Laxmi Dental Ltd Management Discussions

GLOBAL ECONOMY

Global economic activity remained resilient in 2024, demonstrating moderate growth despite facing several headwinds. The IMF estimates global growth at 3.3% in 2024, with projections of 3.0% in 2025 and 3.1% in 2026. This reflects an overall steady growth outlook, even with a fragile global environment, shaped by persistent geopolitical tensions, including the Russia- Ukraine war and conflicts in the Middle East, along with uncertainties in trade policy, lingering inflation, and continued supply chain realignments across key sectors. Investor confidence remained subdued and market volatility heightened, particularly across major economies such as the US, China, and parts of Europe. The situation was further compounded by tighter financial conditions and the introduction of new US tariffs in April 2025, which included a 10% duty on all imports. However, later that month, the US administration announced a 90-day suspension on the increased tariffs. This pause was originally set to expire in July 2025 but was later extended to August 1, 2025. The US government also warned that countries failing to reach trade agreements by then would face the higher tariff rates announced earlier.

Global Growth Projections (2023- 2026)

INDIAN ECONOMY

Indias economy in 2025 stands out as a major driver of global growth, achieving real GDP growth of 6.5% despite an uncertain global economy. This growth is fueled by strong domestic demand and increased investment from both private and public sectors. Higher disposable incomes have boosted consumption, while prudent macroeconomic policies, particularly the RBIs calibrated monetary stance, have supported credit growth and maintained price stability. Private consumption remains a key driver of growth, with Private Final Consumption Expenditure (PFCE) expected to grow by 7.30% in 2024-25, up from 4% in 2023-24.

Growth is broad-based across sectors, with the services sector leading at an estimated 7.2% real GVA growth, making up about 55% of total Gross Value Added. The manufacturing sector has gained momentum, growing by around 6.3%, backed by a strong Purchasing Managers Index (PMI) and investments under PLI schemes. Agriculture demonstrated resilience, recovering to 3.8% growth due to favorable monsoons and a bountiful Kharif season.

Inflation has eased significantly, with consumer price inflation dropping to 2.82% in May, which has helped boost consumer and business confidence. Capital markets are active, with record IPO activity and growing retail participation. Exports

have reached a record high of US$ 824.9 Billion, showcasing strength in both services and high-value manufacturing. Foreign direct investment continues to rise, and foreign exchange reserves have reached an unprecedented US$

697.9 Billion, giving the country ample resilience against external shocks. Overall, Indias economic fundamentals remain sound, positioning it well for continued leadership and growth in the global economy.

Medical Hospitals Diagnostics Pharmaceuticals Devices

in chronic and lifestyle-related diseases. There is a growing emphasis on preventive care, supported by public health campaigns and rising health awareness. Technological advancements like digital diagnostics, telehealth, and minimally invasive procedures are helping improve access and health outcomes. In India, these global trends are reflected in wider healthcare reach, growing insurance coverage, higher disposable incomes, and strong policy support, driving strong growth in both general and specialized healthcare segments.

Between 2016 and 2025, the Indian healthcare market expanded at a CAGR of 22% and is expected to reach US$ 636 Billion by 2025. Hospitals lead this growth, followed by pharmaceuticals, medical devices, and diagnostics. Among these, medical devices are forecasted to grow the fastest from 2022 to 2030, at a CAGR of 20.4%, followed by hospitals at 18.2%, diagnostics at 13.0%, and pharmaceuticals at 12.2%.

(Source: Independent Market Report on Global and Indian Dental Labs and Branded Products, Frost & Sullivan, December 2024)

Medical Devices Industry

The medical devices industry is one of the fastest-growing segments in Indias healthcare sector. It includes equipment and electronics, disposable and consumable items, IVD equipment and reagents, implants, surgical instruments, and other specialized devices. India is ranked among the top 20 medical device markets worldwide. The industry is expected to grow from an estimated US$ 15.4 Billion in 2022 to US$ 50.0 Billion by 2030, registering a CAGR of 20.4%. By 2030, it is projected to account for 1.65% of the global medical device market. This growth is driven by the rapid adoption of technologies such as digital imaging, diagnostics and minimally invasive tools, along with strong government support through programs like Make in India and PLI schemes.

