Lincoln Pharma surges 20%; what's driving the stock up?

Investors placed bullish bets on Lincoln Pharma (LPL), riding on the company’s better prospects going forward. The stock rallied 20 percent intraday on Tuesday. Sunidhi Research is upbeat on the stock as it expects the company to clock healthy revenue growth in the next three years. It has recommended a buy call on the stock with a target prtice of Rs 277. Its current market price is at Rs 196 apiece. Product portfolioThe research house cites the company’s capability to increase market share by widening portfolio through product launches, expanding geographies and undertaking large job contracts. “Increased capacity utilisation levels coupled with cost rationalisation initiatives will boost profits further going forward,” the firm wrote in a report. “Its strong product portfolio and ongoing focus on NDDS (Novel Drug Delivery System) gives it a competitive edge,” it added. A new USFDA plant to cater domestic and regulatory markets will also help Lincoln Pharma to perform strongly in coming years, Sunidhi Research said in a report. Lincoln Pharma’s top 10 drugs mainly consist of drugs from its focus therapies such as Erope (meropenem), NamCold, Tinnex, Trixon, Trixon S, L Pill, Kodex, Charge Up, Vivian Plus and Cepy O CV (cefpodoxime + clavulanic acid) have recorded phenomenal growth over the years, it added.Robust domestic and global performanceThe research firm has cited initiatives of new launches and capacity expansion, which have started yielding result. This, it says, is evident from robust financial performance. “The demand for LPL products remains strong and has enabled LPL to build a strong order-book. Furthermore, the benefits of the ongoing initiatives to further expand its presence in the international markets are expected to drive growth going forward. New approvals from Sudan, Ethiopia and Zimbabwe; expansion in PIIGS countries will increase international volumes,” the firm said in its report. The stock has gained a whopping 67 percent in the past one year. Its momentum has also continued in the recent past, with the stock registering a 27 percent gain. At 15:29 hrs, the stock was quoting at Rs 244.50, up Rs 40.75, or 20.00 percent on the BSE. It touched an intraday high of Rs 244.50 and an intraday low of Rs 237.40.