Laxmi Dental (LAXMIDENTL)

FairStock Score: 27/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Very low debt/equity of 0.04 provides balance sheet comfort
• ROCE of 19.20% shows efficient use of capital
• Profit growth of 22.29% outpacing sales growth of 7.09% indicates operating leverage
• Piotroski F-score of 7/9 suggests basic financial health is sound

Concerns

• P/E of 39.45 and P/B of 4.54 are rich for just 7.09% sales growth
• Latest quarter net profit of ₹2 Cr on sales of ₹66 Cr implies very thin net margin
• Zero dividend and promoter holding of 41.70% leave minority shareholders with little cushion
• FairStock score of 21/100 flags the stock as risky

AI Analysis

At ₹194.10, Laxmi Dental asks me to pay ₹1,058 crore for a business whose latest quarter produced just ₹2 crore in net profit. That arithmetic does not excite me. Graham taught me to invest on facts, not on hopes. The balance sheet is clean: debt/equity of 0.04 and ROCE of 19.20% show sensible capital deployment. A Piotroski score of 7/9 also tells me the financial position is not deteriorating. But the price-to-earnings ratio stands at 39.45 while sales grew only 7.09%. The 22.29% profit growth looks nice, but it starts from a small base; the latest quarter's net margin is barely 3%. I cannot call that a durable moat. Dental supplies may be a decent niche, but with promoter holding at 41.70%, outside shareholders depend on insiders, and with zero dividend, the only return is price appreciation. Mr. Market has been emotional, swinging from ₹382.75 to ₹155.88 in a year, and now ₹194.10 still gives me no margin of safety. The PEG ratio of 2.69 says I am paying almost three times the earnings growth rate. FairStock scores it 21 out of 100, and I agree with the warning. If I were buying the whole company privately, would I pay 39 times earnings for a business growing sales at 7%? No. I would wait. Let earnings catch up to the price, or better, let the price fall to a level where the downside is limited. A clean balance sheet is good, but a good business at a fair price is not enough; I want a wonderful business at an attractive price. Today Laxmi Dental is neither clear enough nor cheap enough for my circle of competence.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer