Laxmi Dental Limited — Q4 FY25 earnings call

Call held 27 May 2025

Management summary

Laxmi Dental reported its highest ever revenues and profits for FY25, driven by strong growth in both domestic and international markets, and particularly in Aligner Solutions. Q4 FY25 saw some aberrations, including a decline in the domestic lab business, but the company remains focused on digitalization, brand-building, and exploring inorganic growth opportunities. The company's debt-to-equity ratio is healthy, and it plans to deploy IPO proceeds for capex and strategic initiatives.

Highlights

  • FY25 Revenue of ₹239 crores, up 23.5% YoY, highest ever.

  • FY25 PAT of ₹32 crores, up 26.2% YoY, highest ever.

  • Digital penetration increased to 64% from 49% during FY25.

  • IDS event participation generated significant global leads across all three businesses.

  • Debt-to-equity ratio improved to 0.06, indicating a strong balance sheet post-IPO.

Concerns

  • Q4 FY25 results featured 'some aberrations' impacting performance.

  • Domestic lab business de-grew by 14% in Q4, with overall FY25 growth at 8% for this segment.

  • Employee cost in Q4 FY25 was ₹24.4 crores, including ESOP expenses of ₹1.75 crores.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹61 Cr
    YoY +10.2%
  • Gross Margin
    78.7%
    YoY +1%
  • EBITDA
    ₹9.5 Cr
  • Adjusted EBITDA
    ₹12.4 Cr
  • PAT
    ₹4.3 Cr

FY25

  • Revenue
    ₹239 Cr
    YoY +23.5%
  • EBITDA
    ₹42 Cr
    YoY +75.8%
  • Adjusted EBITDA
    ₹52 Cr
  • PAT
    ₹32 Cr
    YoY +26.2%
  • PAT Margin
    13.3%

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

SegmentRevenue ContributionGrowthFY25 Revenue
Dental Laboratory Business62%19%—
Aligner Solutions32%41%₹77 Cr
Kids-e-Dental——₹26 Cr

Capital allocation

high confidence
  • Capex ₹68 Cr IPO proceeds
    • Machine equipment and intraoral scanners for digital penetration
    Post our participation in the IDS dental show in Germany, we have identified some machine equipment with cutting-edge technologies along with intraoral scanners and have placed orders for the same in this quarter. ... for now we have Rajat from our IPO proceed, we have planned for capex, which is close to INR68 crores and we have only done very small amount in the last financial year, while we are deploying more in the current year.
  • Debt Debt disclosed
    • Repayment Repaid debt post IPO
    Currently, our debt-to-equity ratio stands at 0.06.
  • Liquidity Cash ₹100 Cr Cash sitting on books from IPO proceeds, available for capex and inorganic growth.
    Sameer, just lastly we have some INR100 crores of cash sitting on the books, so could you just tell me how do you plan to utilize this going forward?

Guidance & targets

Revenue

  • Revenue Growth Revenue · next 2-3 years · High confidence 20-25%
    We are a growth-focused company, continue to see financial performance improving year after year. FY25 was no exception, delivering highest ever revenues and profits at INR239 crores and INR32 crores respectively. ... I think on our side we are extremely strong. Like Rajesh Bhai said last year we did the highest ever at 24% and what we are clearly saying that the path is only forward.

    — Sameer Merchant

Digital Penetration

  • Digital Penetration Digital Penetration · moving forward · Medium confidence 90-95%, hopefully 100%

    Previously 64% → 90-95%, hopefully 100%

    our goal is to go towards 90%-95%, hopefully 100% digitization. Like in the aligner category, we are at almost 99% digitization.

    — Sameer Merchant

Advertising & Promotion

  • A&P as % of Sales Advertising & Promotion · annual · High confidence ~5%
    Going ahead on a full year basis, our A&P can be taken at approximately 5% of the sales.

    — Dharmesh Dattani

Profitability

  • Margin Expansion Profitability · moving forward · Low confidence definitely scope for expansion
    I think there is definitely scope for expansion

    — Sameer Merchant

ESOP Expenses

  • Total ESOP Expenses ESOP Expenses · over 4 years · High confidence ₹14 crores
    I think in the next 4 years, we are looking at about INR14 crores of ESOPs. That is in the next 4 years. All put together, spread across four years, all put together. The four year total amount is INR14 crores.

