Prevest Denpro Limited (543363) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Thank you for joining Prevest Denpro Limited FY '26 Earnings Conference Call. Joining us today from the management team are Mrs. Namrata Modi, Whole-time Director and CFO; Dr. Sai Kalyan, Director of Research at mix; Mr. Vaibhav Munjal, Chief Marketing Officer; and Mr. Vinay Jamwal, Financial Adviser. We will commence the call with the opening thoughts from the management, post which we will be open forum for Q&A where management will be glad to respond to any queries that you all may have. Before we go on the main call, I would like to read the standard disclaimer. There will be forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company's management as on date of this call. The company does not assume any obligation to update their forward-looking statements if those beliefs, opinions, expectations or circumstances should change. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. Consequently, a listeners should not place any undue reliance on forward-looking statements. [Operator Instructions] Please note that this conference is being recorded. I would like to hand the conference over to Mrs. Namrata Modi to come in and share our thoughts on financial performance and strategic progress made by the company. Thank you, and over to you, ma'am.

Thank you. Good evening, distinguished investors and stakeholders. Thank you for joining us and for your continued confidence in the company. We apologize for the canceled earnings call on second June due to an unexpected medical emergency involving our Chairman, Mr. Atul Modi. He is recovering well and is expected to resume duties very soon. In his absence, I will chair today's meeting, present our update and address the questions. Thank you for your understanding and support. I would like to take this opportunity to present an overview of our performance for the financial year 2025, '26. Financial year 2025, '26 for the year of steady growth, disciplined execution and continued strategic progress. The global business environment remained challenging throughout the year, with reflated development geopolitical tensions and ongoing contracts destructing internet rate, logistics and customer ordering patterns. Despite these headwinds, our company delivered healthy growth while continuing to strengthen its long-term growth platform. Our business continued to benefit from balanced growth across both domestic and international market. The domestic business maintained a stable performance with growth of 9%. While our export visions recorded a growth of 17.58% during the year. This achievement reflects the strength of our product portfolio, deep customer relationship and our ability to successfully navigate to complex global environment. As several international markets gradually stabilized during the year, we witnessed improving demand across key export geographic, providing renewed momentum to our over. Another important initiative during the year was establishment of our only owned subsidiary in the UAE. This investment represents a significant step in strengthening our presence there and enhancing our ability to serve customers across the region more effectively. While the commencement of commercial operations was delayed due to geopolitical tensions and conflict in the Middle East which impacted overall business activity, the underlying market opportunity remains strong. As the digital situation continues to stabilize, we expect to gradually commence operations and are confident that the UAE subsidiary will play an important tool in expanding our international footprint and contributing to our long-term growth in the coming years. During this year, we started commercialization of our is impact and business this mark the beginning of new verticals that aligns well with the rising demand for hydro-driven products in the dental and medical setting. The initial response from customers has been highly encouraging, validating both the market needs and the tenth of our product offering. We believe these business have significant long-term growth political and potential, and we will continue to embed in expanding its reach and product portfolio in a disciplined and phased manner over the coming years. Innovation continues to remain at the core of our growth strategy. Digital Dentistry is 1 of our highest priority business segment. And during the year, we continued to expand our capabilities beyond our established 3D printing materials portfolio. We have made significant progress in developing next-generation digital solutions including 3D printer to a combination of in-house research and development and strategic collaborations with leading global technology partners. The market response further strengthened our confidence that digital dentistry will emerge as a significant growth driver for a company over the coming years. Alongside innovation, operational excellence remains a key focus area through continuous improvement in manufacturing processes, higher capacity utilization, supply chain optimization and disciplined cost management, we successfully mitigated inflationary pressures while maintaining healthy profitability. These initiatives have further strengthened our operational foundation and enhance our ability to deliver sustainable long-term growth. Let me now turn to our financial performance. Revenue from operation increased by 13.9% to INR 71.81 crores compared with INR 63.03 crores in financial year 2024, '25. Total income grew by 14.4% to INR 76.72 crores, reflecting broad-based growth across our business segments. Our profitability remained strong throughout the year. EBITDA increased by 13.3% to INR 29.62 crores, profit before tax grew by 13.9% to INR 27.61 crores and profit pretax increased by 12.9% to INR 20.49 crores. The company maintained healthy profitability with an EBITDA margin of 38.6%, a PBT margin of 36.05% and a tax margin of 26.7%, while margin moderated marginally compared with the previous year, this continued to remain among the strong, reflecting our disciplined approach towards the cost management and operational efficiency. Fourth quarter 2025, '26. The fourth quarter was relatively more challenging from a revenue perspective due to high geopolitical tensions war related development and disruption in global shipping and supply chain which affected customers' ordering patterns and export dispatches. Despite these external challenges, our business continued to demonstrate resilience. Revenue from operations increased by 2.63% to INR 18.94 crores, while total income grew by 4.18% INR 20.35 crores. Importantly, profitability grow significantly outpaced revenue growth. EBITDA increased by 9.09% to INR 8.32 crores. Profit before tax grew by 9.21% to INR 7.81 crores and profit after tax increased by 13.23% to INR 5.82 crores. Our focus on operational efficiency resulted in further improvement in margins during the quarter. EBITDA margin improved to 40.87% PBT margin to 38.38% and PAT margin 23.61%, demonstrating our ability to protect profitability even under difficult market condition. Looking ahead, we remain optimistic about the opportunities before us while continuing to remain prudent in light of global uncertainty. We will continue strengthening our leadership in digital and testing through investment in advanced digital solution and research and development. We will further expand our presence in U.S. market through continue scaling the Orad Oral Care business, build our base impacting portfolio into meaningful patient vertical. We pin our export presence by entering new international markets and continue investing in next-generation dental materials and digital technologies. The domestic market continues to offer significant long-term growth potential supported by increasing oral health care awareness, driving health care expenditure expanding access to quality dental care and the growing adoption of advanced dental technology, committed to strengthening our presence in the domestic market through product innovation, deepen customer engagement and the introduction of technologically advanced solutions. At the same time, we will maintain our focus on operational excellence productivity improvement, disciplined capital allocation and sustainable profitability. That strong performance delivered during financial year 2025, '26 provide us with a solid foundation for future growth with a resilient business model, healthy financial position, expanding product portfolio and clear strategic direction. We remain confident in our ability to create sustainable long-term value for our shareholders and all stakeholders. Thank you. Over to Mr. Vaibhav Munjal.

