India has emerged as a major player in the global pharmaceutical industry, particularly in the production of generic drugs. The country boasts the largest number of pharmaceutical manufacturing facilities complying with the US Food and Drug Administration, making up 8% of the global active pharmaceutical ingredient (API) market. Its reputation as the “pharmacy of the world” stems from the cost-effectiveness and high quality of its medicines.

One notable company in India’s pharmaceutical sector is Lincoln Pharmaceutical Ltd, based in Gujarat. Founded in 1979, Lincoln Pharma has demonstrated remarkable performance over the past decade. With manufacturing plants in Gujarat that utilize renewable energy sources, the company offers a diverse product portfolio including medications for respiratory, diabetes, malaria, cardiovascular, and gynecological conditions. Lincoln Pharma has experienced significant export growth, with exports accounting for over 56% of its revenue, targeting markets in Africa, Latin America, and Southeast Asia.

Financially, Lincoln Pharma has achieved impressive results, with a 30% compound annual growth rate (CAGR) in net profit, 20% growth in earnings before interest, taxes, depreciation, and amortization (EBITDA), and over 10% revenue growth from FY 2012 to FY 2022. Noteworthy accomplishments include the successful expansion and acquisition of a Cephalosporin plant, enhancing the company’s capabilities and market reach. Lincoln Pharma anticipates further export growth, expecting contributions from EU and Australian markets. The company has obtained approvals from regulators in Australia and WHO GMP for its facilities, indicating its adherence to international quality standards.

India’s pharmaceutical industry continues to play a crucial role in global healthcare, supplying a significant percentage of vaccines, generic drugs, and medicines worldwide. Lincoln Pharma exemplifies the potential of small-cap companies within this thriving sector, making it an attractive investment option for portfolio investors seeking long-term growth.

Analyzing the stock chart, it becomes evident that the stock underwent a period of consolidation from 2016 to the middle of 2021. However, there was a notable breakout from that range, indicating a shift in momentum. The stock subsequently retraced back to test the breakout level, demonstrating a healthy market behavior. Currently, it appears that the stock is poised to continue its upward trajectory, indicating a potential move towards higher price levels.