Laxmi Dental Ltd (NSE: LAXMIDENTL) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Rajesh Vrajlal Khakhar — Chairperson and Whole-Time Director
Sameer Kamlesh Merchant — Managing Director and Chief Executive Officer
Dharmesh Bhupendra Dattani — Chief Financial Officer
Analysts:
Kashish Thakur — Analyst
Sanjay Sood — Analyst
Tushar Manudhane — Analyst
Payal Shah — Analyst
Smith Gala — Analyst
Akash Dobhada — Analyst
Manjeet Buaria — Analyst
Kamlesh Bagmar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Laxmi Dental Limited Q3 FY26 earnings conference call hosted by Ilara Securities. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participants lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Kashish from Elara securities. Thank you. And over to you.
Kashish Thakur — Analyst
Hi thank you. Good day everyone. I on behalf of Ilara Capital welcome you all to Q3 and 9 months FY26 earnings conference call of Laxmi Dental Limited. From the management side we have with us today Mr. Rajesh Khakar, Chairperson and Whole Time Director. Mr. Sameer Merchant, Managing Director and CEO and Mr. Dharmesh Dutani, Chief Financial Officer. I now hand over the call to Mr. Rajesh Khakar for his opening remarks. Over to you Rajesh.
Rajesh Vrajlal Khakhar — Chairperson and Whole-Time Director
Thank you so much Kashish for the introduction. Good morning everybody. A warm welcome to all of you and thanks for joining our earnings call. On this call we are joined by our MD and CEO Sameer Merchant, CFO Dharmesh Dattani and Strategic Growth Advisor our investor relation advisors. The results and the presentations are uploaded on the stock exchange and company website. I hope everybody has had a chance to look at them. For Q3FY26 we delivered a revenue of rupees 66 crores as against rupees 61.7 crores in same period last year recording a year on year growth of 7.1%.
It is noteworthy that the performance was despite a challenging global environment. Owing to uncertainties around the macroeconomic environment as well as geopolitical situations. This reflects the resilience of our products across countries and we are confident that we can grow our business even faster. Going ahead, the India US trade has offered a much needed breather to exporter like us. Lower tariffs are expected to give a positive push to both our volumes and profitability. Coming to our domestic lab and aligner solutions business we experienced some softness during the quarter towards which we have already undertaken some innovative strategies.
Gross profit margin stood at 69.5% which is minor improvement sequentially due to relatively lower sales mixed contribution from scanner sales which usually comes at a lower margin. Scanner sales are strategically important for us, serving as a key enabler for future growth across segments and playing a crucial role in advancing our digital dentistry mission. Gross profit margins in the laboratory business and aligner business remain steady, hence the overall gross margin profit moves in line with the product mix shift during a particular period. Our EBITDA and profit and pat margin for the quarter stood at 10.6% and 3% respectively.
For Q3FY26 we saw a full quarter impact of US tariff waging on our EBITDA margin by around 150bps. Considering the recent development, we expect a reversal of this impact to some extent in the next few quarters based on the requirement of new labor code and relevant accounting standard. We recorded on one time impact of INR 5.8 crores as an exceptional item for the quarter. We will evaluate and account for any additional impact if required in subsequent period. Going Ahead we are already seeing healthy performance in the month of January 2026 across businesses and expect this momentum to continue through the rest of Q4FY26 and are aiming for closing this year with a strong exit quarter.
We are confident to sail through these near term challenges on the back of solid fundamentals which are placed alongside multiple initiatives such as promoting digital dentistry, implementation of AI, innovative product launches, enhancing brand visibility and expanding global dental network. Now I will request Sameer to give you some more color on our business performance during the quarter.
Sameer Kamlesh Merchant — Managing Director and Chief Executive Officer
Thank you Rajesh Bhai Morning everyone. After a strong start to the calendar year, February brought additional positive news with the India US Trade deal. In fact, yesterday itself we got good news from our custom agent that the tariffs have been reduced to 25% from 50% in FY25. The US market contributed nearly 20% of our revenues amounting to 46 crore, reflecting a 25% YoY growth this year as well. The business continued to grow at a healthy pace with a more stable operating environment in USA alongside the recent positive developments of EU FTA starting FY27. We expect to scale our international business at a faster pace in the upcoming years.
EUFTA is seen as a major development for India’s healthcare sector and over time could support greater export opportunities for us, improved access to advanced medical markets and stronger industry growth. Speaking about segment specific quarterly performance, the dental lab business recorded a decent growth of 10.4%. Y o y Our international lab business delivered a robust growth of 25% in the USA. We continue to absorb higher tariff cost to maintain our market share in Q3 due to which the revenue grew at a healthy rate while the profitability was lower. But as mentioned by Rajesh Bhai in his opening remarks and by me as well, we are confident of improving our profitability supported by recent positive development with the newer tariff which has come down to 25% from 50%.
