Lincoln Pharmaceuticals Limited — Q3 FY26 earnings call

Call held 23 Feb 2026

Management summary

Lincoln Pharmaceuticals reported a strong Q3 FY26, with double-digit growth in revenue, EBITDA, and net profit, driven by existing facilities and initial contributions from the Cepha block. The company is actively expanding its product portfolio, investing in a dedicated R&D center, and pursuing regulated market approvals in Canada and EU. While maintaining ambitious growth and margin targets, management acknowledged geopolitical and currency-related challenges.

Highlights

  • Revenue for Q3 FY26 was INR 166.32 crores, a 13.49% increase from INR 146.55 crores in Q3 FY25.

  • EBITDA for Q3 FY26 grew 18.73% to INR 38.74 crores from INR 32.63 crores in Q3 FY25, with margins expanding by 102 bps to 23.29%.

  • Net Profit for Q3 FY26 rose 37.60% to INR 28.60 crores compared to INR 20.77 crores in Q3 FY25.

  • EPS for Q3 FY26 was INR 14.28, a 37.70% increase from INR 10.37 in Q3 FY25.

  • The Cepha block is expected to contribute INR 45 crores this year and target INR 90-100 crores by next year, eventually reaching INR 150 crores.

Concerns

  • The company's dividend payout has been negligible over the last few years, with management only stating they are 'thinking on to whether to revise or what to do'.

  • Geopolitical situations and currency fluctuations continue to cause 'minimum plus and minuses' in quarter-to-quarter results and can delay money remittance by 10-15 days.

  • The long-term revenue target of INR 1,000 crores might take an additional '5, 6 months here and there' beyond the initial timeline.

Key financials

2 periods

Headline

  • Revenue
    ₹166.32 Cr
    YoY +13.5%
  • EBITDA
    ₹38.74 Cr
    YoY +18.7%
  • EBITDA Margin
    23.3%
  • Net Profit
    ₹28.6 Cr
    YoY +37.6%
  • EPS
    ₹14.28
    YoY +37.7%

9M

  • FY26 EPS
    ₹38.07

What they filed

Q1 FY27: revenue up 14.9%, net profit up 28.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue161 147 168 154 163 +1%166 +13%187 +11%177 +15%
EBITDA28 24 27 24 25 −11%24 +0%25 −7%27 +13%
Net profit26 21 12 28 20 −23%29 +38%12 +0%36 +29%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Dedicated R&D center (special building)
    And also for that, we have already bought a special building, which we are about to finish up or it will start working within about 2 or 2.5 months. So it's a special dedicated R&D center will be there for the development of the new products. So that is one step, which we have done.
  • Debt Debt disclosed
    the reserve what we have is pretty good for us to develop as a debt-free company or not.
  • Liquidity Liquidity disclosed Company has substantial cash flow, with funds parked in mutual funds, FDs, and land, and also provides ICDs with secured assets, earning 10-12% returns.
    See, these loans and advances are either given to companies who are giving us which are -- a few of them are those kind of ICDs, which are giving us returns because we have substantial cash flow, which is already there in the company and we have to not have everything in the one basket. So a few, we have been giving it as ICD wherein secured assets or loans are being given to us. ... And we have parked even in the mutual funds and various other FD kinds of instruments also and even land is also there. So that's all in the books of the company only.

Guidance & targets

Revenue

  • Growth Pace Revenue · Ongoing · Medium confidence 12% to 18%
    So just to brief you with what we have done until now is, the company is growing at a reasonable pace of 12% to 18%. That's what we are targeting to grow at.

    — Munjal Patel, Whole Time Director

  • Long-term Revenue Target Revenue · FY28 (with 5-6 months delay) · Medium confidence INR 1,000 crores
    overall, our growth and the target for INR1,000 crores is still there, and we will achieve it anyhow. ... it might take 5, 6 months here and there, but we are still sticking to the number what we have in mind

    — Munjal Patel, Whole Time Director

  • Cepha Block Revenue Revenue · Next year · Medium confidence INR 90-100 crores

    From INR 45 crores (current) today

    our Cepha block, which is just contributing to 45 as of now, that will gradually our target is to achieve 150, but we will closely come to at least 90 to 100 by next year.

    — Munjal Patel, Whole Time Director

  • Cepha Block Revenue (Long-term) Revenue · Long-term · Low confidence INR 150 crores
    our Cepha block, which is just contributing to 45 as of now, that will gradually our target is to achieve 150

    — Munjal Patel, Whole Time Director

  • Canada Business Revenue Revenue · Down the line · Low confidence $10 million or $15 million

    From $4 million, $5 million (current) today

    it may cross even $10 million or $15 million down the line.

    — Munjal Patel, Whole Time Director

  • Existing Site Revenue Potential (excluding Cepha) Revenue · Ongoing · Medium confidence INR 750 crores to INR 800 crores
    So if I'm getting it correct, from here onwards, we can do around INR750 crores to INR800 crores with our existing base, obviously, keeping in mind all of the details that you mentioned.