    — Sameer Merchant

What to watch in Q1 FY26

Digital Penetration Progress

next quarter / ongoing
Current 64%
Target Moving towards 90-95%, hopefully 100%

Why it matters

Digitalization is a key strategic focus for efficiency and market reach, impacting overall growth and margins.

Digitalization is the way to go in industry in dentistry and we are investing in the scanner to be able to deploy it aggressively across our dental partners. ... our goal is to go towards 90%-95%, hopefully 100% digitization.

Risks & concerns

  • Aberrations in Q4 results

    medium

    Management noted 'some aberrations' in Q4 results, which impacted performance.

    Management acknowledged

  • Domestic lab business de-growth

    medium

    The domestic lab business de-grew by 14% in Q4 and showed only 8% growth for FY25, raising concerns about competitive intensity.

    Analyst acknowledged

  • US tariff situation

    low

    Management acknowledged initial concerns about US tariffs but stated they have managed the situation well, seeing strong international growth, especially in the US.

    Management managed

Q&A highlights

7 direct
Domestic lab business growth and competitive intensity Partial
So, on the lab side, like I said while the domestic, you have seen an X percentage. We would like to say that we see it as an overall scenario and especially in the last two quarters or maybe one quarter, if you see two quarters starting today with this tariff situation in the US, we have really managed to be there, make sure that the tariff has not affected the international operations on our side.

Analyst highlighted a significant de-growth in the domestic lab business in Q4 (-14%) and slow FY25 growth (8%), questioning competitive pressures, which management attributed to overall market scenario and strategic focus on digitalization rather than direct competition.

Asked by Nikhil Mathur

EBITDA margin expansion potential Direct
I think we believe that there is a constant drive, not just on the aligner side, but even on the laboratory side. So, if you see at an overall level, the laboratory margins have also improved. And that is the goal moving forward. I spoke about the digitization. I spoke about introducing AI to our product portfolio.

Analyst sought quantification on future EBITDA margin expansion, especially with faster aligner business growth. Management indicated improvement across all segments due to digitization and AI, but did not provide a specific numerical target beyond the adjusted 21% for FY25.

Asked by Nikhil Mathur

Competitive strategy for aligner solutions against D2C players Direct
I think there are multiple plans that we have done, happy to share but I think the primary thought that you should or everyone should understand that the name that you spoke of, they are a direct to consumer brand. So it's very different than what we are doing, we are a brand which is led by dentist.

Analyst questioned how Laxmi Dental competes with D2C aligner brands like Toothsi. Management emphasized their dentist-led model, brand trust built over decades, and profitability compared to D2C players.

Asked by Mahesh Attal

Utilization of aligner capacity Direct
Mathematical analysis, it will be 67% capacity utilization in the aligner category. That is how, what we are currently.

Analyst asked about the potential revenue if the aligner segment operated at full capacity. Management stated current utilization is 67%, providing a clear metric for future growth potential.

Asked by Mahesh Attal

Details on ESOP allocation and P&L impact Direct
So ESOP has been given to close to almost 200 plus people. And we have all kind of hierarchy from people who have contributed great on a long term, or people who have contributed extremely good on the midterm, and also certain short term, where we see a lot of potential in people. ... this is a standard 4 year vesting that we have given to them.

Analyst sought clarity on ESOP beneficiaries, hierarchy levels, and the duration of P&L impact. Management confirmed ESOPs for ~200+ people across all hierarchy levels with a 4-year vesting period, totaling ₹14 crores over this period.

Asked by Rajat

Lab delivery timelines and digital sales strategy Direct
So on a digital side, we can deliver the jobs faster. On the analog side, the time taken is for the impression to reach the location. And in terms of labs, we have a lab in Mumbai. We have setup in Kerala. We have mini setups, which we call as satellites, and your hub and spoke model in Chennai, Ahmedabad, Delhi Bangalore, multiple cities.

Analyst inquired about lab infrastructure, delivery timelines, and the role of scanners. Management detailed their hub-and-spoke model, faster digital impression processing, and the success of digital sales people equipped with intraoral scanners.