As we operate in 95 plus countries, our focus remains on deepening penetration in these markets while continuously expanding into new ones. To support this, we are placing greater emphasis on business development initiatives such as participating in large dental events like IDS and many more and also few more. In the collaboration with our DSOs, we are actively working towards securing the required export certifications from multiple countries which will open up opportunities for us going ahead. Speaking of domestic lab business, it delivered a softer performance for the quarter. However, we have implemented some strategic initiatives in Q3 FY26 and it has a good positive impact has begun to reflect in January 2026.
We expect Q4FY26 to mark a robust YOY performance in the domestic lab business in the long run. We remain committed towards promoting digital dentistry and expect this segment to scale meaningfully over the long run supported by strong tailwinds such as enhanced brand visibility, industry wide consolidation and stricter regulatory norms. The Aligner solution business performance largely remained in line with Q3FY25 and stood at 16.4 crores. Bizdent which is a clear aligner business in India continue to face pressure due to competitive pricing environment as discussed in the previous earning call. However, as we speak today the pricing situation is trending towards normalcy and we expect it to continue for the rest of the quarter.
So similar to the domestic lab business with the help of new strategic we expect a strong quarter From Bizdent in Q4FY26 Widia, our aligner raw metal business delivered a robust YoY growth of 19.6%. Building on Tagless strong global brand equity in the aligner raw material space, we expect this business to grow at a decent pace. Going ahead, CANF sales for the quarter stood at 6.4 crores with a YoY growth of 46%. Our focus remains clear on increasing the penetration of scanners in Indian markets to drive future growth for the overall dental industry as well as for Laxmi Dental.
Currently within the domestic market, the digital penetration at the company has already gone up to 79% as opposed to a single digit penetration level for the overall Indian dental industry. This consistent increase in our company level digital penetration marks our strong commitment towards promoting digital dentistry and spearheading this revolution for the entire dental industry in India. Now speaking about our pediatric dental business, Kidse Dental, the revenue for the quarter stood at 5.9 crores delivering a YoY growth of 7.2%. With a portfolio of unique innovative world class products, this business has significant growth potential both in Indian and global markets.
We are actively working towards securing the CE certification for a KIDSE range and once approved we expect this to have meaningful acceleration growth in this segment. Based on the trends observed in January, demand conditions across our business segments have begun to show positive signs of growth. We expect to sustain this trend on back of continued engagement with our dental network, positive development on the US Tariff and Europe FTA which will allow us expansion into newer geographies and growing adoption of our scanners. With initiatives undertaken by the company along with overall consolidation in the domestic market, we at Laxmi Dental are well positioned to deliver resilient industry leading growth in the years ahead.
I now hand it over to our CFO Mr. Dharmesh Duttani to take it forward. Thank you so much.
Dharmesh Bhupendra Dattani — Chief Financial Officer
Thank you so much. Good morning to all. Allow me to walk you through our financial performance. Let me give a glance at our consolidated Financial Performance During Q3FY26, revenue from operating from operations grew by 7.1 percentage on yoy basis reaching to 66 crore up from rupees 61.7 crore. Gross profit for the quarter stood at 45.9 crore with a gross margin of 69.5%. Employee cost during the quarter stood at 25.9 crore reflecting a yy increase of 19.2%. This includes ESOP expenses amounting to rupees 1.6 crore as against rupees 0.4 crores.
In Q3FY25 other expenses were at 13 crore. EBITDA for the quarter stood at rupees 7 crore with a margin of 10.6%. For better comparability one can look at the adjusted EBITDA which includes recorded EBITDA plus 60% of KFC dental pact plus 49% of IDVG aid pact and ESOP expenses. This stood at rupees 9.6 crore. We also achieved a significant reduction in finance cost which declined sharply to 0.3 crore from 1.5 crore. As the company is debt free. Profit after tax for the quarter stood at Rs. 2 crore. Coming to our nine months FY26 performance, revenue from operations stood at rupees 203.9 crore registering a 14.3% growth compared to rupees 178.4 crore in the previous year.
EBITDA for the period stood at rupees 29.9 crore while adjusted EBITDA came in at rupees 38.1 crore. The company reported a profit after tax of rupees 18.8 crore with a margin of 9.2%. With this, we conclude our opening remarks and open the floor for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanjay Sood, an individual investor. Please go ahead.
Sanjay Sood
Good morning. Thanks for giving me the opportunity to ask the question. My question is that this quarter sale was down until the release and what I was assuming that sale will go up because of two issues you had this peak season. This quarter is a peak season that was sold by you in the previous quarters. And number two, tariff basically should impact the margin, not the sale. So what actually has changed in this quarter? That is what I just wanted to understand. Thank you.
Sameer Kamlesh Merchant
Sure. Thank you, Sanjay. See, we saw the softness now when you say about tariffs.
