Highlights
| Issue Size –: 1,63,09,766 shares | Issue Open/Close – 13 Jan / 15 Jan, 2025 |
| Price Band (Rs.) 407 – 428 | Issue Size (Rs.) – 6,980 mn |
| Face Value (Rs) 2 | Lot Size (shares) 33 |
Laxmi Dental Limited (LDL) incorporated in 2004, is India’s only end-to-end integrated dental products, offering a comprehensive portfolio of dental products. Their offerings include custom-made crowns and bridges, branded dental products such as clear aligners, thermoforming sheets and aligner related products as a part of aligner solutions, and paediatric dental products.
Primary dental products offered by their laboratory are focused on custom made dental prosthesis such as metal free crowns and bridges, including range of branded premium crowns under “Illusion Zirconia”, porcelain fused to metal (PFM) crowns, bridges, and dentures.
LDL is a vertically integrated dental aligner company with a brand presence of more than 20 years. They manufacture dental products across six manufacturing facilities spread across 146,804.42 square feet.
They have also launched iScanPro, branded intraoral scanners for digital dentistry. More than 160 intraoral scanners were deployed by the company in Indian market to promote digital dentistry. One of their divisions also undertakes the distribution of some of dental products offered by their laboratory.
Among the Indian dental labs, LDL is the largest exporter of custom-made dental prosthesis, catering primarily to US and UK. They are the preferred partner for one of the largest DSO in the USA with more than 1,650 clinics in the USA.
Out of the total proceeds of Rs. 6,980 mn, ~Rs. 276 mn would go towards repayment of portion of certain borrowing availed by the company and its subsidiaries, Rs. ~685 mn would go towards funding capex, Rs. 419 would go towards general corporate purpose. And Rs. 5,600 mn would go towards existing selling shareholders of the company.
Key Highlights
- Key Highlights
- Indian custom-made crowns and bridges market is estimated to grow from USD 1.4-3.1 bn between2023-2030 at 11.8 pct against global market estimate from USD 71-121.6 bn between2023-2030 at 8.0 pct whereas Indian clear aligner market is estimated to grow from USD133.6-569.0 mn between2023-2030 at 23.0 pct compared to global market estimate from USD 20.7-54.9 bn between2023-2030 at 15.0 pct.
- The company is one of the few vertically integrated players globally which have a backward integrated (i.e. manufacturing the raw materials to designing of dental products) and forward integrated (that is offering solutions for treatment planning) business model.
- Their presence across the value chain of dental products enables them to benefit from cross-selling opportunities and increases wallet share from the existing Dental Network, which positions them well to capture the increased potential of the growing market opportunities across segments.
- LDL entered the paediatric dental market through acquisition of 60 pct stake in Kids-E-Dental LLP in 2021. The global paediatric crown dental market is estimated to grow from USD 2.1 bn in 2023 to USD 3.5 bn in 2030.
- LDL adopted a B2B2C business model for sale of clear aligners, which means that their dental products are sold through the Dental Network to the end consumer patient, lending credibility to dental products since they are being recommended by their Dental Network and LDL has currently no plan to adopt D2C model.
- SGLTL’s key growth strategies include (i) Deepen penetration amongst existing Dental Network while also expanding their Dental Network (ii) continue to scale up branded product offerings (iii) undertake product enhancements of existing dental products and launch new dental products (iv) enhance manufacturing capacities with increasing focus on automation and adoption of new technologies (v) Continue to follow a multi-channel approach in marketing.
- The company’s sales/EBITDA has grown by 18.96 pct/109.9 pct CAGR Over FY22-24. During FY24, company reported sales of Rs. 1,936 mn which grew by 19.75 pct YoY while EBITDA grew by 165 pct YoY to Rs. 238 mn as EBITDA margin expanded by 674 bps FY24. As of FY24 the company reported profit of Rs. 252 mn against loss of Rs. 42 mn. As of H1FY25 company registered sales/EBITDA/Profit of Rs. 1,168 mn/Rs. 227 mn/ Rs. 227 mn (includes exceptional gain of Rs. 63 mn).
Key Risk
- Company lacks commitments from Dental network for long term purchase order. Which increases pricing pressure and may hit company’s business.
- Any withdrawal, or termination of, or unavailability of direct/ in-direct tax benefits and exemptions being currently availed by LDL may affect business, currently LDL avail of tax benefits under Section 80JJAA of the Income Tax Act, which allows a company to claim a deduction of 30 pct of the additional employee cost incurred in a financial year.
Financial Performance
| Particulars | FY22 | FY23 | FY24 | H1FY25 |
| Sales (Rs. mn) | 1,368 | 1,616 | 1,936 | 1,168 |
| EBITDA (Rs. mn) | 54 | 90 | 238 | 227 |
| EBITDA Margin (%) | 3.96% | 5.55% | 12.29% | 19.47% |
| Profit (Rs. mn) | -171 | -45 | 179 | 182 |
| Profit Margin (%) | -12.50% | -2.78% | 9.25% | 15.58% |
| ROCE (%) | -19.40% | -0.33% | 19.97% | 24.64% |
| ROE (%) | -60.47% | -19.62% | 78.78% | 40.73% |
Peer comparison based on FY24 Financials
| Particulars | Laxmi Dental Ltd | Poly Medicure Ltd |
| Sales (Rs. mn) | 1,936 | 13,758 |
| EBITDA (Rs. mn) | 238 | 3,582 |
| EBITDA Margin (%) | 12.29% | 26.04% |
| Profit (Rs. mn) | 182 | 2,583 |
| Profit Margin (%) | 15.58% | 18.77% |
| ROCE (%) | 19.97% | 26.17% |
| ROE (%) | 78.78% | 19.05% |
Valuation
Laxmi dental Limited is India’s only end-to-end integrated dental products company, offering a comprehensive portfolio of dental products and are among one of the few integrated players globally which have a backward integrated and forward integrated model. At the upper end of the price band of Rs. 428 the issue is priced at a PE of ~65 its FY25E annualised earnings. The issue looks fully priced.
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