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Laxmi Dental, India’s only end-to-end integrated dental products company, has announced its Initial Public Offering (IPO). This move marks a significant step for the company, which specializes in crafting custom dental prostheses and offering advanced aligner solutions.
About the Company
As of September 2024, Laxmi Dental ranks among the top two largest Indian dental laboratories by revenue. Dental laboratories play a crucial role in the dental care industry, manufacturing customized dental prostheses such as crowns and bridges for dentists. Laxmi Dental’s portfolio also includes clear aligners, thermoforming sheets, and paediatric dental products, making it a comprehensive provider in this niche sector.
The majority of the company’s revenue is derived from the laboratory segment, with exports contributing a notable share.
Revenue from different business segments:
Revenue from Exports:
Industry Context
The dental care market in India is expanding rapidly. In 2023, it was valued at $3.4 billion and is projected to reach $7.8 billion by 2030, growing at an annual rate of 12.6%. This growth is supported by the rise of dental tourism, where patients from other countries seek affordable and high-quality dental care in India.
Key industry growth projections include:
● Custom-made crowns and bridges: Estimated to grow at 11.8% annually in India, compared to 8% globally.
● Clear aligners: Projected to grow at 23% annually in India, compared to 15% globally.
● Paediatric dental crowns: Expected to grow at 14.5% annually in India, compared to 7.5% globally.
Financial Performance
Laxmi Dental’s financials indicate steady growth. Revenue from operations has been increasing, supported by consistent EBITDA margins and net profits.
Revenue from operations:
Revenue from operations has grown at a CAGR of 18.93% from FY 22 to FY 24.
EBITDA and EBITDA Margin:
EBITDA has grown at a CAGR of 109.64% from FY 22 to FY 24.
Net Profit:
Key Risks
The company faces risks, including the geographic concentration of its facilities around Mumbai and dependence on exports, which account for about 34% of its revenue.
The company is also dealing with pending litigations amounting to approximately ₹50 million, which represent around 20% of its net profits.
Valuation and Peer Comparison
The company does not perceive any listed peer, Indian or otherwise, of a comparable size from the same industry and with similar business model. However, for the purpose of disclosures they have considered listed companies offering miscellaneous medical devices and have accordingly identified Poly Medicure Limited (“PML”).
The company’s FY24 price-to-earnings (P/E) ratio at the upper price band is 89.17. For comparison, Poly Medicure Limited, a listed peer in the broader medical devices sector, has a P/E of 94.02.
Use of IPO Proceeds
The proceeds from the IPO are intended for various purposes, including capacity enhancement, debt repayment, and general corporate expenses.
IPO Details