So if not for 50% tariffs, we would have had even much more stronger growth. So we had to let go of few customers where the tariff situation could not allow us to give them the pricing that they needed. So that was also one of the reasons, especially in the US where tariffs, even if it’s at say 20, 25% growth, we could have grown much stronger there if not for the tariff situation. Number two, I think the scanner sale itself was slightly lesser as compared to the Q2 and with the initiative that we had built. So we saw there was a slowdown and there are multiple factors.
You know, there was peak season in India is usually due to lot of NRIs coming in in India for treatment. Where this time for you, especially our zone in certain part of India where there are a lot of us NRIs was very less and that was clearly evident which you know, we personally experience that couple of places and the dentists also were saying that people are not traveling with all those things combined. You know, we saw the situation, we have implemented some initiatives on Q3 and that is what we said. Q4. We expect it to have a very Strong quarter in terms of dental labor in terms of the aligner business both and we have already seen great results in Jan.
Sanjay Sood
Okay, and another thing this what you project is on common currency basis like dollar has considerably gone up. So in fact sales should have gone up. That is what was my assumption.
Sameer Kamlesh Merchant
So we are charging from in India when we are charging say domestic is anyways the same on the export side there is a marginal difference but there is always an offset because we are buying a lot of raw materials internationally. So yeah there could be a minor thing in terms of the revenue because of the dollar increase but that is very very small.
Sanjay Sood
Okay, thank you.
operator
Thank you. The next question comes from the line of Kashish Thakur from Elara Securities Private Limited. Please go ahead.
Kashish Thakur
I thank you. Thank you for the opportunity. So just wanted to know a bit deeper on US tariff as like we had an impact of around 150bps in Q3. Now the tariff coming down from 50% to 25%. What will be the expected recovery timeline? Probably I think so in your opening comments you said that Q Q1 FY27 probably is more what you are expecting to normalize it. And like what kind of impact do we anticipate in like FI FY27 from the same.
Sameer Kamlesh Merchant
Thank you Kashish. So I think on our side which I told you yesterday night itself we got details from our custom agent that the tariffs have been reduced to 25. In fact one of our shipment was tariff at 25%. In the past it was all 50% plus plus actually it was going to almost 55 56% because of certain additional tariffs on the 50% tariff. So now it’s flat 25. I think for this quarter we should see probably half the impact because today it’s already 11. So one and a half month we have paid 50% but for the rest one and a half month we will pay 25.
But like you said from Q1FY27 we think this should improve our efforts on the US side. This should increase business on the US side because now we will be able to be I would say more competitive as compared to what we were before when we were paying 50%. So we are already making an effort to reach out to those customers in the past who probably could not do business with us at 50% and also taking initiatives to bring in new customers as well as.
Kashish Thakur
Thank you sir. So another question is on business with pricing pressure and business normalizing in Q4 what is our expected volume versus pricing contribution we expect in FY27 towards the align of business.
Sameer Kamlesh Merchant
So the early trends now whatever initiatives that we have taken in Q3, it has shown a very good impact in January and we expect it to continue in this quarter and moving forward as well. We are adding few more important aspects in the aligner category. So we see that it should have good growth in the next year.
Kashish Thakur
Understood sir. And sir, one last question on kids dental. Broadly it has grown a bit, but what is your aspiration for this business like badly in next two, three years?
Sameer Kamlesh Merchant
In the next two, three years it should have a solid growth. We believe that we have products which are world class. We are awaiting registration in many independent countries as well as we are awaiting CE registration which will allow us to sell in whole of Europe. And with the Europe FTA being planned for next financial year, I think we are in a good position to scale this very, very well.
Kashish Thakur
Thank you sir, I’ll turn back to you.
Sameer Kamlesh Merchant
Thank you.
operator
Thank you. A reminder to all the participants that you may press Star in one to ask a question. The next question comes from the line of Tushar Manudhane from Motilal Oswal. Please go ahead.
Tushar Manudhane
Thanks for the opportunity. The two parts, if you would elaborate in terms of the steps which you have taken to devise growth in aligner business. That is.
Sameer Kamlesh Merchant
So. Hi Tushar, on the alignment side, you know we saw certain situation now there’s a lot of internal assessments which we have created where when we took those decisions in Q3. Now we are seeing the trend going up in Q4 in terms of some initiatives towards the doctors, initiatives towards the orthodontist and the dentist and we are also launching couple of newer products as well in the aligner space. So give us the growth that we are looking for moving forward.
Tushar Manudhane
So shall we expect this growth coming in like Q4 almost or that will take maybe another 3, 5 months to see that pickup in the growth .
Sameer Kamlesh Merchant
Q4 itself we should s ee growth as compared to even Q3 or even last year Q4 we should see stronger Q4 and then moving forward in the next year we should start seeing growth back in the aligner segment.
