Pakistan’s listed pharmaceutical companies’ profit quadruple in first quarter of fiscal year

Pakistan’s listed pharmaceutical sector saw its profit quadruple in the first quarter of the fiscal year, reaching PKR 7.5 billion ($26.8 million) compared to PKR 1.8 billion in the same period last year.

According to Sherman Securities analysts, the robust gross margin during 1QFY25 was driven by higher product prices and lower raw material costs.

The government allowed a one-time price hike of up to 14% for essential medicines and up to 20% for non-essential biologicals. Additionally, raw material costs decreased due to a drop in chemical prices amid declining oil prices and a 5% appreciation of the Pakistani rupee.

Major players like ABOT and HALEON significantly contributed to sector revenue, with revenue growth of 24% and 21%, respectively. Smaller companies like MACTER and BFBIO reported the highest revenue increases, with growth of 44% and 31%, respectively, in Q1 FY25.

Despite the overall sector growth, FEROZ and SEARL reported lower revenue growth due to the impact of their respective subsidiaries.

FEROZ’s revenue declined by 7% in Q1FY25, while SEARL’s revenue dropped by 12%. SEARL’s decline is attributed to the separation of the SPL business, which previously contributed approximately PKR 2.1 billion per quarter to SEARL's consolidated financials.

In the case of FEROZ, the decline was due to its subsidiary, BF Biosciences, which recently started manufacturing products previously produced by FEROZ under a toll agreement.

ABOT saw a turnaround in earnings, with earnings per share (EPS) rising from PKR 0.1 in 1QFY24 to PKR 18.5 in 1QFY25, mainly due to improved gross margins.

GLAXO recovered from losses and posted an EPS of PKR 6.1 in 1QFY25 compared to the same period last year.

It is worth noting that Pakistanis spend trillions of rupees on medicines and nutraceuticals each year.