Lincoln Pharma ... the next mid-cap pharma in the making ...?

Net-debt means debt adjusted for cash. After debt repayment, cash on the books is higher than the debt, hence net debt free.


Interesting management interview


809867be-fc7e-434d-b47f-eb912176e3f9.pdf (191.8 KB)
In this exchange filing Co i have read few days back Co is not sounding bullish in the first half. They are saying that there domestic market is impacted due to lockdown. Also stating that some price increases of end product due to increase in api prices. But in the interview they are giving growth guidence for the quarter. Am I not understanding something. If I am wrong plz guide. Thx in advance


Decent quarterly results.

Company has launched products to boost immunity.

Tracking for investment.



@ayushmit Hi Sir, good results from Lincoln pharma and now net debt free as well. Entering into EU market also. Cheap valuations. are you still tracking it? your views would be helpful. thanks

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Decent set of numbers Reported by Lincoln Pharma.

My interpretations based on Q1 results and management interview to CNBC TV-18:

  1. The percent of exports in revenue is growing. From 11% of total sales in FY13, it grew to 56% of total sales in FY20 to about 78% in Q1-FY21.
  2. Cost of materials consumed has gone from 21 cr to 27 cr YoY which is a jump of about 29%. Since sales have only gone up 7%, does this depict a reduction in pricing power for the company?
  3. Changes In Inventories of Finished Goods, Stock-In trade and WIP has gone up from 1cr to 7cr. Not sure how to interpret this, but this potentially represents products for domestic sales which could not be sold due to suppressed demand due to covid-19.
  4. Total Revenue up 7%, Net profit and EPS up 23% YoY. Profits outpaced revenue growth mostly due to reduction in costs. For example, employee costs went down from 15cr to 13cr.
  5. Company has received EU GMP certification from Germany FDA and plans to start selling in EU sometime in this financial year.
  6. CNBC TV-18 anchors were upset with the management for guiding for 15-20% growth in Q1 and only achieving 7% growth. Mr patel tried to clarify that their anticipation of covid-impact was not accurate until now.
  7. Has guided for 25-50% revenue growth for rest of FY. My 2 cents are, small businesses face highest amount of uncertainty. Sometimes management might feel pressured to provide guidance. I would not take such guidance seriously.
  8. Vitamin C+Zinc tablets referenced above only expected contribute 10cr to topline. Total opportunity size in India is 150 cr.

All in all, would be exciting to see how the rest of the FY pans out for them and whether they can start adding serious top line growth based on exports to EU.

Disc: invested. Full portfolio here.


2019-20 Annual report Notes

On Covid-19 affecting the company

Coronavirus could have a moderate impact on the Company’s performance at least through the first half of financial year 2021.

Financial performance

Company achieved revenue of 376 cr as against 353 cr in the previous year. The PAT has increased to 50 cr on a standalone basis as against PAT of 47 cr in previous year representing growth rate of 6.3%

New product development

The Company manages the risk through careful market research for selection of new products, planning and continues monitoring. The company’s Research and Development (R&D) Department has developed many new Formulations. The Company has developed 600 plus formulations in 15 therapeutic areas and has a strong product/brand portfolio in anti-infective, respiratory system, gynaecology, cardio & CNS, anti-bacterial, ant-diabetic, anti-malaria among others. Company has a strong presence in the domestic market and also exports to more than 60 countries. With the EU certification, the company will expand its business network to 90 plus countries. Company has filled 25 plus patent applications and has been awarded with seven patents. For the next phase of growth, the company is building a strong portfolio in lifestyle and chronic segment especially women healthcare and dermatology to complement its strong presence in the acute segment. On the back of higher R&D, the company plans to launch many NDDS based products in India.

Number of National Locations

There is only one manufacturing unit, one R&D unit, and nineteen super stockiest across India. Company has a state-of-the-art manufacturing facility unit at Khatraj in Ahmedabad, Gujarat.


Total expenditure on R&D is 12 cr. This is ~3% of sales, down from ~4.2% in FY19.

Balance Sheet Statement

Trade Receivables have gone down by 12 cr (112 cr => 90cr). Also the breakup has become marginally better. Only 15% is considered to be high credit risk receivable in FY20 as against 21% in FY19.