Good afternoon, everyone. It gives me great pleasure to present an overview of our business performance for the financial year ended 31st March 2026. The year was 1 of resilience disciplined execution and steady progress. Despite operating in a challenging business environment, influenced by global and domestic geopolitical uncertainties and prices, our team remain focused on execution and customer engagement. I'm pleased to share that our overall sales grew by 13.89% on a year-on-year basis. Our domestic business registered a healthy growth of 9%, while exports continued to perform strongly with the 17.58% increase reflecting the growing acceptance of our products across international markets. These results demonstrate the resilience of our business model and the strength of our brand as we continue to grow despite an uncertain global environment. The second half of the financial year further reinforced our got momentum in both domestic and export. So compared with the second half of the previous financial year, our overall sales grew by 12.06% with the domestic sales increasing by 12.72% and export by 11.66%. Compared to the first half of the financial year, the second half delivered an overall growth of 8.49% driven by a strong 16.19% increase in domestic sales and 3.56% growth in core. These numbers reflect improving market traction and the effectiveness of our focused commercial strategy. Throughout the year, we strengthened our distribution network, expanded customer engagement and enhanced our field presence across key markets. through disciplined cost management, efficient working capital utilization and consistent market execution, we successfully maintained business continuity while delivering sustainable growth. While India remains a primary growth engine, our international presence provides diversification and keeps us aligned with the evolving growth and keeps us aligned with the evolving global trends in dentistry. We remain committed to strengthening our footprints across international markets, as Namrata already pointed out with our subsidiaries of UAE and U.S., while continuing to build strong domestic franchise. Innovation remains central to our strategy. During the year, Rotoplex, our Angolan PICP system continue to receive an encouraging response from the rental professionals -- the increase in repeat demand validates its clinical performance and reinforces our confidence in expanding our presence in the advanced and orotic solutions. We also continued our strengthening -- we also continue strengthening our educational initiatives by conducting structured training programs for dental professional clinics and institutions across the last year. These programs focused on product knowledge, clinical techniques and the best practices across our restorative odontic and digital dentistry portfolio. We did close to 16 educational programs last year. The response has been highly encouraging and has helped us deepen our engagement with the dental community while creating long-term customer relationships. Looking ahead, our strategic priorities are clearly doing. We see significant opportunities in expanding our disinfectants portfolio and we'll continue to strengthen our presence in this category. We also intensify -- we will also intensify our focus on digital dentistry, 3D and our Rotoplas which represent high-growth segments within the dental industry. At the same time, we are increasing our focus on Tier 2 and Tier 3 markets where improving health care infrastructure and rising awareness are getting sustainable opportunities for expansion. We also continue to strengthen our engagement with the dental faternity through scientific education program, clinical workshop conferences and professional associations. These initiatives enhance our brand credibility, improve product awareness and reinforce our position as a trade partner for dental professionals. Our long-term vision remains uncaked to build Prevest into a comprehensive innovation-driven partner for dental and oral health care solutions. Every initiative we undertake whether in product innovation, customer education, market expansion or service excellence, it is aligned with the business and our commitment to delivering long-term value for all stakeholders. Before I conclude, I would like to sincerely thank our customers, distributors, business partners, shareholders and every team member of previous family for their unmuting trust, commitment and support. Your confidence inspired us to continue innovating, improving and achieving new milestones. With a strong product pipeline, expanding market of dedicated team, we enter a new financial year with confidence and optimism. We remain committed to creating sustainable growth strengthening our leadership position and delivering greater value to all our stakeholders. Thank you.