Tushar Manudhane
And even the domestic lab offering has been pretty stable. So if you can highlight measures taken to sort of improve growth perspective.
Sameer Kamlesh Merchant
Even there, like we said, January did extremely well and we are confident that our Q4 domestic lab will also do very good because we saw certain situations what is happening in the market and we took those initiatives and you know we are pretty positive in that regard. So we are seeing January which is good and again Q4 is good for the Mastery Lab business.
Tushar Manudhane
So sort of can you quantify like, you know, in terms of how, you know, considering the current revenue base of 2021, how do we see the scale up happening in this business?
Sameer Kamlesh Merchant
So currently from a quarter which is 2021, I would say we should be in good place to have close to 24 for the Q4 and then moving forward with that.
Tushar Manudhane
Thank you.
operator
Thank you. The next question comes from the line of Payal Shah from within securities. Please go ahead.
Payal Shah
Yeah, good morning. Thank you so much for the opportunity. I have two questions. First, just wanted to check if you have open up new countries during the quarter for any of your segments, if you can throw some light on your strategy, you know, towards the international business. That is my first question.
Sameer Kamlesh Merchant
So in the Q3 usually the countries that we open up should happen in the other quarter. So we have had one or two smaller countries which have opened up because December being Christmas month internationally it’s always slightly slower. But our international plan, you know, moving forward is to get into as many geographies as possible through the distributed network. Since we already have the products and we believe that, you know, the certification plays a key role. And that’s for us is probably the most time taking aspect in getting into newer geographies than the BD part because we have products which are dental products are also, you know, borderline healthcare or medical products.
So when we enter a country, it can take say between three months to one and a half year, depends upon which country we are targeting for it to open up. But we believe that as we move forward we will keep adding countries every quarter.
Payal Shah
Okay, okay. So my next question is how do you see your domestic dental business performing going ahead? Like do we see any seasonality in this particular business?
Sameer Kamlesh Merchant
There is a little bit of seasonality from H1 to H2 which has been historic. I would say this year was probably slightly exceptional with Q3 having a lot of especially the American NRIs not opting to come here. So I don’t know, you know, if you have some friends, family who are US based, they were all very, very hesitant. In fact, doctors, especially the Gujarat belt where which receives a lot of foreign tourists which are from USA or the NRIs from USA, they have really not come as much as, you know, they wanted to come. But apart from that, it is usually seasonal.
So H1 is usually 45%. H2 would be 55% for a domestic lab. That has been the trend since a long, long time.
Payal Shah
Okay, okay, that’s it from my Side thank you so much for entering this.
operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Smith Gala from RSPN Ventures. Please go ahead.
Smith Gala
Yeah, thank you for the opportunity. Just wanted to understand a bit more on the tariff part. So yes, tariffs coming down to 25% from 56, 57% has helped a bit but. But in our earlier conversations during con calls we also mentioned that at 25% tariffs which were earlier, yes the majority of the hit was taken by the customers back in the US but at that time at this tariff at 25% tariff rate also we had to take certain portion of the hit. So how this 25% tariff is derived, considering whatever articles news we are reading, it is down to 18%.
And at 25% how confident are we on our margins and growth?
Sameer Kamlesh Merchant
Thank you Smith for the question. So on. See whenever something happens from 5057 to 25, generally you know there is a positive sentiment among customers amongst us. We can go back to them saying hey you know, it’s not 50 anymore, it’s 25. So it’s a bit of a breather for all at the same time. 25 becoming 18 is there is clarity in terms of that 25% will go to 18. The timeline when we spoke to a custom agent is however not sure. So they said it could happen, you know, within two weeks, within one month, within two months they are not sure 25 has happened which is very clear because the custom charged 25 to 1 of our shipment.
But 25 to 18 journey of when it will happen. We’ll have to wait and watch. Now how this will impact us in terms of our growth is China is at 34% while we were at 50%. So we were anyways more expensive. Being at 25 gives us certain leverage to go ahead and speak to the customers like I said before in our call who were not probably willing or not comfortable giving us business as it was satisfied 50% although we were absorbing some cost. So even if we split, it was still 25. 25. If in the 25 scenario we split it becomes 12.5 and 12.5.
So it’s much lesser as compared to what it was in the past. And already with the news, like we said, we have reached out to our past customers and there are a few new customers who have reached out to us as well. So we will. It’s still like two, three days old so I would say we give it a couple of months but we on our side are very positive that us should show a very positive growth moving forward.
Smith Gala
So in quantifiable terms, assuming the rate comes back to 18% by Q1, FY27, so on an annual basis, keeping a 26 as a low base, what sort of growth are we expecting on a CAGR term for next two, three years? And what are the EBITDA margins that we should target considering the tariffs come down at 18%.
