In conversation with Mahendra Patel, Managing Director of Lincoln Pharmaceuticals Ltd

We anticipate stronger growth through our upcoming product launches in domestic and export markets, improved operational efficiency, and the introduction of higher-margin products, articulates Mahendra Patel, Managing Director of Lincoln Pharmaceuticals Ltd.

In Q3FY24, Lincoln Pharmaceuticals reported a 29 per cent jump in net profit on a YoY basis. What were the contributing factors to the company’s stellar performance? 

The company has continued to demonstrate impressive operational and financial prowess over the years. During nine months of the current fiscal FY24, the company beat its past growth numbers with Y-o-Y growth of 11.8 per cent in revenue, 19.6 per cent in EBITDA and 23.8 per cent in Net Profit. It surpassed PBT of Rs 100 crore during 9M FY24 which it reported for the full of FY23.

We reported strong growth across all business segments during Q3 and nine months of FY24 on the back of strong growth from Domestic and Export markets along with robust operating efficiency and the introduction of high-margin products. A strong liquidity position, supported by healthy cash accruals, no-term debt, and healthy return ratios has helped the company to better its growth numbers.

Could you provide an update on the recent expansion of the Cephalosporin plant in Mehsana, Gujarat, and its impact on production capacity and sales projections?

In September 2021, Lincoln Pharmaceuticals acquired the Cephalosporin plant in Mehsana and over the period company invested in capacity expansion as well as product registration. The plant aims to cater to all the Cephalosporin products i.e. Tablet, Capsule, Dry syrup and Injectable. The plant today is certified by WHO-GMP Certified; ISO9001:2015; ISO-14001:2015 and ISO-45001:2018 with an approved team of over 10 scientists for R&D. The plant will cater to all the Cephalosporin products i.e. Tablet, Capsule, Dry Syrup, Dry powder injection.

The company has recently finished expanding its Cephalosporin plant in Mehsana, Gujarat, and has started commercial production. It aims to register the product for export to multiple countries, expecting sales of around Rs 150 crore in the next 3 years.

What is the future outlook for the company going forward?

Over the last 5 years, the company has delivered a 16 per cent CAGR in profits and higher single-digit growth in sales. It has been successful in increasing its profit margins from around 9.9 per cent in FY18 to over 14.9 per cent in FY23.

We anticipate even stronger growth in the future through upcoming product launches in domestic and export markets, improved operational efficiency, and the introduction of higher-margin products. With our steadfast growth strategies, expansion plans for products and markets, and focus on operational efficiency, we are targeting revenue of Rs 750 crore in FY26.

The company is also ranked among very few companies (Top 16 out of 4,200 plus listed companies in the Indian stock exchange) to achieve a profit growth every single year from FY13 to FY23 as per the analysis of Morningstar. During the decade, the company has delivered a robust CAGR of over 22 per cent in Net profits, 19 per cent plus in EBITDA and over 10 per cent in Revenue.

Can you elaborate on the company's recent emphasis on innovation and expansion, particularly regarding the development of new products and their stages of development?

Lincoln Pharmaceuticals' key strength is embedded in its cutting-edge research and development capabilities. The company has a strong R&D team including 30 plus scientists. It has filled 25-plus patent applications and has been awarded seven patents.

The company's emphasis on innovation and expansion is evident with an impressive portfolio of over 1,700 registered products and an additional 700 in various stages of development. In FY24, the company aims to strengthen its portfolio in lifestyle, chronic, women's healthcare, and dermatology segments, complementing its established presence in acute care. In FY23, it introduced 18 products domestically and submitted 130+ export dossiers.

The company invests’ a sizable amount in R&D, product development and innovation and has following NDDS formulations introduced First time in India to its credit.

• Anti-Fungal Vagina Spray. 
• Diclofenac Rectal Spray.
• Sildenafil Oral Spray.
• Ondansetron Hydrochloride Oral Spray (DOMI-UP). 
• Paracetamol 1000mg Programmed Release Tablet (PA-12). 
• Micronized Progesterone Vaginal Spray (PROLIN).
• Namcold DX Oral Suspension.
• First one to introduce TINNEX for the relief of Tinnitus.

R&D facility of the company is recognised by the Department of Scientific and Technology, Government of India and furnished with state-of-the-art devices and equipment for internal physical, chemical and microbiological analysis of all products.

What are your top 3 strategic priorities?

Going forward, we will continue to invest in new product development, exploring new markets and strengthening our position in the established markets along with expanding the product basket. We want to continue our expansion while maintaining our net debt-free status in the coming years. Strengthening position in the European Union, Canada, and Australia markets and building a strong product portfolio of Cephalosporin will be key priorities in the coming time.

The company has crafted 600+ formulations across 15 therapeutic areas, boasting a robust brand lineup in areas such as anti-infective, respiratory, gynaecology, cardio & CNS, anti-bacterial, anti-diabetic, and anti-malaria. We currently export to 60+ countries.

The company has finished expanding its Cephalosporin plant in Mehsana, Gujarat, and has started commercial production. It aims to register the product for export to multiple countries, expecting sales of around Rs 150 crore in the next 3 years.