Debt-free small-cap stock Lincoln Pharma hits 20% upper circuit and a lifetime high; should you buy?

Small-cap stock Lincoln Pharmaceuticals surged as much as 20 per cent to hit its upper circuit and record high of ₹904.90 in intraday trade on BSE on Wednesday, December 4. Lincoln Pharma share price opened at ₹782.90 against its previous close of ₹754.10 and jumped 20 per cent to the all-time high level. The small-cap stock has surged about 38 per cent in just three sessions in December. 

According to its exchange filing, Lincoln Pharma is a debt-free company. As of September 2024, it had earned a net profit of over ₹100 crores per year and investments of over ₹164 crore, with a healthy return ratio.

The company reported a standalone net profit of ₹50.03 crore for the half year ended September 30, 2024, with a year-on-year (YoY) growth of 7.55 per cent compared to the net profit of ₹46.52 crore in H1FY24.

Income from operation for the H1FY25 was ₹308.50 crore, up 5.79 per cent YoY. EBITDA for the period was ₹71.50 crore, up 4.76 per cent YoY.

Commenting on the H1FY25 results and performance, Mahendra Patel, Managing Director, Lincoln Pharmaceuticals, said, "We are pleased to report continued strong growth across all business verticals in H1FY25 (first half of financial year 2025) while maintaining a net debt-free status. Our new product launches in domestic and export markets have strengthened our market presence and accelerated growth, positioning us for even better performance during the second half of the year."

"Through a combination of robust growth initiatives, high-quality products, geographic expansion, and operational improvements, we are on track to achieve our ambitious ₹750 crore revenue target by FY26. We are among a select group of companies that have consistently achieved profit growth every year from FY3 to FY24,” Patel said.

The company exports to over 60 countries worldwide. It said that with the recent entry into the Canadian market and approvals from TGA—Australia and EU GMP, it is poised for further global expansion. It is also aggressively pursuing product registration for its Cephalosporin plant in Mehsana. These initiatives align with the company's revenue target of ₹750 crore for FY26.

Lincoln Pharma share price trend

Shares of Lincoln Pharma hit a record high of ₹904.90 today, December 4. At this price, they have surged 82 per cent from their 52-week low of ₹498, which they hit on June 5 this year.

Considering today's high level of the stock, it has gained about 49 per cent in the current year so far.

Should you buy the stock?

According to Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, the stock's price action has approached a critical resistance level, specifically the R4 Camarilla bi-yearly pivot.

Patel said this zone represents a significant barrier that challenges further upward movement, as it often attracts selling pressure and profit-booking activities.

"Given the strength of this resistance, it is prudent to secure gains within the ₹845-835 range, especially for those holding long positions. Booking profits in this zone mitigates the risk of a potential pullback or consolidation below the resistance," said Patel.

"For traders and investors seeking fresh long positions, it would be advisable to wait for a decisive daily close above the ₹850 level, as this would signal a breakout from the resistance zone and confirm renewed bullish momentum," Patel said.

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