew by 94.7% year-on-year in Q2 FY26, exceeding the number of scanners sold during the entire year of FY25.

  • The company paid off the entire amount of debt from its books, achieving a debt-free status.

  • Cash and bank balance, including fixed deposits, stood at ₹93.7 crores.

Concerns

  • EBITDA margins for Q2 FY26 were impacted by approximately 90 bps due to US tariffs, ESOP expenses, and annual salary increments, standing at 15.3%.

  • Gross profit margin contracted in Q2 FY26, reflecting 14.5% growth, primarily due to a revenue mix driven by higher scanner sales which have a relatively lower margin profile.

  • The domestic Bizdent (aligner) business continues to face competitive pressure in the market.

Key financials

2 periods

Headline

  • Revenue from Operations
    ₹72.3 Cr
    YoY +26.5%
  • Gross Profit
    ₹49.5 Cr
    YoY +14.5%
  • EBITDA
    ₹11 Cr
    YoY +26.3%
  • EBITDA Margin
    15.3%
  • PAT
    ₹8.5 Cr
    YoY +44.7%

H1

  • FY26 Revenue from Operations
    ₹137.9 Cr
    YoY +18.1%
  • FY26 EBITDA Margin
    16.6%
  • FY26 PAT Margin
    12.2%

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 Lab Business (excluding scanner performance)
    0.299 decimal_fraction YoY Growth
  • Domestic Lab Business
    ₹22.5 Cr Revenue0.232 decimal_fraction YoY Growth
  • International Lab Business
    ₹18.5 Cr Revenue0.392 decimal_fraction YoY Growth
  • Aligner Solutions
    ₹20 Cr Revenue0.123 decimal_fraction YoY Growth
  • Vedia (Aligner Raw Material/Machine)
    0.299 decimal_fraction YoY Growth
  • Scanner Sales
    0.947 decimal_fraction YoY Growth
  • Kids-E Dental (JV)
    0.214 decimal_fraction QoQ Growth

Capital allocation

high confidence
  • Capex Capex disclosed
    We have done a CAPEX of around Rs.6 crores in H1 FY26.
  • Debt Debt disclosed
    • Repayment Paid off the entire amount of debt from our books.
    Finance costs declined significantly as we paid off the entire amount of debt from our books.
  • Liquidity Cash ₹93.7 Cr Includes fixed deposits.
    Our cash and bank balance, including fixed deposits, stood at Rs.93.7 crores.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 20%-25%
    So, I think what we mentioned during the start of the year that we are confident to do 20%-25% revenue growth and between 13%-15% PAT.

    — Sameer Merchant

Profitability

  • PAT Margin Profitability · FY26 · High confidence 13%-15%
    So, I think what we mentioned during the start of the year that we are confident to do 20%-25% revenue growth and between 13%-15% PAT.

    — Sameer Merchant

  • EBITDA and PAT Margin Profitability · mid-to-long term · Medium confidence 20%
    I think we on a perspective it is very hard for us to tell you '26, '27, '28 but what you should see that as Laxmi Dental we have said that 20% is at least the target or first target first benchmark to reach in terms of the EBITDA and PAT margin for this year we have already said 13% to 15%.

    — Sameer Merchant

  • Vedia Margin Potential Profitability · future · Medium confidence upwards of 30%
    But once we are on a stabilized position, I think this is a good business where it can see a margin upwards of close to 30% in the future.

    — Sameer Merchant

Marketing

  • Promotional Spend as % of Revenue Marketing · ongoing · High confidence less than 5%
    For now, I think we are comfortable to what we are doing and we have said that our spend on all the promotions combined is less than 5% and that is where we intend to stay for now.

    — Sameer Merchant

Kids-E Dental

  • CE Certification Kids-E Dental · Q4 FY26 · High confidence obtained
    So, I feel that based on the feedback that we have had from our regulatory team, Q4 is when we expect to get the CE, which is an important step.

