3rd point, slight correction - they said they haven’t thought about contract manufacturing, but open to it “If” an oppty comes
thanks for notifying the error. yeah, management is doing private labelling for 2 potential customers. still trial orders going on
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The company has incorporated a 100% subsidiary in the name of Denvisio Biomed Limited. Main objects of the company are;
- To carry on the business of Sales, Marketing, distribution, trading, and manufacturing and providing Consultancy of and for Dental, Medical, Surgical Devices, Instruments and Equipments, Dental materials etc.
- To import, Export and to act as consignor, consignee, or agent to sell Dental, Medical, Surgical Devices, Instruments and Equipment’s, Dental materials etc. for self or others on principal-to principal basis or otherwise.
8d1a7173-87de-49d6-8204-242ff7d0762d.pdf (1.9 MB)
It looks like that the company is interested in entering a trading business in dental products.
Something like Dentalkart?
My understand is management may be formed this subsidiary to sell the products from upcoming division due to tax benefits.
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Do we have any thread on DentalKart aka Vasa Dentacity, can someone do a comparison between DentalKart and Prevest Denpro.
As far as i know dentalkart is in trading business. Prevest is manufacturing dental products.
Comparing dentalkart vs prevest is like comparing dmart vs hindustan Unilever…
This is my thoughts. Feel free to correct me if i am wrong.
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Got it, thanks. But prevest is having an e-commerce portal and is selling products from other manufacturers too.
That is correct. Recently they incorporated a subsidiary Denvision Biomed Limited to enter into trading business. Thus, it is possible they create a e-commerce business like Dentalkart (Vasa Dinticity Limited). With decent cash flow from the manufacturing business, they may become a decent player in that space.
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Now we need a comparison, is there any other notable listed or unlisted competitors for these two companies?
The space is crowded. Presently pinkblue.in; Dentmark, Dentalstall, Dentalbasket, Dentalprod… there are many online stores. There does not appear to be much advantage to any one player. Dental products being standardized, it is easy to create such stores.
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Prevest has come out with subdued numbers, a topline of 13.4 crores with a net profit of 4.08 crores. The figures are slightly lower than March 2023 quarter, and slightly better than June 2022 quarter.
The company has also proposed a maiden dividend of 10%.
PrevestQ12024_compressed.pdf (1.1 MB)
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Cfo is also promoter
Hi @Surender, I was just going through this thread for the first time. I found your observations both insightful and alarming. Since the time you posted them, have you had a chance to get clarifications on these or have there been any updates from the company on these and other fronts.
@prabhaker.panditi : I tracked the business for some more time and had 2 additional observations:
- Owner Operators (MD and CFO - The Promoters) introduced son-in-law as the super marketing manager, who sounded ill-prepared for that outing as well as the role play.
- I inferred from the pictures that all the outside India marketing events have CFO alongside MD. CFO , who is MD’s wife, does not seem to be a right person for such events.
Post that, I stopped tracking.
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Why this should be an alarm? Small companies are mom and pop stores; with family people sitting at top positions. If company is able to scale then management structure will change.
Note: Not invested in Prevest, but tracking if they manage to get orders from USA
Prevest does not make implants. They did say in their concall that they are looking to make implants. Currently there are two Indian companies making implants. One is the promoter of Micro Inks and the other is a joint venture between DRDO and Maulana Azad which has now been sold to a private company.
As a 15 year practising dentist, there were no prevest products in my clinic and I called the biggest distributor of our town, he doesn’t stock their products. I got interested in the company because one of my dentist friends who does research for them was raving about one of their high value products used in root canals. The products as of now sold by prevest do not significantly impact treatment costs except one or two procedures like fillings. But their research wing is pretty strong and the market is quite underpenetrated by Indian companies.
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Gone through the conference call today.It seems that the major issue is with their sales team and mindset of the company.
Reasons for this conclusion :
a) As per them Indian TAM is 1000 crores , growing at 8-10% per annum . They’re not able to tap more than 2-3% of domestic market share after so many years !
b) They are tapping lot of countries globally …it is difficult to undertand why they should go out when there is big local opportunity. This leads to spreading your marketing and sales resources too thin
c)As per the same co-call, global market size is US $ 20 Billion, and they sell hardly 3 million $of product in gloable markets. With a less than 1% market share, the reason given for poor glabal sales growth given is recession. It is really a lame excuse.
It is like a stutent who who always used to egt 2 out of 100 marks in an exams . Once he happens to get 1 out of 100 , his excuse to his parentswas that the question-paper was tough this year !
The company seems to have a lot of potential as well as big TAM ,but tthe growth would be lacklsutre with current mindset .
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It’s important to understand that we dentists generally do not purchase dental materials from Amazon, and the price of materials shown on Amazon vs what we get from distributors is pretty different. Yes few of us buy from dentalkart and pinkblue but majority of sales are local distributor driven.
There are 2 reasons for it chiefly. One, a lot of small clinics (60-75 percent of all clinics) do not show a lot of income in their bank statements, and hence purchase through local dealers to pay them in cash. Most dealers can’t buy in cash from bigger distributors so the sales will ultimately reflect but this causes a lot of price cuts in products. Two, A lot of dentists stock up in expos for the year where everything is purchased in cash. And prevest is targeting the economy segment where majority of these trades happen. The point I am making is, big sales can only happen if big local dealers push their products and there should be a number of company salespeople visiting dentists asking them to write the company products. Prevest has a very small sales team doing door to door visits.
Dentists are not incentivised to use any company products (which is a GREAT thing) because there are no prescriptions and no direct sales to patients. They use the ones they like and can afford depending on price points they charge from patients. Hence it’s difficult to get people to change the products they are used to.
Lastly, the companies Prevest mentioned in their DRHP are not their direct competitors. Most of them, except 3M, do not sell resins and sealers etc that are the bigger market of Prevest. Their competition would be pidilite which has entered the same market with a collaboration, has aggressive sales and marketing teams and has kept same stockists and dealers that are with the multi nationals.
A clue as to how the company is targeting increasing local sales can come from the number of salespeople on their roll call. I do not know how to look that up or find their info but that number should be increasing.
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Hi @Surender , I think every small business is reflection of owners-promoters. In this case it seems that Mr. Modi is the only driving force. Mrs Modi seems to be CFO more because of being a wife of Mr. Modi.
But having said that, for me that was - succession and continuity of business was one of a big risk that whether their next generation would be interested in the business or not. I think the age of Mr. Modi is more than 65.
In my perspective, it reduces a risk (what if something happens to Mr. Modi) for me as investor when his son in law joined business as marketing head/director. Also his son in law seems to be the experienced person suited for the job.
The only thing bothering me is while marketing is a critical and core operation for any business, why they want to delegate that function to their wholly owned newly formed subsidiary? Why to add complexity of structure and bother managing compliances for 2 firms ? Why not to give required push to marketing within the parent firm ?
Thanks,
Pankit
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