As the overall Indian medical devices market witnesses rapid expansion, dental devices are also playing a significant role in this progress. With the dental care sector evolving, rising demand for preventive, restorative, and cosmetic treatments is driving the adoption of advanced tools such as intraoral scanners, CAD/CAM systems, implant kits, and orthodontic solutions. Backed by digital innovation, growing insurance coverage, and heightened patient awareness, the dental medical device sector is set to grow alongside the wider healthcare and dental care markets in India.

(Source: Independent Market Report on Global and Indian Dental Labs and Branded Products, Frost & Sullivan, December 2024).

Dental Products and Services Industry

The dental care market includes two main parts: dental products and treatment services. Dental products comprises of dental devices, diagnostic equipment, consumables, and related tools. Treatment services cover specialized areas like prosthodontics, orthodontics, periodontics, and endodontics

The India dental care services market was valued at US$ 3.4 Billion in 2023 and is projected to grow at a CAGR of 12.6%, reaching US$ 7.8 Billion by 2030. This growth is underpinned by a confluence of factors reshaping the countrys oral healthcare landscape. The rising incidence of oral diseases such as caries, malocclusion, and periodontitis is intensifying the need for preventive and restorative dental solutions. At the same time, growing awareness of oral health and a surge in demand for aesthetic enhancements, such as teeth whitening, invisible aligners, and digital smile design, are reshaping patient expectations. These trends are further amplified by Indias shifting demographics, with the proportion of the population over 65 expected to rise from 10.5% in 2022 to 20.8% by 2050. As life expectancy increases, so does the demand for procedures like dental implants, prosthodontics, and other restorative treatments that maintain oral function and quality of life in later years. Supporting this momentum are rising disposable incomes and the gradual expansion of dental insurance, all of which are driving uptake of both general and specialized dental care services.

Despite these structural drivers, healthcare expenditure in India remains low, with per capita dental healthcare spending at just US$ 0.05, significantly lower than in countries like the US, Germany, and China. As a result, the dental care market remains markedly underpenetrated, presenting considerable scope for long-term growth. As a key player in this segment, Laxmi Dental is well positioned to capitalize on these opportunities and expand in line with the sectors evolution.

Dental Laboratory Market

With rising life expectancy and growing awareness of oral health, dental laboratories have become integral to providing high-quality, customized restorative and cosmetic solutions. To meet evolving patient expectations and clinical demands, dental labs are undergoing a transformation marked by a shift toward digitalization and patient-centric care.

Key trends shaping the dental laboratory industry include enhancing quality, lowering labor costs, and faster turnaround times, which are driving rapid adoption of digital workflows. Technologies like Cone Beam Computed Tomography (CBCT) intraoral scanners, CAD/CAM systems, and 3D printing are transforming treatment planning and prosthesis manufacturing. At the same time, crowns made from zirconia and second-generation polymers are gaining traction due to aesthetic preferences, concerns over metal sensitivities, and bite-related considerations.

Another emerging trend is the outsourcing of dental lab services from developed markets such as the US and the UK to countries such as India, South Korea, China, Thailand, and Vietnam. This shift is driven by shortages of skilled dental technicians overseas, cost competitiveness, and the need to integrate digital workflows. India has emerged as a preferred destination, offering a skilled workforce, advanced technology, and adherence to global quality standards like ANSI53 and ISO54, while complying with regulatory requirements like those of the FDA. Supporting this momentum, Indias exports of artificial dental teeth and fittings rose from US$ 6.9 Million in 2018 to US$ 13.2 Million in 2023, clocking in a CAGR of 14.0%. Additionally, other major export destinations include Italy, Hong Kong, and the UAE.

Collectively, these trends are reshaping the dental laboratory landscape, positioning India as a competitive global hub for high-quality, technology-driven dental solutions, an evolution in which Laxmi Dental continues to play a pivotal role through its focus on innovation, quality, and adherence to global standards.

COMPANY OVERVIEW

Laxmi Dental Limited (also referred to as Laxmi Dental or The Company) has been a key player in shaping Indias dental landscape since 2004. The Company started with traditional dental exports and has grown into the nations only fully integrated dental products company. With operations in over 300 cities across India and a global presence in 95+ countries, the Company serves more than 22,000 dental clinics, dental companies and dentists.

