Laxmi Dental Ltd (LAXMIDENTL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Laxmi Dental Limited Q2 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Moderator: you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Rajesh Khakhar, Chairperson and Whole-time Director. Thank you and over to you, sir.
Rajesh Khakhar (Laxmi Dental Ltd): Thank you. Good morning, everybody. A warm welcome to all of you, and thanks for joining our earnings call. I would like to take this opportunity to wish everyone a very happy and a prosperous Diwali. On this call, we are joined by our MD & CEO, Sameer Merchant; CFO, Mr. Dharmesh Dattani; and Strategic Growth Advisors, our Investor Relations advisors. The results and the presentations are uploaded on the stock exchange and company website. I hope everybody has had a chance to look at them. I am delighted to share that Q2 FY '27 was another positive quarter for us, building on the healthy start we made for FY '27. We have delivered steady growth, healthy profitability, and continued progress on the strategic priorities we have laid out for the year. Our revenue for Q2 FY '27 stood at Rs. 79.5 crores, recording a highest-ever quarterly revenue as well as EBITDA. Our EBITDA for the quarter grew by 38.5%, and PAT grew by 17.6%. EBITDA and PAT margins for the quarter stood at 19.2% and 12.6%, respectively. This improvement in profitability is a result of a better product mix and our continued focus on operational efficiency. The growth was broad-based across our core dental segments: Dental Laboratory, Aligner Solutions, and Paediatric Dental Products. This is exactly how we had envisaged our digital strategy to play out. The scanners deployed with our dental partners over the past few years were meant to deepen our connection with this clinic and create higher recurring opportunities across our laboratory and aligner business. We are now seeing that ecosystem translate into consistent, recurring business. I am also happy to share that both our dental lab and aligner business delivered solid performance during the quarter. Our domestic dental lab, international lab, as well as Bizdent, our clear aligner business, delivered its highest-ever quarterly revenue. Sameer will take you through the segment details shortly. Moving on to a important update on our IPO proceeds. We successfully got a shareholders' approval for updating the objects and extending the timeline for utilizations. I would like to thank all our shareholders for the strong support and the confidence they have placed in us. The unutilized IPO fund of Rs. 48.1 crores will now be deployed towards building our own manufacturing infrastructure, about Rs. 27 crores towards acquisition of land and constructions of building and infrastructure for dental laboratory and aligner manufacturing facilities. And about 21 crores towards machinery, computer equipment, and other movable assets for the existing and new facilities. This deployment is planned across FY '27 and FY '28. Dentistry today is at a defining moments, with digital technologies, artificial intelligence, and precision manufacturing transformation clinical practices. As India's only fully-integrated dental product company, we remain focused on our growth strategies across geographies, product innovations, market reach, quality standards, and achievement in our operations to create better efficiency and scalability. Now, I will request Sameer to give you some more color on our business performance during the quarter. Thank you.
Sameer Merchant (Laxmi Dental Ltd): Thank you, Rajesh Bhai. Happy Diwali to everyone. Speaking about our segmental performance for the quarter,
Sameer Merchant (Laxmi Dental Ltd): Our dental lab business grew by 22.7% YoY with a solid growth of 32% in the international lab and 15% in our domestic lab business. In the domestic market, the growth is driven by increasing digital adoption and deeper engagement with our dental partners through our hub-and-spoke model. Our digital penetration in the domestic lab business has reached around 78% and remains firmly on track towards our medium term target of over 90%. Every scanner deployed does far more than digitize impression. It strengthens our connection with the dentist, improves accuracy, and enhances workflow efficiency. In international markets, the momentum reflects the strong relationship and market presence we have built across USA, the UK, and Europe over the years. Along with our growing partnership with dental service organizations, we are also preparing for our participation in the International Dental Show in Cologne, Germany, towards the end of the fiscal year, which will provide an excellent platform to showcase our products and further expand our global network. The cost of this event is already budgeted in our full year marketing expense. Our aligner solution business recorded a healthy growth of 23.5% YoY during the quarter. Within this segment, Bizdent, our branded clear aligner business, delivered a strong growth of 27.7% YoY, while Vidya registered a 19.1% YoY increase in growth. The performance in our clear aligner business reflects the growing acceptance of our Illusion Aligners among dentists and patients. This showcases the impact of our branding and promotional activities as well as superior product quality. Our pediatric dental business, Kidz Dental, continued its strong growth trajectory, delivering a 16.7% YoY growth during the quarter as the business continues to scale up steadily. Scanner sales contribution for the quarter was 3.5 crore against Rs. 8.9 crore in the same period last year. We continued to evaluate our scanner road map in line with overall market situation. Scanner remains one of our strategic importance for us to scale the business with existing and new dentists along with cross selling opportunities. Going forward, as part of our digitalization strategy, we plan to deploy scanners on a subscription model, reducing upfront adoption cost, making the solution more affordable for dentists, while increasing their stickiness and driving incremental business for the company. Speaking about transition planned for domestic lab and aligner solutions, we currently operate our manufacturing from leased premises in Mira Road across multiple vertically structured units, which have served us well so far. But with the increasing scale and complexity of our operation, a self-owned purpose-built horizontal integrated facility is a strategic investment that will consolidate our operation, improve our workflow and efficiency, and provide the capacity and scalability required for the next phase of of our growth. The transition from old plant to the new plant will happen in a planned and a gradual manner in in order to avoid any impact on the regular operations of our business. Expected time line to complete this transition is by end of financial year '28. We believe the potential for dentistry to grow both in India and globally is immense with a continued investment towards expanding our capabilities and infrastructure coupled with multi-decade experience, strong dentist relationships, and superior product quality. Laxmi Dental is well positioned to scale and capitalize on the rising growth opportunities in the medium to long term. I now hand it over to our CFO, Mr. Dharmesh Dattani, to take it forward. Thank you so much.
