Pakistan pharma earnings surge to record PKR 42B in 2025

Pakistan’s listed pharmaceutical sector posted record earnings in 2025, driven by strong sales growth, easing input costs and lower financing expenses, according to a report by Topline Securities.

The sector’s profit surged 78% year-on-year to PKR 42.2 billion, marking an all-time high. On a quarterly basis, earnings rose to PKR 14.2 billion in the fourth quarter of 2025, up from PKR 9.3 billion in the same period last year.

“The surge in profits is primarily due to higher sales, lower API cost, and reduced finance cost,” Topline Securities said in its report.

Net sales climbed 14% to PKR 365.7 billion in 2025, compared with PKR 319.6 billion a year earlier, largely supported by price-led growth following deregulation of nonessential drugs. Fourth-quarter sales rose 18% year-on-year to PKR 102.1 billion.

Major contributors to sales included Abbott Laboratories Pakistan, GlaxoSmithKline Pakistan, Haleon Pakistan and The Searle Company, accounting for 21%, 18%, 12% and 8% of total revenues, respectively.

Profitability was further supported by expanding margins, with gross margins rising to 41% in 2025 from 35% in 2024. In the fourth quarter alone, margins reached 44%, compared with 39% a year earlier. The brokerage attributed the improvement to higher prices and declining active pharmaceutical ingredient (API) costs, noting that more than half of APIs recorded a median price drop of 11% during January-October 2025.

Among individual companies, AGP Limited, Highnoon Laboratories and The Searle Company posted the highest gross margins at 60%, 55% and 55%, respectively.

Finance costs fell sharply by 49% to PKR 4.2 billion in 2025, reflecting lower interest rates and reduced leverage. On a quarterly basis, financial charges dropped 52% year-on-year to PKR 902 million in the final quarter.

The sector’s effective tax rate remained broadly stable at 39.9% in 2025, with total tax payments amounting to PKR 27.9 billion. In the fourth quarter, the tax rate stood at 40.9%, translating into a charge of PKR 9.8 billion.

Pharmaceutical firms also increased shareholder returns, distributing PKR 21.1 billion in dividends during 2025, compared with PKR 12.0 billion a year earlier. Key contributors included GlaxoSmithKline Pakistan, Abbott Laboratories Pakistan, Haleon Pakistan and Highnoon Laboratories.

Looking ahead, Topline Securities said profitability is expected to remain strong as companies expand product portfolios and focus on higher-margin segments.

“However, any uncertainty over API prices amid volatile oil prices could keep margins in check,” the brokerage said.
The firm highlighted GlaxoSmithKline Pakistan and Highnoon Laboratories as preferred picks in the sector, based on earlier strategy reports.