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

Stock Opportunities Untested - but worth a good look
225

Concall notes for this quarter, they are expecting faster growth going forward with improvement in margins.

FY24Q4 Lincoln concall

  • Expect to grow sales by 15-18% CAGR and reach 1000 cr. in 3-4 years at 20-22% EBITDA margins

  • Export

    • Present in 60 countries. Strong presence in East Africa followed by West Africa, Latam, Southeast Asia

    • Transitioned from B2B to branded generics in 2021, and focus is now on generating prescriptions through doctor-MR

    • Have 30-35 MRs

    • 1500+ registration; 750 pipeline

    • Focus is to grow exports to Canada, Australia and Europe

    • Commercialized 4 products in Canada (19 filed)

  • Domestic

    • Present in 13-15 states; top 3 are Uttar Pradesh, Assam, Odisha

    • Were earlier present in Tier 3 cities and now are increasing presence in Tier 2 and Tier 1 cities

    • 600 MRs which should increase by 150-200 in next 2 years as they expand to more states

    • Strong in ENT segment (Tinnex brand)

    • Entire sales are through prescriptions (branded generic)

    • 20% portfolio under NLEM

    • Launched 20-23 products in FY24

  • Cephalosporin

    • Plant was commercialized, injectable block has been implemented. Have WHO approvals and filed products

    • Expect 55-65 cr. in FY25

    • At full utilization, can reach 220-230 cr. revenues depending on final product prices

    • Also servicing Indian market from this unit

  • Capex

    • Invested 100 cr.+ via internal approvals in last 3-years

    • 25-30 cr. annual capex plans for next 2-years

    • Currently they have 17-18 lines, with 25 lines they can do 1200-1300 cr.

    • Solar capacity is now 4 MW (solar plant + rooftop solar). Will be saving on energy costs because of this

  • Related party loans

    • Loans and advances increased from 82 cr. to 104 cr.

    • Explained this as a way to do capex; current year increase was for the next big product (like they did cephalosporin couple of years back) and for getting into more regulated (and higher margins) markets such as US

  • Have not suffered from currency issues because of their B2B model where distributors arrange payments

  • Dermatology, cardiology, diabetes are the main growth focus, contribute 100-150 cr. (domestic + exports). Expect to grow 50% in FY25

  • Munjal Patel is looking after finance, exports and factory

Disclosure: Invested (position size here, bought shares in last-30 days)

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