Laxmi Dentals manufacturing strength comes from six fully operational facilities in Maharashtra and Kerala, along with five specialized finishing and polishing units located across India. The Company is vertically integrated through Vedia Solutions, its in-house manufacturer of machines and raw materials, which supports both internal operations and external market needs. Driven by innovation, scale, and strong customer relationships, Laxmi Dental continues to strengthen its leadership in the rapidly evolving dental care industry, globally.

PRODUCT PORTFOLIO

Laboratory Offerings

The Dental Laboratory Products segment is the core of Laxmi Dentals business, contributing 62% of total revenue. It focuses on fully customized prosthetics like crowns, bridges, and other restorative solutions, all tailored to match each patients unique anatomy and aesthetics. The portfolio is led by zirconia-based crowns, known for their durability, biocompatibility, and aesthetic appeal compared to traditional materials.

Key products:

Custom-made Crowns

Bridges

Prosthetics

Digital Solutions

This segment comprises of domestic laboratory offerings contributing more than 36% of operating revenue and international laboratory offerings contributing more than 25% of operating revenue.

Aligner Solutions

The Aligner Solutions segment contributes 32% of revenue and is a fast-growing vertical of Laxmi Dentals business. It is powered by Bizdent Devices, which offers 100% customized, finished aligners, tailored to patient

measurements and treatment plans and Vedia Solutions, which handles backward integration by manufacturing standard non-customized products such as thermoforming sheets, 3D printing resins, and dental-grade machines, for in-house use and global exports.

Key products:

Clear Aligners

Aligner Manufacturing Materials

Equipment and Machinery

Other Business

This segment comprises dental distribution products used in Dental Laboratory, Dental Clinical Services and Dental educational courses. This segment contributes 6% of total revenue.

Pediatric Dental Products

Laxmi Dentals Pediatric Dental Products segment operates through jointly controlled entity named Kids-e-Dental LLP, in which the Company holds a 60% ownership stake. The segment addresses the rising need for child-specific solutions such as milk teeth crowns, zirconia caps, SDF treatments, sealants, and space maintainers. This JV leverages Laxmi Dentals robust manufacturing and quality systems, paired with Kids-e-Dentals pediatric expertise. With US FDA clearance in place, the venture stands out as one of the few Indian players meeting top-tier international regulatory standards in this niche space.

Key products:

Pre-formed Pediatric Crowns

Dental Treatment Solutions

Specialized Products

FINANCIAL PERFORMANCE

Laxmi Dental delivered a strong financial performance in 2024-25. The Company achieved a revenue growth of 23.5% year-over-year, with revenue from operations reaching INR 2,391.1 Million in 2024-25, up from INR 1,935.6 Million in 2023-24.

EBITDA increased to INR 418.7 Million in 2024-25 from INR

237.9 Million in the previous year, with an EBITDA margin of 17.5%. Adjusted EBITDA for 2024-25 increased to INR 516 Million, from INR 326.8 Million, marking a 57.9% year-over- year rise. PAT rose to INR 318.3 Million in 2024-25, resulting in a PAT margin of 13.3%. This strong performance was driven by growth across all business segments.