    — Rudraksh Raheja, ithought Financial Consulting (summarizing Munjal Patel)

  • FY27 Growth Revenue · FY27 · High confidence 15% to 18%
    Next year, we -- as I told you, we will be somewhere between 15% to 18% that is guaranteed. Might be we cross above that also.

    — Munjal Patel, Whole Time Director

R&D Spend

  • R&D Expenses as % of Revenue R&D Spend · Ongoing · Medium confidence 3% or 3.2% or 3.25%

    From 1.8% to 2% today

    As of now, our R&D expenses roughly comes to around 1.8% to 2%. But with this aggressive planning, what we are trying to do is we are we might come up to 3% or 3.2% or 3.25%.

    — Munjal Patel, Whole Time Director

  • Annual Spend on Registrations/BE Study R&D Spend · Every year · High confidence INR 5 crores to INR 7 crores
    Every year we are targeting somewhere between INR5 crores to INR7 crores of -- in terms of registrations, BE study, that is what we are targeting.

    — Munjal Patel, Whole Time Director

Profitability

  • EBITDA Margin Profitability · Ongoing · Medium confidence 15% to 18%

    From 15% today

    Frankly telling you, to be on a secured side, I would say 15% would be ideal, but we might go up to between 15% to 18%. That's what we can expect.

    — Munjal Patel, Whole Time Director

Regulatory

  • TGA Approval Timeline Regulatory · Next year or so · Medium confidence Another year or so
    And that will be taking another year or so for us to start the TGA.

    — Munjal Patel, Whole Time Director

  • EU Reinspection Timeline Regulatory · Q1 FY27 · Medium confidence Mid of May, June
    So probably we can get it sometime in the mid of May, June some time.

    — Munjal Patel, Whole Time Director

Capacity

  • Existing Site Capacity Growth Capacity · Ongoing · Medium confidence 20%
    we can grow another 20% from the existing site when we use all the lines.

    — Munjal Patel, Whole Time Director

What to watch in Q4 FY26

Cepha block revenue contribution

Next year (FY27)
Current INR 45 crores (FY26 expected)
Target INR 90-100 crores

Why it matters

Cepha block is a key organic growth driver, and its ramp-up is crucial for achieving overall revenue targets.

our Cepha block, which is just contributing to 45 as of now, that will gradually our target is to achieve 150, but we will closely come to at least 90 to 100 by next year.

Risks & concerns

  • Geopolitical situation impacting results

    medium

    Geopolitical situations have caused 'minimum plus and minuses' in quarter-to-quarter results.

    Management acknowledged

  • Currency fluctuations and remittance delays in international markets

    medium

    Currency volatility can lead to remittance delays of 10-15 days, though no losses have been incurred so far.

    Management acknowledged

  • Industry trade barriers affecting future growth

    low

    Management noted that unforeseen trade barriers could impact future growth, especially when committing to targets.

    Management acknowledged

Q&A highlights

6 direct
Long-term target of INR 1,000 crores and sources of growth Direct
the growth which we are expecting will first come from the DG growth will come from the existing facility, wherein the new dossiers as well as the new products which we have launched and are being exhibited, will come from there. ... Secondly, our Cepha block, which is just contributing to 45 as of now, that will gradually our target is to achieve 150, but we will closely come to at least 90 to 100 by next year.

Clarifies the multi-pronged strategy (existing business, new products, Cepha block, regulated markets) to achieve the ambitious INR 1,000 crore revenue target.

Asked by Pranav Shikhare

Dividend payout policy Partial
we are giving the consistent dividend till now. We are thinking on to whether to revise or what to do. So that would be something, which we are discussing internally with the management.

Highlights that despite substantial cash flow, dividend payout has been negligible, and management is only 'thinking' about revision, indicating no immediate change.

Asked by Vikas

Nature of substantial loans and advances on the balance sheet Direct
these loans and advances are either given to companies who are giving us which are -- a few of them are those kind of ICDs, which are giving us returns because we have substantial cash flow... So a few, we have been giving it as ICD wherein secured assets or loans are being given to us. ... And we are getting returns, which are upwards of 10% to 12%.

Explains that these are secured ICDs and advances to suppliers for discounts, generating 10-12% returns, clarifying a balance sheet item for investors.

Asked by Vikas

Update on Canada, Australia, and EU business expansion Direct
in the Canadian business, we have already started with 15 or 17 products commercialized... contributing to this year, somewhere around about $4 million, $5 million of business roughly. ... it may cross even $10 million or $15 million down the line. ... EU is about to get reinspected... probably we can get it sometime in the mid of May, June some time.

Provides specific revenue figures for Canada and timelines for EU market entry, crucial for assessing international growth drivers.

