ICRA upgrades rating and outlook of Lincoln Pharmaceuticals Ltd

Lincoln Pharmaceuticals Ltd

ICRA has upgraded rating on long-term bank facilities to ICRA A and short-term facilities to ICRA A1 backed by steady growth in scale and margins and improvement in risk profile

22 February 2021:- The rating agency ICRA Ltd has upgraded ratings and outlook of Lincoln Pharmaceuticals Ltd.

ICRA has upgraded rating of company’s long-term bank loan facilities to ICRA A with stable outlook from ICRA A- and positive outlook. Short term bank loan facilities of the company were upgraded to ICRA A1 from ICRA A2+ earlier.

Rating agency in its report has stated that the upgrade in ratings takes into account the improvement in the group’s financial risk profile in FY2020 and 9MFY2021, backed by steady growth in scale and margins.

ICRA in its report stated that, Stable outlook on the [ICRA]A rating reflects ICRA’s opinion that the Group will continue to benefit from the extensive experience of its promoters in the pharmaceutical formulations industry and is likely to witness revenue growth in the near to medium term.

The revenue growth will be backed by stable demand conditions for its existing products in the domestic and semi regulated export market, planned venture into the regulated European market as well as the proposed launch of beta lactam products, for which the company proposes to set up a new unit.

“Our company is growing from strength to strength and delivering robust operational and financial performance while maintaining healthy growth in revenue, margins and profitability and expects to continue the growth momentum in the coming years.

Our strategic growth initiatives, product and geographical expansion, EU approval, operational efficiency are likely to maximise value for all stakeholders in the near to medium term.

Upgrade by ICRA for company’s long-term and short-term ratings further testifies the strong foundation of the group,” said Mr. Mahendra Patel, Managing Director, Lincoln Pharmaceuticals Limited.

ICRA report also states that, Group has no long-term debt outstanding as on September 30, 2020. Healthy profitability and limited capex outgo have improved the coverage indicators and liquidity, resulting in healthy built up of free cash/liquid investments.

During the FY20, company paid all its outstanding debt to the Financial Institution and now it has become a zero net-debt company.

Company has received EU approval and plans to enter the EU markets very soon with its dermatology, gastro and pain management products. Company currently exports to more than 60 countries and plans to expand to 90 plus countries.

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For the nine months ended December 2020, the company has posted a net profit of Rs. 48.6 crore as against net profit of Rs. 40.3 crore, growth of 20.7%. Net revenue also grew by 10% Y-o-Y to Rs. 339.8 crore in nine months ended December 2020.