Angel One Buys Lincoln Pharma: 39% Upside Potential

Angel One has initiated a ‘Buy’ rating for Ahmedabad-based Lincoln Pharmaceuticals, setting a target price of Rs 845. This recommendation projects a significant 39% upside from its current price of Rs 610.

This positive outlook for Lincoln Pharmaceuticals comes as the broader Indian pharmaceutical industry navigates global headwinds. The sector faces pressures from international trade disruptions, stringent regulatory requirements, and escalating operational costs.

Financial Performance & Outlook

Lincoln Pharmaceuticals demonstrated robust performance in the first quarter of FY27. Consolidated net profit climbed 30.9% year-on-year to Rs 36 crore, while total income for the quarter rose by 19% to Rs 202 crore. EBITDA also saw a 32% increase, reaching Rs 52 crore.

Angel One projects that Lincoln will sustain double-digit growth, expecting revenues to hit Rs 1,000 crore within the next three years. The brokerage firm anticipates EBITDA margins will remain stable at approximately 19-20% during FY27-FY29.

Strategic Growth & Identified Risks

The brokerage’s confidence in Lincoln Pharmaceuticals stems from its anticipated expansion into export markets and a strategic pivot towards higher-value medicinal products. The company currently exports to over 60 countries and aims to broaden its reach to approximately 90 countries.

This expansion is bolstered by recent TGA Australia and EU-GMP approvals, crucial for entering regulated markets. India’s pharmaceutical exports surpassed $31 billion in FY26, highlighting the sector’s export opportunities despite challenges.

Despite the optimistic forecast, Angel One has highlighted several risks. These include rising costs for raw materials and employees, a degree of reliance on other income sources, and the company’s historical trend of modest sales and earnings growth. A portion of the recent profit surge was also attributable to other income, as noted by the brokerage.

For the broader Indian pharma sector, the prevailing strategy involves diversifying export destinations and focusing on higher-value, regulated markets. This approach aims to mitigate the impact of increasing global competition and trade-related risks.