Asked by Rudraksh Raheja

R&D expenses as a percentage of revenue and future outlook Direct
As of now, our R&D expenses roughly comes to around 1.8% to 2%. But with this aggressive planning, what we are trying to do is we are we might come up to 3% or 3.2% or 3.25%.

Indicates a planned increase in R&D investment, signaling focus on new product development and regulated market dossiers.

Asked by Meet Mehta

Breakdown of exports by geography (Africa, LatAm, regulated markets) Direct
Africa would be somewhere between 40%. ... Latin and Southeast Asia combined would be somewhere between 25%. Then another 15% would be the UNICEF, UN and other tender business. And the rest of the component would be Canada business.

Offers a clear geographical split of the company's export revenue, helping investors understand market concentration and diversification.

Asked by Pranav Shikhare

EBITDA margin comparison to peers and reasons for slightly lower margins Partial
we are expecting 15% as the bare minimum, and we might go to 18%, and we might even cross to, see, this all depends on the product mix and the seasonal aspect... branding is such an activity that everybody is trying, and we have to work a lot in terms of people, development skills of the people as well as the marketing team.

Addresses analyst concern about lower margins compared to peers, attributing it to product mix, seasonal aspects, and ongoing branding investments, while reiterating a target of 15-18%.

Asked by Saket Saurabh

Peak revenue potential from the current manufacturing base Direct
we can do around INR750 crores to INR800 crores with our existing base, obviously, keeping in mind all of the details that you mentioned. ... And this, you are excluding Cepha. So Cepha is another, which is already INR45 crores we are doing. It would be we are targeting 150 on that also.

Quantifies the revenue potential of existing facilities (INR 750-800 crores excluding Cepha) and highlights the additional capacity from the Cepha block, providing clarity on organic growth headroom.

Asked by Rudraksh Raheja

3 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

Lincoln Pharmaceuticals delivered a robust performance in Q3 FY26, with revenue reaching INR 166.32 crores, marking a 13.49% increase year-on-year from INR 146.55 crores in Q3 FY25. EBITDA grew by 18.73% to INR 38.74 crores, leading to an EBITDA margin of 23.29%, an expansion of 102 basis points. Net Profit saw a significant jump of 37.60% to INR 28.60 crores, and EPS for the quarter stood at INR 14.28, up 37.70% from INR 10.37 in the prior year period. The 9-month EPS for FY26 is INR 38.07, indicating strong year-to-date performance.

Strategic Growth Pillars & INR 1,000 Cr Target

The company is targeting a growth pace of 12% to 18% and remains committed to its long-term revenue target of INR 1,000 crores, though it might take an additional 5-6 months beyond the initial timeline. Growth is expected from existing facilities, new product launches, and the Cepha block, which is projected to contribute INR 45 crores this year and aims for INR 90-100 crores by next year, eventually reaching INR 150 crores. The existing manufacturing base, excluding the Cepha block, has a potential to generate INR 750-800 crores in revenue, with an additional 20% growth capacity.

International Market Expansion & Regulatory Progress

Lincoln Pharma is actively expanding its international footprint, with exports contributing significantly to revenue. The geographical breakdown of exports includes approximately 40% from Africa, 25% from Latin America and Southeast Asia combined, and 15% from UNICEF, UN, and other tender businesses, with the remainder from Canada. The Canadian business is currently generating $4-5 million from 15-17 commercialized products and is targeted to grow to $10-15 million. The company is also pursuing TGA approval, expected to take another year, and anticipates EU reinspection in mid-May or June, which is crucial for market entry.

R&D Investment & Product Development

The company is increasing its focus on R&D and product development, with current R&D expenses at 1.8% to 2% of revenue, targeted to increase to 3% to 3.25%. A new dedicated R&D center is expected to be operational within 2-2.5 months. Annually, Lincoln Pharmaceuticals plans to spend INR 5-7 crores on registrations and BE studies, aiming to expand its portfolio in niche therapeutic areas for both domestic and international regulated markets.

Profitability & Margin Outlook

Management aims to maintain EBITDA margins between 15% and 18%, considering 15% as an ideal baseline. The current Q3 FY26 EBITDA margin stands at 23.29%. The company's business model, primarily B2B in exports and direct sales in domestic markets, helps in managing outstanding payments and currency variations. While acknowledging that some peers have higher margins, management attributes their current levels to product mix, seasonal aspects, and ongoing branding investments.

Capital Allocation & Shareholder Returns

Lincoln Pharmaceuticals maintains a debt-free status and possesses substantial cash flow, which is strategically deployed in ICDs (earning 10-12% returns), mutual funds, and fixed deposits. The company is exploring inorganic growth opportunities to utilize these funds for exponential growth rather than higher dividend payouts. While a consistent dividend is paid, management is internally discussing whether to revise the payout. There are no plans for share buybacks, and promoter shareholding is expected to increase gradually as opportunities arise.

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