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1. Opening Hook
The company that sells dental supplies online ran out of its own dental supplies. That, more or less, is the FY26 story. Dr Vikas Agarwal opened the call by being unusually plain: own-brand stockouts dragged gross margins from around 34% to 23.7% by Q4, and a weaker rupee raised the cost of imported products, management said. He called these operational issues, not structural ones.
The numbers behind the candour are loud. Full-year operating margin landed at 4%, against 10% the year before. The March quarter’s operating margin was 0.30%. Total income reached ₹283 crore on continuing operations, after management deliberately exited ₹39 crore of low-margin trading. Core business grew 33%, per management. The IDS Denmed acquisition, nine months in the making, was abandoned. A lot happened. Most of it happened to the margin.
2. At a Glance
- Operating margin (FY26) – 4% – down from 10%; the slide that goes the wrong way.
- Q4 operating margin – 0.30% – the rounding error that filed taxes.
- Q4 net profit – ₹1.36 Cr, down 68.5% – two crore of that quarter was other income from selling financial instruments, management said; remove it and the operating business barely showed up.
- Own-brand stockouts – peaked above 33%, now 14.6% – management put the normal level at 5–7%.
- Total income – ₹283 Cr – core grew 33%, management said, after ₹39 Cr of trading was shown the door.
- Operating cash flow – negative ₹27 Cr – the third straight negative year, per the cash flow statement.
- Stock P/E – 61.8 – the market pays 61.8x earnings, against an industry 36.8x.
3. Management’s Key Commentary
Dr Vikas Agarwal spent ninety minutes admitting things, which on an Indian SME call counts as an extreme sport. The quotes are his.
“We grew total income to 283 crores on continuing operations after deliberately exiting 39 crores of low margin trading.” (The ₹39 crore left voluntarily. Everyone agreed it was for the best.)
“Own brand stockouts pulled our gross margins from around 34% to 23.7% by Q4… and I own that, these are operational issues not structural ones.” (Operational, not structural — the line every management reaches for the moment the structure starts wobbling.)
“The stockouts went upwards of 33% in own brands at one point of time and now we are at 14.6%, that is still higher than usual. The usual is 5 to 7%.” (So the high-margin products were the ones missing. The shelf optimised for profit by being empty.)
“Earlier calls or guidance showed our immaturity on how to handle the capital markets… I just want to have a NorthStar of doubling on the top line every 3 to four years.” (Last year’s ₹500–600 crore guidance has been reclassified as youthful indiscretion.)
“The EBITDA margin falling at such levels in last quarter or last financial year was according to us a one-off and it is not something structural.” (One-off, spread tidily across two consecutive quarters.)
“I am at a level 6.5 or 7. I have to work hard on my supply chain and my leadership of supply chain in future.” (A self-graded supply chain. Generous markers would have