Asked by Swaraj Mehta

Utilization of cash from IPO proceeds Direct
See for now we have Rajat from our IPO proceed, we have planned for capex, which is close to INR68 crores and we have only done very small amount in the last financial year, while we are deploying more in the current year. ... Also open at looking inorganic.

Analyst questioned the plan for utilizing the ₹100 crores cash on books. Management stated ₹68 crores is planned for capex, with deployment accelerating this year, and also mentioned openness to inorganic growth opportunities.

Asked by Rajat

Breakdown of aligner growth (volume vs. price) Direct
I would say the say majority is in the number of cases and the growth. The price hike has been extremely small. So we are focusing more on delivering more units, more operational efficiency, because the goal is with the automation and with the capital that we have and with the AI that we are evaluating, we should be able to really leverage our operational cost and in fact create still the great product that we have and at a similar price or even the better price in the future for a doctor and the consumer, so that it becomes more accessible and we are able to leverage more volume.

Analyst asked for the split of 42% aligner growth between volume and price. Management clarified that the growth was primarily volume-driven, with minimal price hikes, emphasizing their focus on operational efficiency and automation to drive volume.

Asked by Ashutosh Nemani

2 min read 6 chapters

Detailed narrative

Strong FY25 Performance with Record Revenues and Profits

Laxmi Dental Limited achieved its highest ever revenues and profits in FY25, with revenue reaching ₹239 crores, marking a 23.5% year-on-year growth from ₹194 crores in the previous year. PAT also hit a record high of ₹32 crores, growing 26.2% year-on-year, with a PAT margin of 13.3%. The company's EBITDA for FY25 stood at ₹42 crores, demonstrating a robust 75.8% year-on-year growth, reflecting strong operational performance throughout the year.

Q4 FY25 Performance and Aberrations

For Q4 FY25, the company reported a revenue of ₹61 crores, an increase of 10.2% year-on-year from ₹55 crores. Gross margin improved by one percentage point year-on-year to 78.7%. However, management noted 'some aberrations' in the quarter, including promotional expenses of approximately ₹45 lakhs for the IDS Germany dental show and ESOP expenses of ₹1.75 crores within the total employee cost of ₹24.4 crores. Adjusted EBITDA for the quarter was ₹12.4 crores, and PAT was ₹4.3 crores.

Strategic Focus on Digitalization and Innovation

Digitalization remains a core strategic pillar, with the company's digital penetration increasing to 64% in FY25 from 49%. The goal is to further increase this to 90-95%, potentially 100%. Laxmi Dental is investing in intraoral scanners and advanced machine equipment to aggressively deploy digital solutions across its dental partners. The company is also exploring the integration of AI capabilities to enhance productivity and improve the experience for dentists and customers.

Segmental Growth and Aligner Business Strategy

In FY25, the dental laboratory business contributed 62% of total revenue and grew by 19%. The Aligner Solutions segment showed strong momentum, growing 41% year-on-year and contributing 32% of the revenue, totaling ₹77 crores. The Kids-e-Dental business generated ₹26 crores in revenue with an EBITDA of ₹15.5 crores and PAT of ₹12 crores, and recently received regulatory clearance for Singapore, with more international clearances expected soon. The aligner business operates on a dentist-led model, differentiating it from D2C competitors, and offers a flexible 'pay-as-you-go' model.

Capital Allocation and Inorganic Growth Outlook

Post-IPO, the company has a strong balance sheet with a debt-to-equity ratio of 0.06. Management has repaid debt and plans to deploy ₹68 crores from IPO proceeds towards capex, primarily for new machine equipment and intraoral scanners. While a small amount was spent in FY25, deployment will accelerate in the current year. Laxmi Dental is also actively looking for select inorganic growth opportunities that offer strong synergy and leverage future growth.

International Dental Show (IDS) Impact and Global Reach

The company's participation in the International Dental Show (IDS) in Germany, a premier dental event held once every two years, was highly impactful. Laxmi Dental had three booths, showcasing products across its businesses to global dentists, labs, and distributors. This event generated significant leads from multiple countries, which the company is now processing and expects to translate into good results within the current financial year, with momentum carrying forward for the next two years due to registration timelines.

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