Dharmesh Dattani (Laxmi Dental Ltd): Thank you and happy Diwali to everyone. Let me give a glance at our consolidated financial performance during Q2 FY '27. Revenue from operations stood at Rs. 79.5 crores, marking the highest-ever quarterly revenue, as against 72.3 crores in Q2 FY '26. Gross profit increased by 23.5% YoY to Rs. 61.2 crores. Gross margin expanded
Dharmesh Dattani (Laxmi Dental Ltd): to 76.9% compared with 68.5% in the corresponding quarter last year, primarily driven by a favorable product mix. We have witnessed some margin improvement in our core dental segment as well. Other expenses were lower sequentially and grew year-on-year due to higher business promotion, freight costs, and spend on AI-led automation. Other expenses stood at ₹14.8 crore. EBITDA grew by 38.5% YoY to ₹15.3 crore, marking the highest quarterly EBITDA reported by the company. EBITDA margins expanded by approximately 390 basis points to 19.2% compared with 15.3% in Q2 FY '26. Our adjusted EBITDA, which includes recorded EBITDA, 60% of Krest Dental PAT, 49% of IDBG AIDEN PAT, and ESOP expenses, stood at ₹16 crore for the quarter. Profit after tax grew by 17.6% YoY to ₹10 crore. PAT margin improved to 12.6% compared with 11.8% in Q2 FY '26. Additionally, I would like to highlight that we have recently received a tariff refund of approximately ₹5.5 crore, excluding interest, which will be reflected in our Q3 FY '27 results. Moving on to our H1 FY '27 performance. Revenue from operations for the half year stood at ₹154.2 crore compared with ₹137.9 crore in H1 FY '26. Gross margin improved to 77.7% compared with 70.8% in the corresponding period last year. EBITDA grew by 29.2% to ₹29.6 crore, while EBITDA margin expanded to 19.2% from 16.6% in H1 FY '26. PAT increased by 20.7% to ₹20.4 crore, with PAT margin improving to 13.2% from 12.2% in the corresponding period last year. The company continues to maintain debt maintain a debt-free balance sheet. During H1 FY '27, we incurred capital expenditure of approximately ₹16.7 crore. As of September 30, 2026, our cash and bank balances, including fixed deposit and other investments, stood at ₹97 crore. With this, we conclude our opening remarks and open the floor for Q&A. Thank you.
Moderator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Lakshmi Narayanan from Durga Investment. Please go ahead.
Lakshmi Narayanan (Durga Investment): Yeah. Thank you. Question is that sir in terms of your sales, what is the mix of the channel, hospitals or to to pharmacist or whichever way you're classifying?
Sameer Merchant (Laxmi Dental Ltd): Hi, so I think our mix has never been on the pharmacy side, so to clarify you know, we don't deal with pharmacies today. In terms of hospital versus the clinics, I would say majority is clinics because there are very less hospitals who are running a very efficient dental unit within the hospital. So it's it's even if it's there it like will be less than 1%, so it's majority the clinics which are giving us business and we are working with them.
Lakshmi Narayanan (Durga Investment): Okay, and and what is the margin structure in terms of what the customer pays and what you realize, what is the mark up usually the clinics have?
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