    — Sameer Merchant

  • Growth Rate Kids-E Dental · post CE certification · Medium confidence 25%-30%
    But when do you expect the historical growth rate of 25%-30% to come back in this business and country registrations to be over for the Kids-E dental? ... So, once CE opens up, I think we should go back to the numbers that we were in the past in terms of growth.

    — Sameer Merchant

What to watch in Q3 FY26

Kids-E Dental CE Certification

Q4 FY26
Current Pending
Target Obtained

Why it matters

CE certification is expected to open up 40 countries for Kids-E Dental, enabling a return to historical growth rates of 25-30%.

So, I feel that based on the feedback that we have had from our regulatory team, Q4 is when we expect to get the CE, which is an important step. CE opens up almost close to 40-countries for us in the world.

Risks & concerns

  • Global Economic Uncertainties

    medium

    Volatile and uncertain global economic landscape impacting growth trajectory and margin profile.

    Management acknowledged

  • US Tariffs

    medium

    Impacted Q2 FY26 EBITDA margins by approximately 90 bps, affecting profitability of international business.

    Management acknowledged

  • Competitive Pressure in Domestic Aligner Market (Bizdent)

    medium

    Ongoing competitive pressure in the domestic markets for the Bizdent aligner business.

    Management acknowledged

  • Gross Profit Margin Contraction due to Product Mix

    low

    Higher scanner sales, which have a relatively lower margin profile, led to a contraction in gross profit margin in Q2 FY26.

    Management acknowledged

Q&A highlights

6 direct
Gross Margin Outlook with Scanner Sales Partial
If the mix remains currently what it is in Q2, then that should be the expectation. But we expect that along with scanner, we will grow the other businesses as well. So, what we foresee is mid-term to long-term, this mix should change and come back to originally where we were in the range of 75% to 80%.

Analyst questioned if lower gross margins due to scanner sales are the new normal; management clarified it's a temporary mix effect, aiming for higher margins long-term.

Asked by Tushar Manudhane

Impact of US Tariffs on International Business Direct
So, the revenue is increasing primarily because not just on the US part and like we said, we are exploring new geographies, we have added customers, post our IDS event that we did in March in the different geographies as well. So, that is leading to the revenue. But again, yes, tariff is there. Currently in that situation, that is why profitability has been impacted there. But like I said, we are seeing a lot of news coming in every single day. In fact, yesterday there was a news from Trump that it should have an agreement very soon.

Management acknowledged tariffs impact profitability but highlighted revenue growth from new geographies and hinted at potential tariff resolution.

Asked by Tushar Manudhane

Competition Intensity and Differentiation Strategy Direct
I think on the competition side while you look at the dental lab scenario but again we have always seen Laxmi Dental as a complete end-to-end integrated dental company... we are doing the right things and the scanner like you mentioned where we are focusing on digital dentistry is not just today, we started this almost seven years back with first time when we launched our service.

Analyst raised concerns about increasing competition; management detailed their long-standing advantages in trust, digital dentistry, branding, and integrated operations.

Asked by Ajay

Scanner Sourcing and Vertical Integration Direct
So, currently we have a private label agreement which so the scanners are manufactured based on our specs, but in the future we are open to more models... anything that we do we are always looking at vertical integration on the backward side. So, backward integration we have done it with our aligner business, we have with our pediatric business, and in the future if we have to do it with any of our other businesses whether it is scanners or other material business we will do that where it will help us create more value for Laxmi Dental and their investors.

Clarified the company's strategy for scanner procurement (private label) and its broader commitment to vertical integration across its businesses to create value.

Asked by Ajay

Working Capital Days Direct
Currently, it is in the range of about 65-days-odd.

Provided a specific operational efficiency metric for investors, clarifying the impact of clearing IPO-related payables.

Asked by Kamlesh Bagmar

EBITDA Margin Recovery Timeline Partial
If you ask us timeline I would love to do it next quarter, but then we have to see how all the dynamics are, but I would say in terms of long term that is for us a number which internally we are very confident about.