Key Financial Ratios

Ratios	2024- 25	2023- 24	Variance	Explanations for significant changes with variation more than 25%
Debtors\u2019 Turnover Ratio (Times)	7.77	8.54	(9.08%)	Not Applicable (variation less than 25%)
Inventory Turnover Ratio (Times)	0.92	0.08	990.38%	In 2024-25, normalized COGS and lower inventory improved inventory turnover.
Interest Coverage Ratio (Times)	5.60	2.74	104.38%	Higher operating earnings and almost flat finance cost led to better ability to cover interest.
Current Ratio (x)	3.30	0.96	245.15%	Increase in current assets (especially cash and cash equivalents: INR 908.18 Million in 2024-25 compared to INR 6.98 Million in 2023-24 is primarily due to proceeds from the issue of shares). Simultaneously, current liabilities decreased (notably borrowings fell from INR 268.85 Million in 2024-25 to INR 7.58 Million in 2023- 24), improving liquidity position.
Debt-Equity Ratio (x)	0.05	0.94	(94.22%)	Reduction in total debt (INR 113.67 Million in 2024-25 compared to INR 420.25 Million in 2023-24) and an increase in equity (INR 2,087.05 Million in 2024-25 compared to INR 445.71 Million in 2023-24) due to fresh capital infusion and retained earnings. Indicates significant deleveraging.
Operating Profit Margin (%)	11.23%	6.12%	83.50%	Revenue growth of ~23% coupled with lower material cost and operating leverage drove margin expansion. (Operating Profit is taken as EBIT less Other Income)
Net Profit Margin (%)	13.31%	13.03%	2.14%	Not Applicable (variation less than 25%)
Return on Net Worth (%)	25.14%	78.78%	(68.09%)	Equity increased by over 3.95 times primarily because of equity infusion.
Return on Capital Employed (%)	16.91%	15.56%	8.67%	Not Applicable (variation less than 25%)
Basic Earnings per Share (EPS) (INR)	6.07	4.80	26.43%	Driven by stronger continuing operations, exceptional gain, and reduced discontinued losses.

Details of KPIs for the financial years ended March 31, 2025 and March 31, 2024:

Sr. No. Particulars	Unit	As at and for the
		Financial Years ended March 31,
		2025	2024
Financial
1. Net Revenue
(a) Laboratory business
(i) Domestic (1)	INR Million	880.74	804.09
(ii) Domestic	% of Revenue from sale of goods and services	36.83%	42.00%
(iii) International (2)	INR Million	607.11	435.50
(iv) International	% of Revenue from sale of goods and services	25.39%	22.75%

Sr. No. Particulars	Unit	As at and for the
		Financial Years ended March 31,
		2025	2024
(b) Aligners
(i) Bizdent (3)	INR Million	474.07	357.29
(ii) Bizdent	% of Revenue from sale of goods and services	19.83%	18.66%
(iii) Vedia (4)	INR Million	289.00	181.15
(iv) Vedia	% of Revenue from sale of goods and services	12.09%	9.46%
(c) Paediatric
(i) Kids-e- Dental (5)	INR Million	262.68	266.71
(ii) Kids-e- Dental	% of Revenue from Paediatr ic operatio n	100.00%	100.00%
(d) Others (6)	INR Million	140.15	136.47
(i) Others	% of Revenue from sale of goods and services	5.86%	7.13%
2. Revenue from Operations (7)	INR Million	2391.07	1,935.55
3. EBITDA (8)	INR Million	418.72	237.90
(i) EBITDA	% of Revenue from Operation	17.51%	12.29%
4. Adjusted EBITDA (9)	INR Million	516.08	326.78
(i) Adjusted EBITDA	% of Revenue from Operation	21.58%	16.88%
5. PBT(10)	INR Million	318.29	85.24
(i) PBT	% of Revenue from Operation	13.31%	4.40%
6. PAT(11)	INR Million	318.34	252.29
(i) PAT	% of Revenue from Operation	13.31%	13.03%
7. PAT Margin (12)	%	13.31%	13.03%
8. Return on Capital Employed (13)	%	43.26%	19.97%
9. Return on Equity (14)	%	25.14%	78.78%
10. Asset Turnover (15)	%	114.08%	167.54%
Operational
6. Domestic lab
(a) Total units (16)	Number	5,76,994	452,330
(b) Digital units (17)	Number	3,69,107	219,887
(c) Digital units penetration (18)	%	63.97%	48.61%
(d) Product categories (volume)
(i) Metal- free (19)	Number	2,55,550	186,958
(ii) Metal-free revenue share (20)	%	55.85%	53.70%

