Domestic brokerage firm Nuvama Institutional Equities has started coverage on Laxmi Dental, India’s only fully integrated dental products company. The brokerage provides a ‘Buy’ rating and a target price of INR 570 per share, implying a potential upside of 28–40% from current levels.
The report comes at a time when Laxmi Dental’s stock is trading close to its IPO price of INR 428, after a volatile post-listing performance, listing at a premium of over 26% in January 2025 and then falling more than 28% from its highs.
India’s Dental Market
Nuvama is optimistic on the structural tailwinds of India’s highly underpenetrated and fragmented dental care sector, where the organized market share is in low single digits. The brokerage highlights India’s high oral disease burden, low penetration of modern orthodontic treatments and rising consumer awareness as key drivers of long-term growth.
Laxmi Dental, with its diversified portfolio—metal-free crowns, aligners and paediatric dental products—is well placed to ride this wave of transformation.
“Laxmi will capture a meaningful share of the pie,” says the brokerage, citing digitalisation, rising incomes and preference for aesthetics as growth drivers.
The Numbers
Nuvama’s numbers are clear:
- Revenue CAGR of 26% over FY25E–28E
- EBITDA CAGR of 48% aided by operating leverage and margin expansion
- Adjusted PAT CAGR of 59%
- Return on Capital Employed (RoCE) to improve from 19% to 29%
The valuation is at 40x FY27E PAT, which is 0.6x PEG and is attractive given the growth trajectory.
Laxmi Dental Post-IPO Performance
Laxmi Dental launched its IPO on 13 January 2025. The INR 698.06 crore issue was subscribed 113X and delivered a listing return of 28.63%. However, the post-listing performance of the stock was a roller coaster ride, and the stock sank to its low of INR 313.20 per share, reflecting a loss of 26%. Currently, it is trading around INR 447 per share, a premium of 4.43% from its IPO allotment price of INR 428 per share.
Laxmi Dental’s USP
Laxmi Dental is not just another player in the space—it’s the second largest domestic lab (68% of revenue) with a large network of 22,000+ dental professionals and is India’s largest dental export lab. In terms of revenue, it is 5x larger than the third-largest domestic competitor as per Nuvama.
This scale provides the company a strong moat and further enhanced by its backward integration and focus on digital dentistry. The iScan Pro scanner, a proprietary product, has reduced turnaround times and rework and logistics costs, contributing to margin expansion in the lab business, which is expected to continue.
Aligners and Kids-e-Dental
The aligners segment is nascent but moving fast. Laxmi’s ‘Illusion Aligners’, launched in 2021, is first Indian brand with USFDA 510(k) clearance and has an integrated supply chain through its arm Vedia Solutions. This has brought down the turnaround time from 4 weeks to 3 days. Nuvama expects 39% CAGR in aligners revenue from FY25-28.
And Kids-e-Dental, India’s only pediatric dental brand, is expected to more than double sales by FY28 with global expansion plans and partnerships in 81 countries.
Key Risks: Not Without a Cavity
Despite the positive outlook, Nuvama cautions investors on multiple fronts:
- Geographic concentration is a challenge
- Pending CBI case which can be a reputational risk
- Slow ramp-up in aligners, are still at an early adoption stage
- Overhang of stake sale by private equity fund OrbiMed which owns 22.4% in the company and can impact short-term stock performance
Also, some market participants feel valuations are already rich, especially when compared to peers like Poly Medicure and Chinese players like Angelalign, which trade at a premium due to size and track record.
Market Reaction: A Tentative Thumbs Up
After the initiation, Laxmi Dental’s share rose by 4.6% on the second consecutive day. On 26 March 2025, Laxmi Dental’s stock rose nearly 5% to INR 435 intraday. It is a sign that the market is warming up to the story. But the stock is still volatile, having fallen from INR 542 (listing day high) to INR 313 in February.
Verdict
Long Term Smile with Short Term Fillings, Nuvama’s coverage on Laxmi Dental is a sign that India’s dental wave is here, and Laxmi is getting ready. For investors with short-term volatility tolerance, this can be a long-term play.
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