Laxmi Dental shares up 2% as Motilal Oswal initiates coverage, sees 26% upside

Since listing in January, shares of the firm have slipped over 20 percent on the bourses.

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Recently listed Laxmi Dental Ltd shares rallied over two percent in early trade on Monday, July 14, after domestic brokerage Motilal Oswal initiated coverage with a 'bullish' buy rating.

Laxmi Dental is distinguished as India’s only fully integrated provider of dental solutions, led by a highly experienced management team with extensive expertise in the field, noted the brokerage. The brokerage assigned a price target of Rs 540 per share, indicating an upside of 26 percent from current levels.

"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 12-month 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," said the brokerage.

The firm's business encompasses three high-growth pillars: custom labs (crowns and bridges), aligner solutions (clear aligners, thermoforming sheets, and resins), and pediatric dental products (Bioflex zirconia crowns and SDF), all of which are experiencing strong momentum.

"Anchored by its digital edge, premium product focus, and extensive distribution reach, Laxmi Dental is well-positioned to achieve sustained growth and drive further margin expansion. Accordingly, we estimate a revenue/EBITDA/PAT CAGR of 24 percent/48 percent/62 percent during FY25-27," said the brokerage.

Further, the brokerage added that the industry is experiencing strong tailwinds driven by a highly fragmented market, a shift towards premium metal-free products, growing adoption of digital dentistry, a shift towards organized labs, and an increasing trend of outsourcing by the US labs to India.

At 10.25 a.m., the firm's stock was quoting Rs 439.05 on the NSE, higher by 2.3 percent compared to the previous session's closing price.

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