[Operator Instructions] Our first question comes from the line of [ Rahul Sharma ] an Individual Investor.

Yes, my question is from last 3 to 4 years, the growth at which the company was growing, it has come down a bit. and the reason for the same?

Mr. Rahul if you see that in the initial stage of the company, always the growth figures, you see significantly. But still, after so many challenges in the international market, if you see that, our company is growing 17%, 18% this year, which is a very positive thing if you see that if the countries in Asian market were suffering because of geopolitical changes. We got the opportunity of taking the -- our business from the other countries. So -- we are very positive debt because our reach is in [ 90, 92 ] countries. So if in any area because of any political geopolitical situation, we get a setback, we cover the sales from the other countries. So we are very positive that now we are expanding, yes, because of the current scenario in the world -- we are taking time in growing very fast. But still, if you see that 17% growth in -- 17.5% growth in export market is very, very satisfactory in the present scenario.

Okay, understood. And ma'am 1 more question. How much percentage of the revenue is the company spending on R&D?

Yes. I will pass this question to my R&D Director, Dr. Sai Kalyan. Over to you.

We don't have the exact number yet. I will pass on the exact number to you, but R&D has done a lot of progress in this last couple of years leading to product developments, 2 products, we are finished the regulatory pathway, and we have secured licenses and hit the market this month. For test licenses for new agents have been done, such as Kris removal agents, [indiscernible]. So all these products are at TRL level, technology rates level 7, that means they are almost market-ready. Again, we're working on import substation of new raw materials or like where we were depending on other countries for these raw materials, we are developing it in-house. We are also developing new active raw materials. So yes, based on the expenditure, we are also generating revenue for the company by import substitution. Then coming to the digital arena, we are heavily investing on new educational programs new 3D printer development program so that we are at par with the globally this thing. So the exact number will get back to you. I don't have it right now I'll just get back to you with the exact number.