Sameer Kamlesh Merchant
So already as compared to last year, we are in the range of about 25% growth for the international market. So moving forward also we feel that this range, you know, 2025 range, provided, you know, something again exceptional, doesn’t happen in the US in terms of tariffs, it should be achievable. And in terms of margin, when you said on the international side, we are already, you know, close to 22% margin. So this should also increase, you know, post the tariff situation going down, we should see some improvement there as well.
Smith Gala
So 2025% growth on international numbers. And what about domestic?
Sameer Kamlesh Merchant
Even domestic, like I said, you know, today we are in domestic at about 12% in the year. But like we told, you know, Q3 was even a surprise for us in terms of slowdown. But when we actually reached out to a lot of doctors asking them about the situation, they said that this is one of their situation where they also anticipate a lot of us NRIs to come in, which did not happen. And western region is our strong belt anyway. So 45, 50% of the business is west. So that had an impact. But otherwise I think we should still do in the range that we had said in the past, which was 2025.
If you know, something like this year doesn’t happen. This year had so many situations, you know, with the labor codes coming in, with the tariffs coming in, with the geopolitical scenario. We hope that next year should be a more smoother year as compared to this.
Smith Gala
Okay, okay, understood. And just on console level margins, I want to just more one more clarity. So around 16 70% considering if we assume that all scenarios are good, be it geopartical tensions or tariffs.
Sameer Kamlesh Merchant
Oh yeah, absolutely. In fact, we were doing so. In fact, last year, FY25, we were at 17.5. So we expected this year, you know, on our side to be higher. But you know, we had a few impacts which was out of our control. You know, tariff, labor code, these are impacts which are absolutely beyond our control. But we don’t expect next year. There are no surprises like this. I think we should keep Moving upwards.
Dharmesh Bhupendra Dattani
Recently the E stop costs will also come down because the first year has a larger ESOP impact. So the next year onwards the ESOP impact will probably be half of that.
Smith Gala
So should we assume a ballpark number of around 20% then.
Sameer Kamlesh Merchant
I would say y ou know, that’s our internal aspirations, Smith, that we should be in that range. And even in, you know, I would say past when we were doing business, we always, you know, 20% is something in our mind which should be achievable on a normal.
Smith Gala
Okay, thank you. That’s all from my side. Best of luck.
operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Kashish Thakur from Elara Securities. Please go ahead.
Kashish Thakur
Thank you sir. Thank you again for the opportunity. So just one question on digital dentistry. Just overview that how is it changing dentist behavior in India and are you seeing some resilience from smaller clinics towards scanner adoption?
Sameer Kamlesh Merchant
Thank you, Kashish. So you know, in the past we have explained that even current penetration is single digit. You know, I would say even if we validate a lot of data, since everything is private, it could be probably 4 or 5%. We don’t anticipate it to be more. So 95% of dentists are still not using a scanner. So there is resistant. It could be in terms of just the technology adoption, could be in terms of price, could be in terms of just how they process their own workflow. But what we are seeing is that our penetration is what we are focusing on.
So if you see where we were probably three, four years back, we were in the 20s in terms of penetration. Now we are 79% in terms of penetration. So once we reach a threshold of 90, I think that’s the pivoting point for us. As for us to make a decision if to go 100% digital or not. Right now still 21% of our business is physical impressions. But I think having said that, we are now seeing dentists which are much more open to adopting digital dentistry. The scanner price also from what it was in the past pre Covid level were 15 to 20 lakhs.
And now it is down close to 3,4 lakh rupees. And with easy AMI is available on the scanners from a lot of distributors. I think digital dentistry in the next five years will grow very, very strong. You will see more and more dentists adopting scanners.
Kashish Thakur
Understood sir. Just one more question on this innovative products which you mentioned in your opening remark. The AI initiatives and all what you are taking. So can you just throw some light on that as well?
Sameer Kamlesh Merchant
We have done some soft launches on the AI dent part and also internally we are implementing a lot of AI which is still in pilot phases. But we believe we have seen very, very good potential, internal potential to increase efficiencies and external products which can really help the dental fraternity in terms of diagnosis and in terms of monitoring of a patient. So I would say in our next earning call we should be able to give some input on both of these situation internal, probably less because it’s still a pilot internal. But on the AI dent we have already done a soft launch to certain key opinion leaders and we are awaiting feedback and once we have that, we should be able to give you more insights in the next running call.
But we are very excited on what we are creating.
Kashish Thakur
Thank you. So that’s all from my side.
operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Tanya Chaudhary from Investec. Please go ahead.
Akash Dobhada
Hi. Hi sir, Akash here. So my. So the thing is you are saying that FY27 will be a comparatively better year because of improving tariff situations and also the EU India Treaty. Now I just wanted to understand that you are also intending to, you know, further your digital penetration to 90%. So combining these two scenarios, how do you see its impact on the gross and the pat margins going ahead? Because we had guided for 75 to 80% gross margins and pat margins of 13 to 15%. So just wanted to have some light on that.
