Lincoln Pharmaceuticals Limited

Transcription

1 25 January 2016 CMP: Rs Industry: Healthcare BSE Group/Index: B/ Promoters Patel family Year of incorporation 1995 Registered office Lincoln House, B/h Satyam Complex, Science City Road, Viilage Sola, Ahmedabad, Gujarat Company website Write to us at: Key Data (as on 23 Dec 15) BSE code ISIN INE405C01035 Face Value (Rs.) 10.0 Mkt Cap (Rs.mn) 3,580.2 Current P/E 19.9 Current P/BV week highlow (Rs.) day avg. daily trading vol. (shares) 661,044 Equity capital (Rs.mn) Net worth (Rs.mn) 1,113.1 Company Business Lincoln Pharmaceuticals Limited (LPL) manufactures, markets, and exports pharmaceutical products in India and internationally. The company s product categories include antimalarial, antibiotics, antibactarials, analgesics, antiinflammatory, antipyretics, antihypertensives, antifungal, antacids, antiulcers, anthelmintics, anticold, antiallergic, antiasthmatics, antiemetics, gastrointestinalagents, antidiarrhoeals, antispasmodics, and probiotics, as well as cardiac and diuretic products. It also provides creams, ointments, antiinfectives, vitamins, minerals, and ironpreparations. In addition, the company trades finished goods, chemicals products, and bulk drugs. The company was founded in 1979 and is based in Ahmedabad, India. Peer group analysis LPL s operating margin is in line with that of its peers. However, LPL s net margin is comparatively lower than that of Anuh Pharma Limited because of LPL s interest burden. Financials Standalone Particulars (FY15, Rs.mn) Lincoln Pharmaceuticals Anuh Pharma Parenteral Drugs (India) Wanbury Total Income 2, , , ,611.6 EBITDA EBITDA margin (%) PAT (676.6) 32.0 PAT margin (%) EPS (Rs.) (22.7) 1.6 Cash accruals (366.8) 80.0 Debt/EBITDA (x) Debt/Equity (x) (1.8) ROANW (%) (46.7) ROACE (%) (2.0) 16.0 P/E (TTM) 19.9 P/BV (TTM) Peers based on industry Page 1 of 5

2 Share Price Performance Change in Shareholding Pattern (%) 395.9% As on Promoters DII FII Others 30Sep Jun % 31Mar Yr0.9% 40.1% 3 Yr 31Mar14 31Mar Mar13 31Mar Lincoln Pharmaceuticals S&P BSE 500 Top Public Shareholders with >1% shareholding Sl. No. Name of the Shareholder No. of Shares held Shares as % of Total No. of Shares 1 Digital Biotech Pvt Ltd Vraj Dyes And Drugs Pvt Ltd Advent Tradelink Pvt Ltd Sharad Kanayalal Shah Total Page 2 of 5

3 Key strengths and opportunities Diversified offering portfolio with products in various therapeutic segments. LPL has a flexible manufacturing infrastructure which enables the company to expand its product range and change its product mix in response to change in customer demand. Wide geographic reach as the company has presence in 40 countries across South America, Africa, and Asia. This would protect the company from any downturn or sluggishness in the economic growth of a specific country or region in the world. Key concerns and risks Fluctuation in the value of the rupee against foreign currencies can have impact on the earnings of the company. In FY15, exports constituted 36% of the total revenue and import of raw materials constituted 28% of raw materials purchased. As the company is a global player, it faces competition from the local players as well as from other similar companies in other emerging markets. The Indian pharmaceuticals industry is vulnerable to policy changes initiated by various governments across various jurisdictions. Any adverse changes by foreign regimes will impact the supply demand equation for India s pharmaceutical industry. The company needs to be constantly working on innovation or R&D to develop new drugs or provide product mix or launch new products to survive in the growing pharmaceutical market and face competition. In India, the government has controlled the price of certain drugs. From 15 May 2013, the government has implemented the Drug Policy Control Order (DPCO) 2013 by the New Pharmaceutical Pricing Authority (NPPA), which put a cap on the prices of 348 essential drugs. This might have impact on the margins of the pharmaceutical companies. Global pharmaceutical industry Indian pharmaceutical industry Industry overview IMS Health predicts that the global spending on medicines will reach to almost USD 1.2 trillion by With the medical awareness, emphasis on universal medical coverage, ensured access to medicines and healthcare, the industry is expected to grow over the years to come. With patent expiry approaching for certain drugs, availability of reasonably priced generics would also contribute to some realization. The future of the industry lies in innovations in new and conducive medicines. The Indian pharmaceutical industry, sized at USD 36.8 billion in , has remained on a strong growth trajectory, over the past few years. Over the last decade, the industry has emerged as a major player in generic pharmaceutical production and now supplies around 20% of the global market for generic medicines. India ranks third in terms of volume of production and 14 th by value. In India, cost of drugs is lower compared to developed markets. The top five destinations for Indian pharmaceutical products are USA, Germany, Russia, UK and China. Page 3 of 5

4 Quarterly results Particulars (Rs. in mn) Jul'15 to Sep'15 Jul'14 to Sep'14 % Change 1 Apr'15 to Jun'15 % Change 2 Total income Total expenditure EBITDA PBT PAT EPS (Rs.) compared to corresponding quarter in the previous year 2 sequential comparison Book Value per share Key ratios Book Value per share (Rs.) Dividend per share (Rs.) EPS (Rs.) Mar13 31Mar14 31Mar15 31Mar13 31Mar14 31Mar15 Profitablity Leverage ratios RONW (%) ROCE (%) Debt/EBITDA (x) Debt/Networth (x) Mar13 31Mar14 31Mar15 31Mar13 31Mar14 31Mar15 Page 4 of 5

5 Financials P&L (Rs. mn) FY13 FY14 FY15 Balance sheet (Rs. mn) FY13 FY14 FY15 Total income 2, , ,732.6 Share capital EBITDA Share application money EBITDA margin (%) Reserves & surplus Depreciation Net worth ,113.1 EBIT Borrowings Interest Current liabilities & provisions PBT Total liabilities 2, , ,533.9 Tax Net fixed assets PAT Capital WIP PAT margin (%) Investments Dividend Inventories Dividend payout (%) Sundry debtors ,190.1 Cash & bank Cash flow (Rs.mn) FY13 FY14 FY15 Other current assets PBT Loans and Advances CF from operations (156.0) Miscellaneous Expenses not w/off CF from investment (162.7) Deferred tax assets/(liabilities) (47.5) (39.7) (46.4) CF from financing (105.1) (320.4) Total assets 2, , ,533.9 Inc/(dec) cash (25.7) (44.2) (9.6) Closing balance Disclaimer The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate or complete and it should not be relied on as such. Our company shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation which may affect their investment in the securities of companies referred to in this document (including the merits and risks involved). The discussions or views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. Page 5 of 5