AGP limited downplays impact of potential India trade suspension

Amid rising tensions between Pakistan and India, AGP Limited anticipates only a minor financial impact if pharmaceutical trade between the two countries is disrupted.

Speaking at its corporate briefing session on Monday, the management emphasized that while the broader pharmaceutical industry depends on Indian imports for about 20% of its supply by value, AGP’s reliance on Indian active pharmaceutical ingredient (API) imports is comparatively lower, at approximately 14%.

The company stated that it does not foresee significant operational challenges if trade is suspended, although transitioning to alternative suppliers could result in a one-time cost of around PKR 100 million to PKR 150 million.

Management acknowledged that while APIs sourced from India are generally cost-effective, alternative suppliers have already been identified to ensure business continuity with minimal disruption. Negotiations with new suppliers are underway to mitigate any potential cost increases.

AGP reported strong financial results for the calendar year 2024 (CY24), with profit after tax surging 62% year-over-year to PKR 2.96 billion ($10.5 billion). Revenue also climbed 34% to PKR 25 billion, driven by a 21% increase in volumes and selective price adjustments.

The company’s flagship products demonstrated robust growth, with Azomax surpassing the PKR 4.0 billion mark—an 18% increase—while Rigix exceeded PKR 3.0 billion, reflecting a 33% growth.

Looking ahead, AGP expects double-digit volumetric growth to persist in 2025, fueled by an expansion in institutional sales and a growing portfolio of chronic care products. Institutional sales totaled approximately PKR 850 million in 2024, with projections indicating a potential increase to PKR 1.5 billion in the coming year.

Management also highlighted that existing production facilities are well-equipped to meet evolving supply dynamics, backed by a recurring capital expenditure (CapEx) plan of 7–8% of annual sales.

Despite potential geopolitical uncertainties, AGP anticipates net margins to stabilize within a healthy range of 15–20% over the next few years, supported by debt reduction and organic growth.