Sameer Kamlesh Merchant
Sure. So I think you know all the situation hopefully this year has been a lot of, I would say surprises every month, every quarter since the Trump era started, especially in the newest part. And now we believe we have seen a lot of settling of the macro dynamic volatility which was there. So that should definitely help our US and the European business in India in terms of expanding in term of the digital portfolio that we mentioned of moving towards 90%. I think we are pretty positive that if we have gained from 20 to 79, I think the 79 to 90 journey may be slightly tougher because that’s the last leg of it.
But we believe we should be able to push the dentist with two aspects that we have. One is selling all the scanners and the other is can as a service. So we have both models for the push and in terms of you know, the margins that you said see, we had guided 13 to 15. If you see before the exception items, we are already close to 12.1%. So we were in that range in that picture that all the tariff scenarios came into picture. So there are a lot of things which came into the picture as well.
And there’s a one time impact of code as well. Again, now this is a government decision, right? You know, we are at company with 2400 people. The government decides something, we respect it and we have to take that into account. But those are external factors which nobody can account for. And hopefully next year there are no surprises and we will keep going strong. We have done for the past, you know, 36 years of our company since Rajesh Bhai started it. And we are very, very confident even today that fundamentally nothing has changed. Fundamentally. We are still a strong company.
We are still committed, we are still creating products, we are still delivering products. We are still expanding our geography from 95 to different countries. Now the fact itself that our product is accepted by 95 countries, it says a lot about what we are doing. It’s just that the first years, the. Way we wanted has not become that first year. And we are the first one to accept that. Yes. You know, we wanted it to be in a certain way. But then there were so many dynamics, external dynamics that we had to go with it. So you know, we have decided fine, there are some dynamics. We have had Covid in the past. We have had other situation in the past. This is one more year. We keep working hard, keep our heads down and focus on what we do best is growing the company.
Akash Dobhada
Right. So. So the thing is, let’s say if, you know, if adverse Mac and Geopolitical Dynamics did dent your performance this year, should we expect that in FY27 the favorable tailwinds, you know, especially in the case of US and in the case of Europe deal as well. So I mean are you still comfort, still confident of achieving your earlier guided margins for FY27 onwards?
Sameer Kamlesh Merchant
Absolutely. If you ask us internally. Yes. If there are no external surprises, we should have even achieved this year as well. So we should achieve next.
Akash Dobhada
Okay. Okay. And so one more question. Last year you had guide, you had. Sorry. Last quarter you had told that you were expecting certifications for your pediatric products in 4Q. So any, any, any color on that? I mean can we see any, any, any approvals in the fourth quarter coming for the pediatric division?
Sameer Kamlesh Merchant
Yeah. So for the C.E. we have applied. So now when you apply for a certification like C.E. you know, the control is majority on the, I would say the regulatory people sitting in Germany. So all we can do is send them a nice email saying, hi, you know, what is the status? And they will say it’s in progress. So that is all what they say. They don’t give you a specific timeline. It’s not like a cutoff time for them. So we are hoping that we should get it in Q4. We’ll keep you posted how situations move, but we haven’t heard anything, which is a surprise where we should not get it.
So that, that is a positive part that we have not heard any hurdles to say that, oh, we will not be able to give you. The only thing is they’re asking certain questions. They will ask some documentation constantly. So that’s at least a good part that we should get it now. It’s only a matter of time.
Akash Dobhada
All right, sir, that’s it from. Thank you and all the best.
operator
Thank you. The next question comes from the line of Manjit Bwaria from Samya Advisory. Please go ahead.
Manjeet Buaria
Hello, good morning and thanks for taking my questions. I had two basic questions. One was, you know, when we sell scanners to dentists, you know, the scans which they take using that, can those scans be sent only to us to, you know, get the final product that the scans can be sent to any dental lab was first question. The second question was, you know, earlier, before scanners came, I would presume that, you know, the company would have had many feet on street, which would have ensured that turnaround time is very fast to collect the physical impressions and then also get them delivered once the, you know, products were made.
So with the scanners coming in, is that an edge which goes away and gives a chance to other dental labs to, you know, start off catering much faster to the dentists. So those are my two questions. Thank you.
Sameer Kamlesh Merchant
Sure. Thank you. I’ll come to the first question that you asked regarding the scanner versus the physical impression collection. Now we have close to 300 people which are feet on street. And if we have to collect an impression pan India, you know, the person has to go to a dentist, collect the impression, come to the center office in the city, consolidate. So everyone will have to come. If there are, say 25 people in Delhi, they will all have to come to the Delhi office, submit all the impressions. Someone will pack it, put it in the air, cargo on a plane, and then it lands in Mumbai.