Next question comes from the line of [ Yash Modi with Ashika Group. ]

Yes, afternoon to the team. My question was related to the subsidiaries that we have opened in Dubai and in U.S., if management could just elaborate what do these subsidiaries are primarily? Are they for marketing? Because manufacturing, I'm guessing, would be from India. So what are -- and now that the Middle East crisis has tapered down somewhat, so how is the response that we're getting in the Dubai subsidiary that we've opened. That would be question number one. And question number 2 would be what is the current capacity utilization that we are running at a INR 80-odd crores of revenue that we were doing, what is the capacity utilization that we are currently running at in our plant. Those are 2 questions.

Yes. First question, I will start from subsidiary in USA. There is a significant sale growth of U.S. market. Last -- in comparison to last year, we have grown the business in U.S., 37.58% which is included with Axiodent and as well as private labeling, which we are getting because we are participating in the in U.S. by the name of Axiodent different big companies are approaching us. They are meeting us in U.S. So directly, Axiodent is also getting business, which is through online and which is direct from India also. On the other hand, because of our presence in India, the different companies are meeting us there, and they are taking products in their only private labeling businesses we are getting from U.S. So that is the point of business, which in last year's comparison 37.58%. And now your second question is related with Dubai subsidiary. Dubai Subsidiary, we have opened in the month of February and only. So in March, this crisis happened. But still, we have employed 1 -- 2 persons there as a sales manager. They are working there. And they are giving us patent also from there. They are moving in the market. And as far as this online sale is concerned, we are registering our product in Dubai and almost all the work has been completed. And next one, most probably, we will start online sales also in Dubai through this subsidiary company. So it is because of the situation taking more time in comparison if situation would have been normal, so we could start it 2 months before also, but still work is going on, and we are getting good business from their and employees, marketing executives -- manager is working there efficiently. So both subsidiary company are doing good job there.

Sure, sure. And regarding the capacity utilization?

Yes. I will give. Yes, Mr. Jamwal.

Good evening everyone. This is Vinay Jamwal, to the company. As far as the capacities concerned, the traditional capacity, the company is working at a capacity to say, around 60%, 70% [indiscernible], of which total install capacity -- and if the company works a total installed capacity that total turnover would be around, say, INR 125 crore. And as far as the new production line is concerned, which includes digital dentistry, resin disinfectant oral health -- the company is working at, say, around 18% to 20% and very likely to increase the capacity utilized in the coming years. Thank you so much.

Got it. Got it. My last question would be with respect to the steps we have taken to actually increase our domestic sales. We've seen that domestic sales has seen good performance in terms of the distribution reach that we've had. So if Vaibhavji could let us know what are the steps that we have taken in terms of increasing our domestic reach and how are we looking at that part of the business?

See, as far as the domestic front is concerned, in the last 1 year, we have taken multiple steps to strengthen our presence in the market. The first step that we started was with the expansion of our distribution network, we started moving into the Tier 2 [Technical Difficulty].

Hello. I think Vaibhavji we've lost you.

Yes, yes, yes.

Vaibhav sir, lines are connected.

Yes, I think I got disconnected from the call. So as I was mentioning, there are multiple steps that we have taken to increase business and overall strengthen our own presence starting with the expansion of our distribution network in Tier 2, Tier 3 cities. Then we started handing last year is when we started adding our sales team members. That is where we develop our strengthened our own service team and increase the number of safety in the market to penetrate it further. Then the next step that we took upon was to increase our product portfolio that is where we got into business sectors, rotolining. So is it a multiple steps that we have taken to reach the stage in terms of this thing. The first half of the year for domestic business was not that great because of the GST changes and the disrupt due to major events like they were like in the first half of quarter of the year, they were Germany and across the wire, if you remember, they have a huge disruption to weather and then in August, September, the GST, which happened. But in the second half of the year, what we picked up in the domestic business continues to outperform and deliver to our expectations.

Our next question comes from the line of [ Rajesh Shah with BD Asset Managers. ]

Sir, I want to ask that how are we seeing the traction in our Orad business?

[indiscernible] you are asking?

Yes, yes.

Yes, that part from the R&D with that.