Sr. No. Particulars	Unit	As at and for the
		Financial Years ended March 31,
		2025	2024
7. International Lab
(a) Total units (21)	Number	2,96,936	198,920
(b) Digital units (22)	Number	1,87,679	110,360
(c) Digital units penetration (23)	%	63.21%	55.48%
(d) Product Categories (Volume)
(i) Metal- free (24)	Number	72,750	54,874
(ii) Metal-free revenue share (25)	%	33.45%	36.31%
8. Aligners & Allied Products
(a) Total aligner cases (26)	Number	22,678	17,978
(b) Customers served	Number	5,879	4,986
(i) Tier I (27)	%	54.72%	47.09%
(ii) Tier II (27)	%	33.93%	35.58%
(iii) Tier III (27)	%	11.35%	17.33%
9. Kids-e- Dental
(a) Total units (28)	Number	5,56,212	5,38,638
(b) Revenue share (geography)
(i) Domestic (29)	%	26.05%	24.16%
(ii) International (30)	%	73.95%	75.84%
10. Consolidated
(a) Number of employees (31)	Number	2,390	2,299
(b) Branded sales as a percentage of revenue from operations (32)	%	40.73%	38.28%

*Not annualized

Notes:

Net revenue for domestic laboratory business refer to revenue from dental lab catering to the Indian market.

Net revenue for international laboratory business refers to dental lab catering to international markets.

Net revenue for Aligners from Bizdent refers to revenue from aligners sold by Bizdent Devices Private Limited.

Net revenue for Aligners from Vedia refers to revenue from other aligner related products sold by Vedia Solutions ?€“ a division of Laxmi Dental Limited.

Net revenue for pediatric division from Kids-E refers to revenue of jointly controlled entity Kids-E Dental LLP.

Other net revenue refers to other diversified revenue of the Company and its Subsidiaries.

Revenue from operations is total revenue generated by the Company from the sales and services and other operating income.

EBITDA refers to earnings before interest, tax, depreciation and amortization and is calculated as profit before income tax and exceptional items added with finance cost, depreciation, and amortization, and deducted by other income.

Adjusted EBITDA is calculated by adjusting EBIDTA for share of profit/(loss) of Jointly Controlled entity Kids-e dental LLP, ESOP expenses (non-cash in nature) and

+ IDS event expenses (once in every 2 year). ESOP and IDS expenses were not present in 2023-24.

PBT (Profit/(loss) before tax) is calculated as total income minus total expenses minus exceptional items of the Company for the year.

PAT (Profit for the year) means the profit for the year as appearing in the Financial Statement.

PAT Margin is calculated as profit for the year divided by Revenue from Operations.

Return on capital employed is calculated as EBIT divided by average capital employed where EBIT is calculated as sum of profit before tax, and finance costs; and average capital employed is calculated as average of the opening capital employed and closing capital employed; capital employed is calculated as sum of total Equity and net debt; net debt is calculated as total borrowings less cash and cash equivalents and other bank balances.

Return on equity is calculated as net profit after tax divided by average total equity (net worth).

Asset Turnover Ratio is calculated as revenue from operations divided by average total assets.

Total units of domestic lab refer to number of units sold by domestic lab where domestic labs refer to dental lab catering to the Indian market.

Digital units of domestic lab refer to number of units sold by domestic lab from digital impressions.

Digital units penetration for domestic lab is computed as digital units sold by domestic lab divided by total units sold by domestic lab; where digital units of

domestic lab refer to number of units sold by domestic lab from digital impressions.

Metal free units of domestic lab refer to number of units sold by domestic lab of zirconia, lithium disilicate and other metal free materials.

Metal free revenue share for domestic lab is calculated as revenue from metal free units divided by total revenue from domestic lab.

Total units of international lab refer to number of units sold by international lab where international lab refers to dental lab catering to international markets.

Digital units of international lab refer to number of units sold by international lab from digital impressions.

Digital units penetration for international lab is computed as digital units sold by international lab divided by the total units sold by international lab, where digital units of international lab refer to number of units sold by international lab from digital impressions.

Metal free units of international lab refer to number of units sold by international lab of zirconia, lithium disilicate and other metal free materials.

Metal free revenue share for international lab is computed as revenue from metal free units divided by total revenue from international lab.

Total aligner cases refer to total number of cases of aligners sold by Subsidiary, Bizdent Devices Private Limited.