Analyst probed for a specific timeline for margin expansion towards 20%; management indicated it's a mid-to-long term goal, not immediate.

Asked by Devansh Tandon

Aligner Business Strategy and Margin Improvement Direct
So, I do not think that is the strategy. The reason if you see we have been able to in fact improve our margins from what we were last quarter to this quarter in Bizdent which is the aligner business from 6.8% to 15.8%. That is the primary reason that we are not going on that path.

Management confirmed they are not resorting to discounts in the competitive aligner market, instead focusing on margin improvement, which has shown significant results (6.8% to 15.8%).

Asked by Ravi George

Benefits of Scanner Adoption for Dentists and Patients Direct
When a dentist adopts a scanner, it is not just that the remake rate or the error rate goes down... it is going to take them two minutes... tremendous patient comfort... OPEX versus CAPEX for a dentist... Live Scan Verification.

Provided a comprehensive explanation of the multi-faceted benefits of digital dentistry and scanner adoption, which is a key strategic focus and growth driver for the company.

Asked by Smith Gala

2 min read 6 chapters

Detailed narrative

Robust Q2 & H1 FY26 Financial Performance

Laxmi Dental reported a strong financial performance for Q2 FY26, with revenue from operations growing by 26.5% year-on-year to ₹72.3 crores. For the first half of FY26, revenue stood at ₹137.9 crores, marking an 18.1% year-on-year growth. PAT for Q2 FY26 saw a significant increase of 44.7% year-on-year, reaching ₹8.5 crores, demonstrating robust bottom-line growth despite market challenges.

Strategic Focus on Digital Dentistry and Scanner Sales

The company's commitment to advancing digital dentistry is evident in the remarkable 94.7% year-on-year growth in scanner sales during Q2 FY26. This growth allowed the company to exceed the total number of scanners sold in the entire previous fiscal year (FY25). Management highlighted that scanner adoption enhances patient comfort, reduces turnaround time to two minutes, and offers significant OPEX benefits for dentists, aligning with the strategy to increase digital penetration to over 90% of dentists.

Segmental Growth Across Lab and Aligner Businesses

The dental lab business, excluding scanner performance, grew by a solid 29.9% year-on-year in Q2 FY26. This was driven by a 23.2% growth in the domestic lab business to ₹22.5 crores and an even faster 39.2% year-on-year growth in the international lab business to ₹18.5 crores. Aligner solutions revenues also rose by 12.3% year-on-year to ₹20 crores, with Vedia (raw material for aligners) growing 29.9% YoY, showcasing broad-based growth across key segments.

Margin Dynamics and External Headwinds

Despite strong revenue growth, Q2 FY26 EBITDA margins were impacted, standing at 15.3%. This was primarily due to a 90 bps impact from US tariffs, along with ESOP expenses and annual salary increments. The gross profit margin also saw a contraction, growing 14.5% YoY, mainly attributed to a shift in revenue mix towards lower-margin scanner sales. Management, however, expects the product mix to normalize mid-to-long term, aiming for gross margins to return to the 75-80% range.

Debt-Free Status and Healthy Liquidity

A significant achievement for the quarter was the company becoming debt-free, having paid off the entire amount of debt from its books, leading to a decline in finance costs. This strong financial position is further bolstered by a healthy cash and bank balance, including fixed deposits, totaling ₹93.7 crores. Additionally, ₹64 crores of unutilized IPO proceeds are available for future CAPEX, with ₹6 crores already spent in H1 FY26.

Strategic Outlook and Competitive Positioning

Laxmi Dental aims for 20-25% revenue growth and 13-15% PAT margin for FY26, with a mid-to-long term target of 20% for EBITDA and PAT margins. The company emphasizes its 35-year legacy, brand trust (Illusion Zirconia), technological integration, and vertical integration strategy as key differentiators against regional competitors. For Kids-E Dental, management anticipates a return to 25-30% growth rates once CE certification is obtained in Q4 FY26, opening up access to 40 countries.

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