Laxmi Dental Stock Surges 5% as Nuvama Initiates ‘Buy’ Rating, Predicts 38% Upside
Laxmi Dental: Shares of Laxmi Dental surged 5% in intraday trading on Wednesday, reaching ₹435.25 after Nuvama Institutional Equities initiated coverage with a ‘buy’ rating. The brokerage firm has set a target price of ₹570, implying a significant 38% upside from the stock’s previous closing price.
Why is Laxmi Dental’s Stock Rising?
Laxmi Dental, India’s only fully integrated dental products company, has caught investor attention due to its strong market positioning and impressive growth potential. Nuvama’s bullish outlook stems from the company’s diverse product portfolio, a well-established distribution network, and favorable industry trends, including increasing demand for aesthetic dental solutions and digital dentistry.
The brokerage highlights Laxmi’s ability to tap into India’s growing but underpenetrated dental market. Currently, the organized dental sector holds only a single-digit market share, leaving ample room for expansion.
Key Growth Drivers for Laxmi Dental
1. Dominance in Metal-Free Crowns and Zirconia Products
Metal-free crowns are becoming increasingly popular due to their durability and superior aesthetics. Laxmi Dental is capitalizing on this trend through its premium, high-margin product ‘Illusion Zirconia,’ which is gaining significant traction.
2. Strong Position in the Fast-Growing Aligners Market
The clear aligners segment is one of the fastest-growing areas in dental care. Nuvama estimates the industry will expand at a 39% CAGR between FY25E–28E, driven by rising disposable incomes, increased awareness, and technological advancements. Laxmi’s B2B2C model and ‘pay-as-you-go’ structure make it well-positioned to benefit from this trend.
3. Expansion of Pediatric Dental Products – Kids-e-Dental
Laxmi Dental is the only Indian brand offering a dedicated range of pediatric dental products under ‘Kids-e-Dental.’ With increasing awareness of early dental care, this segment is expected to be a major revenue contributor in the coming years. Nuvama forecasts that Kids-e-Dental’s sales will more than double between FY24 and FY28E.
4. Financial Strength Post-IPO Fundraising
Laxmi Dental raised ₹1.38 billion through its IPO in January 2025. The company plans to use these funds strategically:
- ₹276 million to repay borrowings, reducing financial leverage
- ₹675 million for capital expenditure over the next two years, supporting expansion and innovation
Financial Growth Projections
Nuvama Institutional Equities expects Laxmi Dental’s revenue to grow at 26% CAGR over FY25E–28E, supported by strong demand across product segments. Meanwhile, EBITDA margins are projected to improve from 12% in FY24 to 29% in FY28E, driven by:
Higher operating leverage Digital adoption Increased share of premium branded products
Additionally, the company’s adjusted PAT is projected to surge nearly 4x, growing at a 59% CAGR over the same period.
Financial Ratios of Laxmi Dental
| Metric | FY24E | FY25E | FY28E (Projected) |
|---|---|---|---|
| Revenue Growth (CAGR) | – | 26% | 26% |
| EBITDA Margin | 12% | 18% | 29% |
| PAT Growth (CAGR) | – | 59% | 59% |
| Debt Repayment | – | ₹276 million | – |
| Capex Investment | – | ₹675 million | – |
Stock Performance and Market Sentiment
Laxmi Dental made a strong debut on January 20, 2025, listing at ₹542 per share on the NSE, marking a 26.64% premium over its issue price of ₹428. However, due to market volatility, the stock fell to ₹313 levels by February-end.
Since then, the stock has rebounded by 34%, trading near its IPO price. Analysts believe that with strong financials, industry tailwinds, and increasing institutional coverage, Laxmi Dental is well-positioned for long-term growth.
Conclusion
With Nuvama’s bullish stance, increasing adoption of premium dental solutions, and strong financial projections, Laxmi Dental’s future looks promising. Investors are likely to keep a close watch on the company’s execution of its growth plans and its ability to maintain profitability in a competitive market.
Q&A Section – Key Takeaways from the Article
1. Why did Laxmi Dental’s stock jump 5% today?
The stock surged after Nuvama Institutional Equities initiated coverage with a ‘buy’ rating and set a target price of ₹570, indicating a 38% upside from the previous close.
2. What makes Laxmi Dental an attractive investment?
Laxmi Dental is India’s only fully integrated dental products company, with a stronghold in metal-free crowns, clear aligners, and pediatric dental products. The company is expected to grow at a 26% CAGR over the next four years, driven by industry tailwinds and digital adoption.
3. What are the key growth segments for Laxmi Dental?
- Illusion Zirconia (metal-free crowns) – High-margin product gaining traction
- Aligners business – Estimated to grow at 39% CAGR between FY25E–28E
- Kids-e-Dental (pediatric dental care) – Expected to more than double in sales by FY28E
4. How has Laxmi Dental’s stock performed since its IPO?
- Listed at ₹542 on January 20, 2025 (26.64% premium over issue price of ₹428)
- Dropped to ₹313 by February-end due to market volatility
- Recovered by 34%, currently trading near IPO price
5. What is the future outlook for Laxmi Dental?
With expanding market share, strong revenue growth, and improving profit margins, Laxmi Dental is expected to see a nearly 4x increase in adjusted PAT over the next four years, making it a compelling long-term investment.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.