Profits of Listed Pharma Companies Went Up by 30% as Margins Improve

Pakistan’s listed pharmaceutical sector reported a 30 percent year-on-year rise in profits during the first quarter of FY26, according to a sector review by Topline Securities. The development was supported by stronger sales, improved cost controls, and better margins. The report noted that the sector’s combined profit after tax stood at Rs. 10.4 billion, compared to Rs. 8 billion in the same period last year, reflecting continued recovery in the healthcare and medicine market. Total net sales grew 14 percent year-on-year to Rs. 94 billion, while gross profits rose 29 percent to Rs. 39 billion as companies benefited from stable input costs and improved pricing dynamics. Among major players, Glaxo Smith Kline Pakistan, Abbott Pakistan, and The Searle Company remained the largest contributors to sector earnings. The Searle Company’s profit after tax more than doubled, up 113 percent year-on-year, while Hoechst Pakistan and AGP Limited also showed strong gains of 131 percent and 61 percent, respectively. BF Biosciences, which focuses on biosimilar drugs, recorded a 39 percent profit growth. Despite a decline of over 50 percent in finance costs due to falling interest rates, sector-wide gross margins climbed to 42 percent in 1QFY26 compared to an average of 33 percent last year. Net profit margins also improved to 11 percent, continuing an upward trend since FY24 as companies recovered from inflationary pressures and currency volatility. Topline’s analysis showed a clear moderation in borrowing costs as the 6-month KIBOR rate fell to 11 percent in the latest quarter from over 22 percent a year earlier, easing pressure on balance sheets and supporting cash flow. The lower financial burden allowed firms to expand marketing and distribution without major pricing hikes. In volume terms, Ferozsons Laboratories and Macter International recorded notable sales growth of 31 and 27 percent, respectively, helped by higher demand for essential and chronic care drugs. Meanwhile, Abbott Pakistan maintained its strong performance with a 14 percent rise in sales and a steady double-digit profit increase. Sector analysts said momentum is likely to continue through FY26 as margins stabilize and operating costs decline. However, they cautioned that future performance could still depend on exchange rate stability and regulatory pricing decisions by the Drug Regulatory Authority of Pakistan (DRAP). Overall, the report concludes that the pharmaceutical sector has entered FY26 on a strong financial footing, with consistent growth in sales, profitability, and cost efficiency marking one of the most robust quarterly performances in recent years.