Prevest DenPro awarded with MDSAP certification - another milestone achieved
Prevest DenPro is pleased to announce that it has received certification for the successful completion of a Quality Management System audit under the Medical Device Single Audit Program (MDSAP). Prevest DenPro is the 1st Indian dental company to qualify for MDSAP Certification. This accomplishment exemplifies Prevest ability to provide safe and effective medical devices that consistently meet the highest quality and safety standards for Prevest portfolio of dental materials.
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Follow Mr. Atul Modi on linkedin
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Some more second hand info from a practicing dentist in Ahmedabad - Prevest is seen as value for money for dental materials. No problem with quality and is lower cost so could cater to a different audience.
Re-enforced the opinion from another dentist on Prevest. Quality isnât something to be worried about, just value proposition to be articulated well. Which leads me to track their investment in sales & marketing going forward for triggers on organic growth.
Marketing Meet was organised at Prevest Denpro factory for interaction with all India sales team and to impart hands-on training.
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Prevest chose to declare results on quarterly basis. Q3 results will be published on 12th Feb.
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That is positive news --i hope they will continue confcalls as well
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Q3 Results Announced. Result looks good. Margins have also improved. Surpassed last yearâs sales within this yearâs 9 months.
Disc. Invested.
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December quarter result has been great. Looks like the company will do around 11 Rs. eps in FY2022.
The company has come out with investor presentations, and as per the presentation many new developments are likely to happen in next year-
- The Company is all set to mark footprints in the markets of USA, Canada and Brazil. The Company has obtained USFDA approval for five dental products and MDSAP certification.
- The Company is on verge to diversify into manufacturing of new line of products that will include hygiene products (sanitizers and disinfectants), oral hygiene products mouth
washes and mouth rinses), oral care products(medicated ointments, gels, and creams
for dental treatment) and bio-materials (bone grafting materials and membranes) and
the manufacturing facility will be fully operational in F.Y. 2022-23. - The Company has filed patent applications for two of its innovative products and further aims to secure patent rights for more products in the forthcoming years.
- R&D center will be fully operational by FY 2022-23.
The investor Presentation:
df9c3c0d-1165-4edf-b815-5557633d10e8.pdf (4.1 MB)
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Notes from Q3 FY22 concall (16th Feb):
- 2-Way Capex WIP
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For existing products (~100) - focused on dental treatment - modernizing facilities and hi-tech equipment - to get more from the existing 150MT capacity - Currently, Utilized at 85% - Capex to ensure capacity is sufficient for next 4-5 years - If capacity runs out, they will consider running 2 shifts (running 1 currently) to serve the demand
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For preventive dental care - New products (50) - valued added, higher margins - products such as dental disinfectants, bone grafting materials, mouth rinses etc. - Idea is to cover both treatment and preventive market - Not like your household Listerine, these are specialized dental products not made in India - to be operational by Q1/Q2 FY23
- Update on Exports & approvals
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Export sales in Q3 went up by 60% - faster growth than domestic market - Entered 5 new countries - Thrust markets for FY23 include US, Canada, Brazil, Australia and Saudi Arabia - Already made 66 lac of sales in Saudi after generating customer contacts from recent exhibitions
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Profitability to go up since these markets are pricier
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Dental products fall under medical device category from FDA perspective. Process is different from typical pharma USFDA approvals. Approval is provided for product and not plant. For plant, Quality mgmt. system (QMS) is reqd. that they have and got MDSAP certification for that - They got FDA approval for 5 products, awaiting approvals for 15 - Very few companies worldwide to have MDSAP certification - Our factory/facility is world class
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Will incrementally increase US portfolio - Each product approval is costly - Is not viable to set up office and marketing team in US with a small product portfolio - hence, will keep increasing the products
- Distribution
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Dealers want prevest to be a 1-stop shop - They donât want to run from one company to other for products - Hence, focused on increasing product portfolio even if not all are bestsellers - From our 100, say, 60 sell well and 40 are low performing but we donât want to discontinue the 40 and want to go to dealers with a big portfolio
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Exhibitions in export markets to connect with dealers/customers
- Margins
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Margins will continue to grow due to entry into pricier export markets + operating leverage - 40%+ EBITDA sustainable - cannot compare our dental products with pharma, these are valued added products - confident margins will continue to grow
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Why margins have gone up sharply in last 1 year - product mix has changed - moved towards higher value added products
- Organic vs. Inorganic growth, Contract mfg.?
