Laxmi Dental Q2 EBITDA margin rises to 19.2% as mix shifts

Laxmi Dental Limited raised its reported EBITDA margin to 19.2% in Q2FY27 from 15.3% a year earlier, as revenue reached Rs 79.52 crore and EBITDA increased 38.5% to Rs 15.27 crore. Laboratory and aligner sales grew while scanner sales fell 60.7% to Rs 3.5 crore.

What drove Laxmi Dental's Q2FY27 EBITDA margin increase?

Laxmi Dental's margin increase coincided with a shift toward core dental products, with gross profit rising 23.5% year on year to Rs 61.19 crore in Q2FY27 while revenue from operations increased 10.0% to Rs 79.52 crore. Gross margin expanded to 76.9% from 68.5%, and management attributed the overall improvement to product mix while saying laboratory and aligner gross margins remained stable.

Cost of goods sold fell to Rs 18.33 crore from Rs 22.74 crore despite the revenue increase, while employee cost rose to Rs 31.15 crore from Rs 25.77 crore. Management attributed the employee-cost increase to annual increments and additions in domestic sales, operations and the United States business. Other expenses were Rs 14.78 crore, down from Rs 15.92 crore in Q1FY27 but above Rs 12.74 crore a year earlier, reflecting business promotion, freight and artificial-intelligence-led automation spending.

How did Laxmi Dental's Q2FY27 profit compare with prior periods?

Laxmi Dental reported its highest quarterly revenue and EBITDA in Q2FY27, with EBITDA of Rs 15.27 crore and a 19.2% margin, unchanged from Q1FY27. Revenue increased 6.5% sequentially from Rs 74.70 crore in Q1FY27, while EBITDA rose 6.3% from Rs 14.36 crore.

Profit after tax, or PAT, after the share of profit or loss from joint ventures rose 17.6% year on year to Rs 10.04 crore, although it declined 2.7% from Rs 10.32 crore in Q1FY27. The year-on-year PAT margin increased to 12.6% from 11.8%, but was below 13.8% in the preceding quarter. Earnings before interest and tax, or EBIT, increased 25.6% year on year to Rs 12.13 crore, with its margin rising to 15.3% from 13.4%.

Which businesses offset Laxmi Dental's scanner-sales decline?

Laxmi Dental's laboratory and aligner businesses offset the scanner-sales decline, with laboratory offerings excluding scanners growing 22.7% year on year to Rs 50.20 crore and aligner solutions excluding scanners increasing 23.5% to Rs 24.70 crore. International laboratory revenue rose 32.0% to Rs 24.40 crore, faster than domestic laboratory growth of 15.0% to Rs 25.83 crore.

Within aligner solutions, Illusion Aligners revenue grew 27.7% to Rs 13.20 crore, while Taglus revenue rose 19.1% to Rs 11.51 crore. Kids-e-Dental revenue increased 16.7% to Rs 6.26 crore, but this jointly controlled entity is not consolidated into revenue under Indian Accounting Standards, or Ind AS.

Scanner sales were Rs 3.5 crore in Q2FY27, compared with Rs 8.9 crore in Q2FY26 and Rs 2.2 crore in Q1FY27. Management said sales were muted because of inflated prices for high-end laptops. In the segment presentation, laboratory scanner sales were Rs 3.61 crore while aligner scanner sales were negative Rs 11 lakh, producing the combined Rs 3.5 crore contribution.

How did Laxmi Dental's first-half earnings and cash flow change?

Laxmi Dental's H1FY27 revenue rose 11.9% to Rs 154.22 crore and EBITDA increased 29.2% to Rs 29.63 crore, taking the half-year EBITDA margin to 19.2% from 16.6% in H1FY26. Gross profit increased 22.8% to Rs 119.89 crore and gross margin expanded to 77.7% from 70.8%, extending the product-mix movement seen in the second quarter.

The company generated Rs 15.20 crore of net cash from operating activities in H1FY27, compared with an outflow of Rs 20.01 crore in H1FY26. Cash generated from operations was Rs 18.27 crore after a Rs 14.17 crore working-capital outflow, compared with negative Rs 15.97 crore in the prior half. Net cash used in investing activities narrowed to Rs 14.41 crore from Rs 65.08 crore.

At 30 September 2026, total assets were Rs 316.39 crore, up from Rs 293.97 crore at 31 March 2026, while total equity rose to Rs 265.72 crore from Rs 244.11 crore. Cash and cash equivalents were Rs 6.13 crore, down from Rs 8.40 crore at 31 March, after a Rs 2.46 crore net reduction in cash and cash equivalents during H1FY27.

What is Laxmi Dental planning after Q2FY27?

Laxmi Dental plans to deploy scanners through a subscription model as part of its digitalisation strategy, aiming to reduce dentists' upfront adoption costs and generate incremental business. The plan follows Q2FY27 scanner sales of Rs 3.5 crore, and management said it continues to evaluate its scanner roadmap in line with market conditions.

Shareholders approved the redeployment of Rs 48.1 crore of unutilised initial public offering proceeds during the quarter, including Rs 26.9 crore for land and building for a company-owned integrated dental laboratory and aligner facility. Management expects the facility to enhance efficiency, cost control and scalability, and said the transition will occur in phases to maintain service continuity without material impact.

Management cited strengthened on-ground leadership in the United States, participation at the upcoming International Dental Show and the India-European Union Free Trade Agreement concluded earlier in the year as factors expected to support international expansion. International laboratory revenue of Rs 24.40 crore in Q2FY27 was close to domestic laboratory revenue of Rs 25.83 crore after international business grew more than twice as fast year on year.

Conclusion

Laxmi Dental's Q2FY27 performance shows that laboratory and aligner expansion outweighed the decline in scanner sales. The resulting mix shift coincided with EBITDA margin rising 390 basis points year on year to 19.2% and EBITDA increasing 38.5% to Rs 15.27 crore, despite revenue growth of 10.0%.

The next disclosed execution points are the phased Rs 26.9 crore integrated-facility plan, the proposed scanner subscription model and the company’s scanner roadmap after Q2FY27 sales of Rs 3.5 crore. Management’s planned participation at the upcoming International Dental Show and its international expansion initiatives also remain relevant after overseas laboratory revenue grew 32.0% year on year.