Laxmi Dental Gets Motilal Oswal's 'Buy' Initiation On A Strong Growth Trajectory

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Motilal Oswal Report

Anchored by its digital edge, premium product focus, and extensive distribution reach, Laxmi Dental Ltd. is well-positioned to achieve sustained growth and drive further margin expansion.

Accordingly, we estimate a revenue/Ebitda/PAT CAGR of 24%/48%/62% to Rs 3.7 billion /Rs 900 million/Rs 685 million during FY25-27.

Considering the supportive industry trend and Laxmi Dental’s potential for sustained growth, we assign a 43 times 12 months forward earnings multiple to arrive at our target price of Rs 540.

It is important to note that Laxmi Dental has no direct competitors in the listed space. The healthcare services sector is currently trading at an average 12M forward P/E multiple of 43-45x.

The company’s select focus on therapies, a customized and scalable business model, and strong growth momentum have led us to assign a similar multiple to Laxmi Dental.

We initiate coverage on the stock with a Buy rating. Our target price implies a 26% potential upside from current levels.

Key risks

1. Delay in receipt of approvals to launch/register products in international geographies may affect revenue prospects.

2. Slower adoption of technological development at the industry level may adversely affect the positioning of Laxmiden from a competition perspective.

3. A slower scale-up of dentist coverage would reduce the growth pace of its domestic lab business.

4. Better dental solutions substituting crowns/bridges may affect overall demand and, consequently, the business prospects of Laxmi Dental.

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