The Orodoxbusiness is doing reliable or reasonably good. You know that the oral health is not an easy department. So we are making great efforts by doing some marketing campaigns, door-to-door marketing sending our executives so that the doctors are sensitized. We are also directly dealing with doctors through a previous direct program where we supply B2C. And secondly, we have also registered our product with the [indiscernible] in the United States as well as the Dubai municipality registrations for the cosmetic products also being completed. So we expect to do well this year, there are some new products also coming into the market. We expect 2 or 3 new product launches. So probably that will take the tale of to a much better level. So we're trying at best, and we are sure we will get great success with this brand.

So what is the sales growth and sales for odors year, sir?

Down by 2%, that is because we couldn't export to the markets in the U.S., you have acted a new potash modernization of Cosmetic Regulations Act, and require municipality and after the war we couldn't export substantial amounts. We were planning to export a big consignment of to buy after the Dubai exhibition. That didn't happen because of the war situation. So there's a small drop of just 2%. So we will compensate this loss this year.

And sir, I'm new to the company. So can you explain me that what is the 3D printing? And what is its use case? And what is the cost -- what is our right to win in this market? Because there must be many MNC companies competing for the same and they are for so many years in this business.

Correct. Basically, okay. with the other products, the MNCs have a first mover advantage. But when it comes to the digital dentistry, everyone is at the same level. Probably, we are slightly ahead than the other MNCs. Like, for example, we have big companies like [ Dentsply, ] all of them are still order to complete digital dentistry portfolio. So we have a slight edge in this. And we expect in the next 5 years, at least 40% of all procedures which are done at the dental office, will be having a digital workflow. So we are working with our enormous speed in this area. So that is, you can see around a 40% increase in the revenue this year on 3D printing in -- we are also actively working on the 3D printer project as well so that we have a totally indigenous 3D printer by 2028.

Okay. So as of now, we are selling only printing resins, and we are not selling printer.

We are selling printers also, sir.

Can you correct me, you mentioned...

We're selling printers under the brand name on the Omni and -- and 3D , when we started selling November last year. Yes. So from the last year to this year, we have seen an increase in sale by around 162% -- and 3D resins 40.5% -- right?

[Operator Instructions] Our next question comes from the line of [ Hussain Rangwala ] an Individual Investor.

Just leaving aside the digital dentist part, which was just explained to us, I was wondering what -- who are our main M&C competitors in this field -- and how are we competing with those MNC products since we have a reach in more than 90 countries around the world. And how do we compete with the MNCs in this field? Is it purely on the basis of price front only? Or do we have a niche products where we are competing with those MNCs?

A bit of both, you can say, a major competitor must be like companies like Ivoclar, Dentsply, reshape and all these things. The 2 ways to do this. The cost of production in India is so low and their import duties are so high, they can never beat us on price. And the quality issue since we have good quality management certificates that proves the quality. Second, by doing OEM for this, we presently OEM for around 3 or 4 big companies. And in the next 2 years, we expect to OEM for another big couple of companies. So then the OEM, that also adds to our sales. Directly compete. This is the other way we can compete with those big multinationals.

[Operator Instructions] Our next question comes from the line of [ Ajay Shah with Vivid Asset Managers. ] As a follow-up question.

Sir, we have seen the good performance in our U.S. business -- so how do we see the coming 2 to 3 years for our U.S. business? And whether we are seeing the increase in our private level manufacturing business there?

U.S. market, definitely this year, if the business has been increased by 38% -- so private labeling as well as online business, both business we are getting the success and we are washing that, and we are very positive and hopeful that in next few years, it will definitely grow more and more because we have been aggressively taking part in exhibitions in U.S. different, different parts in U.S.A. And that is now giving the results in getting good orders in both sites. Online business also as well as private labeling also.

[Operator Instructions] As there are no further questions from the participants. I would like to hand the conference over to Mrs. Namrata Modi for closing remarks. Thank you, and over to you, ma'am.

Thank you, everyone. Thank you, investors and stakeholder for taking time and attending this conference I'm very thankful to all of you for your cooperation. And we wish that we will come with more good results and with more positive results in the next quarter. Thank you, everyone.

Thank you so much, ma'am. Ladies and gentlemen, on behalf of Prevest Denpro Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.