Laxmi Dental stock jumps 5% after Nuvama initiates coverage with ’buy’ rating; sees 38% upside | Stock Market News

Shares of Laxmi Dental, the latest debutant on Dalal Street, jumped 5% in intraday trade on Wednesday, March 26, touching ₹435.25 apiece after domestic brokerage firm Nuvama Institutional Equities initiated coverage on the stock with a ‘buy’ rating and set a target price of ₹570 apiece, indicating a 38% upside from the stock’s previous closing price.

The brokerage believes Laxmi is well-positioned to capture a significant share due to its diverse portfolio, scale, and industry tailwinds, including a rising preference for aesthetics, digitalization, and increasing incomes.

Laxmi Dental is India’s only fully integrated dental products firm, offering customized crowns, bridges, aligner solutions, and pediatric products. It is the second-largest domestic lab (contributing 68% of revenue) with a 22,000-plus dental network and is the largest export lab in India.

India has a high oral disease burden but remains an underpenetrated and fragmented dental care market, with the organized sector holding only a single-digit market share.

The brokerage stated that metal-free crowns are gaining acceptance for their durability and aesthetic appeal, and Laxmi is capitalizing on this trend with its branded high-margin ‘Illusion Zirconia.’.

The aligners segment, which is witnessing rapid adoption, is expected to grow at a 39% CAGR over FY25E–28E, supported by industry tailwinds such as a greater focus on aesthetics, rising incomes, 510(k) clearance, and a sustainable B2B2C model with a ‘pay-as-you-go’ structure.

Kids-e-Dental is also a key growth driver for Laxmi, as it is the only Indian brand offering exclusive pediatric dental products. With plans to expand globally and ongoing product registrations, Nuvama expects Kids-e-Dental sales are projected to more than double over FY24–28E.

Laxmi recently raised ₹1.38 billion through its IPO in January 2025. The company plans to use these funds to repay borrowings ( ₹276 million) and support its capital expenditure plans ( ₹675 million over the next two years).

Nuvama projects Laxmi Dental’s revenue to grow at a 26% CAGR over FY25E–28E, while EBITDA is expected to expand at 48% CAGR, with margins improving from 12% in FY24 to 29% in FY28E, driven by operating leverage, digital initiatives, and a shift toward branded products.

As a result, Nuvama anticipates a nearly 4x surge in adjusted PAT, growing at 59% CAGR over FY25E–28E, aided by financial deleveraging.

Stock price trend

The stock made its market debut on January 20, 2025, listing at ₹542 per share on the NSE, marking a 26.64% premium over the issue price of ₹428. Despite a strong entry into the exchanges, the stock couldn’t sustain its momentum amid market volatility, leading it to quickly fall to ₹313 levels by the end of February.

Nevertheless, the stock regained momentum in the following sessions, surging 34% from last month’s lows. At current levels, it is trading around its issue price.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.