Customers served refer to total dental clinics, dental companies and dentists served by Subsidiary, Bizdent Devices Private Limited. This represents locations of customers served by the Subsidiary, Bizdent Devices Private Limited across tier I,II and III cities Classification of Tiers as per Ministry of Finance (Government of India) HRA classification of X ?€“ Tier 1 (Population of 50 Lakh and above), Y ?€“ Tier 2 (Population of 5 to 50 Lakh) and Z ?€“ Tier 3 (Population below 5 Lakh) ?€“ Notification No. 2/5/17-E II(B), 7 th July 2017.

Kids-E refers to paediatric dental products business through our Jointly Controlled Entity, Kids-e-Dental LLP. Total units for Kids-E refers to number of units sold by Kids-E Dental LLP

Domestic revenue share for Kids-E refers to number of units sold in India market by Kids-E Dental LLP.

International revenue share for Kids-E refers to number of units sold in international market by Kids-E Dental LLP.

Number of employees means the number of employees of the Company as on March 31 of the respective Fiscal year.

Branded Sales as a percentage of revenue from operations is computed as revenue from sale of own brand products divided by total revenue from operations. Represents revenue from operations derived from sale of branded dental products, that is Illusion Zirconia, Illusion Aligners, and Taglus. In addition, Kids-e-Dental LLP also generated a revenue from operations of INR 262.68 Million and INR 266.71 Million in Fiscals 2025 & 2024 respectively.

RISK MANAGEMENT

Effective risk management is crucial for ensuring business continuity, protecting reputation, and retaining client trust. Given the complexities of raw material sourcing, regulatory compliance, quality assurance, global supply chain dependencies, and precision-driven manufacturing processes, the Company faces a range of financial, operational, and reputational risks. To manage these, the Company follows a structured risk framework that allows it to proactively identify, assess, and respond to risks, while staying agile in handling new and emerging challenges.

Type of Risk	Description	Mitigation Strategies
Financial Risk	Includes liquidity, interest rate, credit, and contingent liability exposure.	Maintain sufficient cash for operations Ensure a mix of fixed and floating rate borrowings Periodically assess customer creditworthiness Use an Expected Credit Loss (ECL) provisioning matrix Adopt a conservative approach to contingent liabilities
Dependence on Dental Network	Growth relies on onboarding and retaining dental partners.	Invest in sales and marketing Focus on digital penetration and increasing wallet share
Regulatory Compliance	Compliance with Indian and international standards like FDA, ISO and CDSCO.	Engage expert advisors Ensure timely renewal of licenses Maintain multiple certifications, including ISO and US FDA
Supply Chain and Pricing Pressure	Dependence on raw materials and absence of long-term orders.	Diversify vendor base Avoid concentration with related party suppliers
Manufacturing Concentration	Geographic risks due to clustered plants around Mumbai.	Implement disaster recovery plans Evaluate location diversification opportunities over time
Competitive Risk	Intense industry competition and pricing pressures.	Offer differentiated services Focus on building dentist loyalty Invest in branding

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Laxmi Dental maintained a strong emphasis on peoples development, recognizing that the workforce is vital to long-term success. Throughout the year, the Company launched initiatives focused on upskilling employees, encouraging teamwork and fostering a culture of growth and inclusion. These efforts contributed to higher morale, improved team dynamics, and greater organizational alignment. Industrial relations remained positive and stable, reflecting a workplace built on mutual respect, open communication, and sustained employee engagement.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Laxmi Dental has established a robust internal control framework tailored to its operations. These controls are designed to ensure product quality, regulatory compliance (particularly in health and safety standards), operational efficiency, and the integrity of financial reporting. Systems are in place to monitor procurement, production, inventory management, and distribution, with regular checks to mitigate risks and ensure adherence to applicable standards. An independent internal audit team periodically evaluates the effectiveness of these controls, with key observations reviewed by the Audit Committee. Based on the assessments conducted during the year, the Board is of

the view that the internal control systems are adequate and operating effectively, in line with the scale and nature of the Companys activities.

CAUTIONARY STATEMENT

This Management Discussion and Analysis may include forward-looking statements that reflect the Companys current views on future performance, strategic intentions, or anticipated developments. These statements are based on reasonable assumptions; however, actual outcomes may vary significantly due to various internal and external factors beyond the Companys control. Readers are advised to consider these statements with the inherent uncertainties in mind.