LINCOLN PHARMACEUTICALS LTD - Quantamental Equity Research Report

Quantamental Equity Research on LINCOLN PHARMACEUTICALS LTD | Release: 08 Jan 2019 10:02:27 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:LINCOLN and BSE CODE:531633
Last Close:  INR 220.15
Fair Value:  INR 84.7
Est. Price by Mar 19:  INR 215.3
Market Capitalization (INR Crs):  440.30
Industry:  Pharmaceuticals
Rating:  NEUTRAL
Downside:  -2%
Company Profile
Lincoln Pharmaceuticals Limited (LPL) is engaged in the business of manufacturing, marketing and distribution of pharmaceutical products.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 0% 36% 48%  
EBIT % 17% 83% 169%  
Earnings % 23% 131% 258%  
Book Value %  17% 101% 151%  
Stock Total Return %  0% 178% 766%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 32.39  
(B) FII/FPI 0.57  
(C) DII/Insurance Companies 0.00  
(D) Public holding < 2 lakhs of cap. 22.40  
(E) Others 44.64  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 36 35 29 26 43 82 156 228 229 215 209 198 198 210  
Return on Equity 11% 5% 6% 11% 11% 13% 18% 15% 15% 16% 14% 11% 10% 10%  
Price to Earning  6.7 13.5 9.4 4.5 6.5 8.9 10.8 16.3 13.2 10.3 10.3 10.3 10.3 10.3  
EVTI 0.5 0.6 0.6 0.6 0.6 0.8 0.8 1.4 1.4 1.3 1.2 1.0 0.9 0.8  
EVTIFM 6.7 13.5 9.4 4.5 6.5 8.9 10.8 16.3 13.2 10.3 10.3 10.3 10.3 10.3  
Price to Book Value 0.8 0.7 0.6 0.5 0.7 1.2 1.9 2.4 2.0 1.6 1.4 1.2 1.1 1.0  
Debt to Equity  0.5 0.6 0.8 0.8 0.7 0.7 0.6 0.3 0.3 0.0 0.0 0.0 0.0 0.0  
Dividend Yield 3% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%  
Cash Flow to Firm -26% -28% -7% 2% 14% 4% 6% 2% 5% 23% 22% 23% 24% 24%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales          360.62          305.16          273.77          259.56          259.32          272.28  
EBITDA            57.77            74.02            66.41            62.96            62.90            66.05  
EBIT            51.66            68.85            61.47            58.24            58.39            61.73  
PBT            46.25            63.44            61.47            58.24            58.39            61.73  
NPAT            34.62            41.83            40.53            38.40            38.50            40.70  
Price to Earning             13.24            10.29            10.29            10.29            10.29            10.29  
Price to Book Value              2.04              1.64              1.39              1.18              1.07              1.03  
Debt to Equity               0.27                  -                    -                    -                    -                    -    
Return on Equity              0.15              0.16              0.14              0.11              0.10              0.10  
Enterprise Value to Total Income (EVTI)              1.39              1.32              1.23              1.04              0.89              0.80  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            15.21            10.75            10.01              8.48              7.27              6.50  
Price or Est. Share Prices          229.12          215.30          208.65          197.70          198.25          209.65  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT            63.44            61.47            58.24            58.39            61.73  
Interest              5.41                  -                    -                    -                    -    
Depreciation              5.17              4.94              4.72              4.51              4.31  
Cash Flow Before Tax            74.02            66.41            62.96            62.90            66.05  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax            48.86            43.84            41.56            41.52            43.60  
Terminal Cash Flow                                                                                      -              75.39  
Total Cash Flow            48.86            43.84            41.56            41.52          118.99  
Present Value of Cash Flow          169.33  
Debt                  -    
Value of Equity          169.33  
Fair Value Per Share            84.70  
Equity               440
Debt                 61
Beta Take from Reuters 1.76
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                   5
Tax Benefit                   1
Interest Net of Tax                   4
Debt                 61
Cost of Debt 7%
Cost of Equity 20%
Debt Weight 12%
Equity Weight 88%
WACC 19%
Cash Flow of Mar-23 E            43.60
Growth -2.3%
Present Value of Terminal Cashflow            75.39
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Ajanta Pharma        1,177.40          10,364          257.87            30.68            34.49              4.51            22.24              4.57            21.90                  -                    -              30.68            38.95            2,237            62.22                 94              6.48              0.69            18.53             -4.93          558.55
   2  ERIS Lifescience           667.30            9,177            74.14            50.09            35.35              8.49            26.39              9.00            31.98              0.44                  -              50.09            93.42            1,081            55.92               116              5.35              6.00            19.75             -8.13          186.59
   3  Caplin Point Lab           380.90            2,880            57.56            60.75            63.52              4.23            18.05              6.62            18.72                  -                0.53            54.41            88.91               651            69.05                 79              6.42            18.70            16.22            22.29          164.44
   4  Bliss GVS Pharma           166.20            1,714            58.71            41.71            29.04              1.72            22.54              2.83            16.57              0.22              0.60            34.39            29.53            1,013            60.16               103            11.25              0.95              8.19            21.98          103.38
   5  Lincoln Pharma.           220.15               440          125.86            34.27            19.12              1.11              9.61              1.75              8.90              0.27              0.68            31.30            28.65               428            32.39                 42              2.79            14.45             -6.66            32.74          264.63
   6  Hester Bios        1,159.50               986          184.99            34.38            26.26              5.85            24.56              6.27            28.09              0.29              0.86            24.81            24.76               171            54.09               102            11.19            10.55              2.58            12.08          414.56

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