Business Overview:
Laxmi Dental Limited is an Indian end-to-end integrated dental products company. The company’s offerings include:
- Custom-made crowns
- Bridges, branded dental products such as:
- Aligner solutions
- Thermoforming sheets
- Aligner-related products
- And Pediatric dental products.
It is among the top two largest Indian dental laboratories based on revenue for Fiscal 2024, and has a presence of over 20 years in the dental laboratories business. The company has a reach of over 22,000 dental clinics, dental companies, and dentists as of Sep 30, 2024.
It distributes and sells its products in more than 95 countries. The company has 6 manufacturing facilities, 3 of which are located in Mira Road, Mumbai.
IPO Details:
|
IPO Date |
13th Jan-25 to 15th Jan-25 |
|
Face Value |
₹ 2/- per share |
|
Price Band |
₹ 407 to ₹ 428 per share |
|
Lot Size |
33 shares and in multiples thereof |
|
Issue Size |
₹ 698.06 crores |
|
Fresh Issue |
₹ 138 crores |
|
OFS |
₹ 560.06 crores |
|
Expected Post Issue Market Cap (At upper price band) |
~ ₹ 2,352.38 crores |
Objects of the Issue:
- Repayment of certain borrowings
- Investment in certain subsidiaries, for the repayment of their outstanding borrowings
- Funding capex.
- Investment in subsidiary, Bizdent Devices Pvt ltd, for funding capex.
- General Corporate Purposes
Strengths:
- Integrated Operations: It is the only end-to-end integrated dental products company in India, as of Sep-24, allowing them to have significant control over their supply chain and enables them to provide a comprehensive portfolio of dental products
- Market Position: It is the 2nd largest player in the domestic laboratory business and the largest export laboratory with increasing adoption of digital dentistry.
- Vertically Integrated and Diverse Product Portfolio: It has a diverse branded product portfolio. It is one of the few vertically integrated players globally, with backward integration including proprietary manufacturing of aligner sheets.
- B2B2C Business Model: The company uses a B2B2C model for its clear aligner sales, selling through a network of dental professionals to the end customer. This model helps build credibility, lowers marketing costs, and offers an economic advantage.
- Large Dental Network: It has a large dental network with a reach of over 22,000 dental clinics, dental companies, and dentists.
Risks:
- Customer Concentration and Lack of Long-Term Contracts: The company’s dental network generally does not enter into long-term contracts or agreements, leading to potential pricing pressures.
- Lack of long-term supply orders of key raw materials and components from our suppliers increases the risk of pricing pressure.
- Risk from Supply chain disruption: As of Mar-24, 53.32% of Cost of goods sold are imported. Any disruption in the value chain would significantly impact the operations of the company.
- Under Insured: As of Sep-24, 77.47% of assets are insured i.e., in the event of any unforeseen situation the company would incur big outflow of economic resources.
Financial Highlights:
|
Particulars |
FY2024 |
FY2023 |
FY2022 |
|
Revenue from operations (Rs. In Crores) |
194 |
162 |
137 |
|
Growth in Revenues |
19.7% |
18.2% |
|
|
Adjusted EBITDA (Rs. In Crores) |
33 |
10 |
5 |
|
Growth in EBITDA |
230% |
100% |
|
|
EBITDA Margins |
20.7% |
46.3% |
17% |
|
PAT (Rs. In Crores) |
25 |
-4 |
-19 |
|
PAT Margins |
12.8% |
|
|
|
RoE |
78.8% |
-19.6% |
-60.5% |
|
RoCE |
19.9% |
-0.3% |
-19.4% |
Conclusion:
Market Size of Indian Medical Device Segments is expected to grow from US $15.4 Bn to US $68 Bn from 2022 to 2030.
The company has recently turned positive at PAT level with a PAT margin of 12.8%, and improved it capital efficiency ratios.
However, considering the size of the market, operations of the company – earnings valuation of 89x seems to be high.
Therefore, we recommend to subscribe to this IPO for listing gains.