Profit and Loss Statement

As the debt has gone down, credit costs (as a part of Expenses) has also come down (4cr => 2cr). Cost of materials consumed has gone up sharply by 25% (81cr => 101 cr). Given that total expenses have also gone up by ~ 24cr, this means the majority of expenses going up has been the cost of materials consumed. Revenue from operations has also gone up by ~23cr, which means that broadly speaking, the company was able to pass on the increase in cost of materials in terms of the pricing of their products.

Cash flow Statement

Largely due to a much better receivables position (and also in part due to better taxation), the net cash flow from operations has gone up by 40% from 50cr to 70cr.


Slow sales growth any concern here?

I would like to get some help in understanding the sales growth prospects as the CAGR in Sales is still negative from FY 2016 although the OPM is fairly good.


  1. Why is the topline not growing?
    2.Are there any markers that points to increased sales growth in future

Other metrics like OPM, debt, cashflows look good but I doubt if i can be bullish on the stock for next 2-3 years unless there is an increase in the topline growth?

  1. Revenue till FY 16 was from
    a. Selling of own brand
    b. Contract manufacture at its units
  2. Since FY17, they started to Defocus from Contract manufacturing and by FY18 they were totally out of it. This resulted in a decline in topline in FY 17, which later seems to pick pace.

P.S: I am not a professional analyst. I have been tracking this company and reading last 5 years AR. This is what i understood. Hope this Helps !! Regards


Lincoln Pharma gave good quarterly results. Margins were driven by higher gross margins and lower employee cost, other expenses were on a bit higher side.

  • Sales growth of 9.56% yoy.

  • PBT growth of 14% yoy.

  • Improvement in OPM from 22% to 24% yoy.

  • Highest quarterly PAT in last 12 qtrs.

  • Cash and equivalents of Rs. 104 cr as on 30.09.2020.

Harshit Goel


Its good to see now that Promoter bought around 1 Lakh share today… :slight_smile:


Promoters have bought another 1 lakh shares. So now approx 1% increment in promoter holding. :slight_smile:


Full English transcription of the interview with zee business March 2 2021

1 Like Promoters of Lincoln Pharma increases promoter group
holding by 4.9% during FY 20-21 to 37 .25%


Any one any idea about the recent massive surge in volume? Trying to break out all time high but retreated today. Guess the up ride is over? There were news that they were setting up the API plant. Any info on that? Further, still no clue on the business post EU approval in to regulated markets?


Lincoln Pharma Q4FY21 results update.
Godd results by the company.

  • 32% increase in PBT yoy from Rs. 11.53 cr to 15.31 cr despite 48% increase employee cost in the quarter.
  • Gross margins improved to 67% from 55% yoy and from 47% qoq.
  • Good operating cashflows for the year at Rs. 70 cr.
  • Cash and Liquid investments of Rs. 93 cr as on 31.03.2021.
  • Exports for the year at 64.40% in FY21 compared to 60% in FY20. Company is witnessing good traction in the export business, which is expected to get further boost once EU operations begins. Company plans to enter the EU markets in FY22 with its dermatology, gastro and pain management products. Company currently exports to more than 60 countries and plans to expand to 90 plus countries.
  • Going green, company has also set up a new Solar Plant of 1 MW at factory’s rooftop in addition to two windmills. This way we are producing renewable energy to our consumption nearly 65% resulting significant saving in the electricity cost and helped the company to become a self-sustainable and environment-friendly organization.

I recently came across this co. Although the npm and OPM margins are growings, topline growth is still sluggish. Positive that co became debt free and promoters increasing stake. but if sales growth is sluggish, the co would struggle in longer term.
On a side note, I checked the EU GMP website but I cannot find their approval for Lincoln pharma. Anyone knows how to verify that?


The promoters are increasing their stake. they bot 5% shareholding in Q4FY21 and in Q1 purchased 0.5% more. saw an interview of the MD recently where they are talking of exporting to europe and canada by Q3 FY22 and also doing capex of 35-40 cr. I think this the management is conservative and they are not going very aggressive on capex plans. Revenue growth has been stagnant in last 5 years but if exports to europe/canada pick up then we might see 10-15% increase in topline. They are also adding 150 ppl more to domestic sales force, increasing it to 800 ppl from 650.


the company has started exports to europe. first shipment happened in july. so finally they are exporting to europe, although the value is still small but this is a regulated market and the margins higher. further, they are very dependent on tanzania for their revenue, diversifying it to europe would derisk the revenue. hope that they start shipments to Canada soon.