We get it from Mumbai to our Mira facility and then the job starts. So that was the whole logistics that because of scanner we don’t need to do that. So if the person moving around in Delhi scans from any part of Delhi within two minutes, the scan is in Mumbai. So he doesn’t need to go back to the office, which saves his time. The office doesn’t need to have people who are packing impression, shipping through the air cargo, coming to Mumbai and then collecting from Mumbai, getting it to Mira facility. All of that gets eliminated.
So with scanner, the speed is definitely a big change. And if you speak to any dentist, I’m sure they would say that that has been the biggest change in terms of speed. And, and number two, whenever a dentist makes an impression, there is always a situation where a dental lab could reject the impression saying they need certain more clarity on the impression making. So that was very routine, not just in India, but across the world. And you make an impression, it comes to Mumbai. We, our technician will make that negative replica into a positive replica.
So we pour what we call plaster in the impression. Once we see the model, we are able to give more insights to a dentist saying that, oh, you know what, maybe we need certain changes here. And I’m sure someone with you or in your family would have experienced that the dentist have called you back to make a new impression. So with scanner that goes away. So what we have is we call a live scan verification team where as soon as the dentist takes a scan, they can send it to us. Within five minutes our customer service team gets on a call with them, assures them that everything is fine.
If there are any changes needed, we can make the changes. Then the dentist makes the changes, rescans there and there and sends the scan again so that repeat trip is not needed. The speed is very, very important. And of course the quality of the scan also enhances the product as well when it’s delivered. So that is very well clear and you can, you know, you can do Google Gemini chat GPT on how scanners help. Again, a physical impression. There are loads of content out there which tell you why scanners are important. Now coming to your question too in terms of how this scanner is shaping up for us now within the manufacturing facility, you know, some of us, some of the investors have done facility visit and I highly recommend anyone who is looking at Laxmi Dental should do the site visit for you to have more understanding the operations itself for a physical impression and digital impressions vary very differently.
So when you do a digital impression, you eliminate almost 30, 35% of the processes that is there if you are doing a physical impression. So with that, once we reach a threshold like I mentioned of about say 90% plus, we should be in the position to have a fully digital dental lab as compared to a hybrid dental lab that we have today. So that should enhance in terms of the speed of the product, the quality of the product and also the efficiency in terms of realization of margin for us as well.
Manjeet Buaria
Right. So sir, sorry, I had two follow ups on this itself. One was again, you know, what I wanted to understand was if the whole ecosystem starts becoming digital, right. I would have thought having seat on street is what’s only large dental labs can do to give a certain turnaround time. So does becoming all digital increase the competition for us was my question. Because, you know, you don’t need enough, you don’t need so many people on the ground. You know, it goes directly to dental labs. So, you know, that whole aspect of giving fast service goes away because everybody can give fast service.
That was one point I was specifically trying to understand. And the second one, sir, was can your scanners be used to send those scans to other dental labs as well or your scanners can be used to send the scans only to your labs? That was my first specific question.
Sameer Kamlesh Merchant
Sure. So two parts on your question of the scanner being sent to other dental lab. So how we sell the scanner is we sell it at a minimum value or a volume commitment from the dentist. If they are reaching that threshold over and above that, we keep the scanners open for them to decide what they want to do. Because if you lock it 100%, we had done it in the past, but it gives a, I would say slightly uncomfortable thought to a dentist where the scanner is completely locked. While we may evaluate that in the future, once, you know, the mindset of a lot of people opens up about having a lock scanner.
But currently when we sell a scanner, we have a minimum value commitment and over and above, like I said, they are able to do what they feel like doing. Number two on the competition part, I think scanner is not just a tool which can digitize dentistry. Scanner is just a start point. So like I said, if you visit the facility, you will see after the scanner is what you need is a 3D printing machine, then you need CNC machines. So this becomes more of a, I would say healthcare engineering tech kind of a situation. So this is no longer just a regular dental lab.
And unfortunately not just in India, but across the world, but especially in India. 95% plus dental labs are a lot of mom and pop small dental labs with, you know, three, four, five, say maybe 10 people maximum and they are doing A lot of traditional dentistry or physical impressions in the past. So when we are seeing that they need to move from, say, buying the scanner, buying a 3D printing machine, buying a CNC machine, developing a technology platform to have integrations with all of them, and having engineers to support all of that, we feel that transition is going to be tougher for a lot of dental labs.
It may happen for some, for sure. You know, there’ll be some who will be able to do it, but majority of them would find it tougher. And it has been international as well. And that is why consolidation has happened. If you see us, you know, from 10 years back, the number of dental labs that they had, today they have less than 50% of that dental labs. 50% have completely shut down. Because it’s very hard to be updated with technology every year. You know, as a large company, it becomes easier for us to adopt tech, but for a smaller company, constantly adopting technology becomes a challenge.
So that is where we feel the other labs. While some of them will be able to do it, it’s not the majority factor.