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Will continue to grow organically - state of the art in-house R&D to be ready by Q1 FY23 - Improve existing & develop innovative portfolio - Thinking 10 years down the line for long term sustainability - Will be biggest dental research center in private sector, India - Earlier, we had talent but we lack infrastructure for R&D - About team: highly qualified dental professional with 16 yrs experience, director of research activities; 2 other scientists - but no infra and equipment - now, we have to invest in the future - whatever product we are selling we have developed in-house with very limited R&D available in past
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Contract mfg. not an option since the formulations are trade secrets and we donât want to disclose
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No opptys for inorganic growth in India since there is no company of our standard - Internationally, if we land on a good opportunity, we will consider it - We are developing Indiaâs best dental care R&D center - We are growing on our own strength
- Top products - dental composite filling materials - dental cements - Liners - Orthodontics (restoration of teeth) - Prosthodontics - These are the products we are starting with in US market
Feel free to add any missing points.
Disc: Invested and biased. Not an investment advice. Pls do your own research. Not a SEBI registered advisor
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Have got a Scuttle Research on Prevest Denpro through a Dentist Himself , He says that prevestâs products are great and he has used 2 of their products
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Hi i too did today . But got to know that most dentist prescribe the brandâs from US & other companies. Even some companies are rebranding Chinese med and reselling in India Another is that PD is setting up RND now. And they are talking too much about QMS and quality which i believe is not that stringent in Dental products. And their margins are true what they claim.
Iam a practising dentist I had a look at the inventory and prevest products are slowly increasing thier presence in low value non critical applications ,like etchants,temp fillings,solvents, haemostats ,edta,hf acid etc less than 300 rupees per item mostly replacing the western costly or cheap chineese rebranded stuff .but high cost items more than 1500 rs or critical application items like permanent fillings or composites most dentist stick to Japan or German or usa brands ,some rural practitioners might use these products because of low cost but long-term performance is not yet established .I have talked to dealers about the company last month seems they are promoting well and offering good margins to them
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Thanks for the scuttlebutt. If they are not popular in domestic market for high ticket or critical products, then how come their exports market is growing? And the USFDA approvals. Is that too on non-critical applications? TIA
Disc - Invested
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On scuttlebutt part --we need to understand if some practicing Dentist has used their critical products in domestic market and is not happy with outcome
that may put lot of questions to rest and give us investors a direction
I see dental market will keep on growing and if the company focuses well on brand perception with kind of quality they claim, soon it can capture market share.
even if market share remains constant, market itself will be growing
so of quality is satisfactory for products, there is less to lose and more to gain
P.S. Invested and biasedânot a recommendation to buy or sell
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I looked at thier annual report and saw nothing related to break up of revenue from different applications .
Us and Europe products are priced 5x that of Indian and Chinese products so may be some other countries are finding them cheap and mostly 7 products I used are good quality and I donât find any difference to other good brands .
High value items like composites or cements are cutting edge products using nanotechnology and we donât need to buy them often and they should be reliable in patients mouth for years so we tend to stick to established brands .even the market there is too crowded 3M,ivoclor,GC,VOCO,TOKUYAMA
Composite kit from 3M ,GC, etc is 10- 15 K+
prevest ones are 2-4 k
Low cost items are extremely provitable( picks and shovels of dentistry )
Take etchant 2 ml phosphoric acid is 200 rs (1 kg is less than 100 rs )
Hf acid 5ml is 1000 ra (1 litre is 100 rs)
Edta 15 ml 200rs (1 kg is 150 rs)
Same goes for everything highly provitable and gets depleted rapidly and often mixed with gels for application purpose and 2 ml is syringes with brand sticker
Where we donât use new brands is
High cost glues are 5000 per 5 ml
Cements 15gms cost 3000 rupees
Composites 4gm syringes cost from 600- 5000 rs extremely tough market to break into lot of competition and brand familiarity from long time(even mentioned in textbooks I read 20 years ago ) and fear of failures
Couldnât invest because because of 1600 lot size too big for my portfolio
Seeing the company for 5 years plus in market surprised to see them in listing
No Indian dental company is listed
They could easily enter other divisions of materials and replace all kind of disposable items or low cost items from western brands
Recently some of our fav western brands are going out of business in India or discontinued some products due to very low bussiness
Only competition is rebranded chineese and some Korean brands( some ecommerce dental sites like dentalkart and pinkblue are offering these products with thier own branding ) which are also priced the same .overal favorable factors huge upside very low risk but everything depends on management execution and honesty
They have subsidiaries which they buy raw materials from
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Great insight @shiva_krishna
I was going through investor presentation of Envista and the likes. Their GMs are 50%+ and operating margins are 18-22%. Prevest is doing 40% Op margins. Though not directly comparable since MNC product line includes dental equipment and high ticket products; but still not able to wrap my head around this difference in Op margins.
I only have more questions to throw:
- Why is the profitability so high? Are there inherent advantages in operating with these non-critical, essentially commodity like products?
- And If there is no competitive edge, wonât this lead to a price war in future?
- Success criteria for a price war would be âacceptanceâ of cheaper/newer brands by dentists. You gave example of rebranded chinese and korean brands. What is your viewpoint on these brands undercutting prevest in future? Is their a first mover or home turf advantage?
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