Manjeet Buaria
Okay, very helpful. Sir, can I ask one more question, please?
Sameer Kamlesh Merchant
Sure.
Manjeet Buaria
Okay, sir, just one thing I wanted to understand the digital scans itself. You know, when I speak with dentists, they say the digital scanning ecosystem still takes them a lot of time, right, to get the scan perfectly. So is this a technology issue at the scanner level, or is it the practice issue at the medical professional level, which takes time to sort of adapt to? That was my last question. Thank you.
Sameer Kamlesh Merchant
I think you rightly said it’s that tech is not a problem. You know, you. If you see on YouTube, you could do a scan within a minute. So a lot of videos where a dentist, you know, I, I do a scan within a minute. I do scan within 3 minutes, 5 minutes. So it’s just the practice of that dentist is just the adoption curve that they’re going through right now. In fact, there are dentists that we know who have three dental chairs and three scanners because they feel that scanner is like a necessity, like having a handpiece which is, you know, trimming or cutting a tooth, or having an RVG on every dental chair.
A small X ray like the scanner should be there because it’s such an important tool. So answer to your question, the technology is not time consuming. It’s the practice of that individual, which, besides the timeline, you know, we have our own scan as a service people where they are taking scans. You know, in a breeze, they would just go within 10 minutes, they are completely done taking opening A laptop, setting up the data, scanning impression or scanning the patient and then coming out. While some dentists, yes, if they start, you know, early or if they’re not comfortable with using the tech, they may take time but eventually it’s just a matter of time.
Any dentist who has used it long term, if you ask them, you know, they will be able to scan very, very quickly.
Manjeet Buaria
Okay, thank you sir. Thanks for taking my questions.
Sameer Kamlesh Merchant
Thanks.
operator
Thank you. The next question comes from the line of Kamlesh Bagmar from Lotus Asset Managers. Please go ahead.
Kamlesh Bagmar
Yeah, thanks for the opportunity, sir. I don’t know whether you have called out in the call. So how do we see the margins going forward? Because honestly over the past two quarters I do agree that the situation has been very over the time, but in terms of guiding as well, we have not been up to the mark, which is expected. So if we see the last quarter we were saying that we had a tariff impact of 90bps. Now this quarter it is a fully quarter impact of 150bps. But despite that, our margins have fallen back up there on 450bps.
Quarter on quarter adjusted basis. And on top of that our exposure to the US is around 20 odd percent. So why we are seeing such a significant impact over quarter on quarter and in terms of guiding, how are we seeing the growth part and the margins part?
Sameer Kamlesh Merchant
Thank you for the question. I think see again, like I said, when we are guiding with all intent on our side to be as close or to beat the guidance, there are factors which are coming in from external which are creating those situations for us. Again, you know, if you see what we did last year, fundamentally what we are doing this year in terms of how we do a business, not much has changed. But from say close to 17.5 or close to 18% last year, no, we are today on a yearly basis at 15%. So there’s a difference of 3% in terms of EBITDA.
That too with everything that just you mentioned about the volatility about our ESOPs, about our tariff situation. So we feel that we have still been pretty strong in what we have done and we remain committed and we remain strong that, you know, we’ve been doing this since 36 years. We will keep moving forward in a very, very strong way. There will be years which will have an impact like this, but there are going to be many, many years which should have good growth as well. So you know, unfortunately for us is the first year of being listed that the year it is right now.
But having said that, we are still very confident internally, you know, as management that we are absolutely raise the focus on what we do in dentistry and we truly believe that we have created leadership position and we will consolidate in the coming future as well.
Kamlesh Bagmar
In terms of guiding forward.
Sameer Kamlesh Merchant
See guiding forward we said apart from if the situation is not like this year, you know, next year we should have no issues in growing by 20 25% and coming close to a margin of between 18 to 20%. We were already there at 17.5. Was already there last year in terms of EBITDA.
Kamlesh Bagmar
And can you highlight like how is the competition, competitive intensity in the market?
Sameer Kamlesh Merchant
Competition I would say it has been there, you know, even previous to our listing or post our listing. I don’t think something has changed. Very, very substantial. It has always been there. We’ve been business in 36 years in any business, you know, I don’t think any business can say they don’t have any competition. There is competition. It is going to be here today, it is going to be there tomorrow, it is going to be there in the next 10 years. But that is what we have done and we keep working hard on our side. Fundamentally, we keep doing things which we believe are right and long term, sustainable and good from a company perspective.
And that is how we will always keep moving forward.
Kamlesh Bagmar
Thanks a lot.
Sameer Kamlesh Merchant
Thank you.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to management for closing remarks.
Rajesh Vrajlal Khakhar
Thank you. With this I conclude the call. If you have any further queries, please contact sga, our investor relations advisors. Thank you everyone for joining us today on this earning call.
operator
Thank you. On behalf of Elara Securities India Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.