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The profitability of Pakistan’s listed pharmaceutical sector grew by 30% year-on-year (YoY) in the first quarter of FY26, reaching Rs. 10.4 billion, according to a sector research report by Topline Securities released on November 12, 2025.
The strong performance was driven by higher net sales, improved gross margins, and a decline in finance costs.
Pakistan Pharmaceuticals – Listed Pharma Profit up 30% YoY in 1QFY26; Momentum continued with improved margins
(Nov 12, 2025) pic.twitter.com/WkkGGdiWeu— Topline Securities Ltd (@toplinesec) November 12, 2025
Sales and Margins Show Solid Growth
The sector’s net sales rose 14% YoY to Rs. 94.0 billion in 1QFY26, mainly due to higher drug prices after the deregulation of non-essential drugs in February 2024.
Companies such as Abbott (ABOT), Searle (SEARL), AGP, Ferozsons (FEROZ), and Hoechst Pakistan (HPL) led this growth.
As prices increased, gross margins strengthened from 37% in 1QFY25 to 42% in 1QFY26, the highest in recent quarters.
A decline in raw material prices, along with a stable currency, also supported margin expansion. Among the listed firms, AGP Limited achieved the highest gross margin of 62% in the quarter.
Pharma Sector’s Key Financial Highlights
| Indicator | 1QFY26 | 1QFY25 | YoY Change | 4QFY25 | QoQ Change |
| Net Sales | Rs. 94.0 bn | Rs. 82.2 bn | +14% | Rs. 86.1 bn | +9% |
| Cost of Sales | Rs. 54.7 bn | Rs. 51.8 bn | +6% | Rs. 51.6 bn | +6% |
| Gross Profit | Rs. 39.4 bn | Rs. 30.5 bn | +29% | Rs. 35.0 bn | +13% |
| Finance Cost | Rs. 1.0 bn | Rs. 2.0 bn | -52% | Rs. 1.15 bn | -16% |
| Profit Before Tax | Rs. 17.2 bn | Rs. 12.5 bn | +38% | Rs. 15.0 bn | +15% |
| Profit After Tax | Rs. 10.4 bn | Rs. 8.0 bn | +30% | Rs. 7.7 bn | +35% |
Topline’s data shows that sector-wide earnings increased 35% quarter-on-quarter (QoQ), supported by gross margin gains and a one-off adjustment in SEARL. Even excluding SEARL, the pharma sector’s QoQ growth stood at 8%.
The report noted that the sector’s finance cost fell by 52% YoY to Rs1.0 billion, largely due to a significant drop in the average KIBOR rate, from 18.5% in 1QFY25 to 11.0% in 1QFY26. Lower borrowing levels also contributed to this decline, further improving overall profitability.
Company-Wise Performance
The table below outlines key financial results for major listed pharmaceutical companies in 1QFY26:
| Company | Sales (Rs. Mn) | YoY | Gross Profit | YoY | PAT | YoY |
| GlaxoSmithKline (GLAXO) | 14,188 | -4% | 5,213 | +29% | 2,037 | +6% |
| Abbott Pakistan (ABOT) | 19,819 | +14% | 6,726 | +17% | 1,823 | +1% |
| Haleon Pakistan (HALEON) | 10,563 | +8% | 4,256 | +16% | 1,615 | +21% |
| The Searle Company (SEARL) | 9,697 | +27% | 5,244 | +51% | 914 | +113% |
| Highnoon Labs (HINOON) | 7,118 | +13% | 3,986 | +25% | 945 | +20% |
| AGP Limited (AGP) | 7,624 | +27% | 4,726 | +34% | 1,175 | +61% |
| Hoechst Pakistan (HPL) | 8,284 | +15% | 3,047 | +21% | 876 | +131% |
| Ferozsons Laboratories (FEROZ) | 5,939 | +31% | 2,609 | +41% | 322 | +34% |
| Citi Pharma (CPHL) | 3,370 | +4% | 519 | +21% | 204 | +1% |
| Macter International (MACTER) | 2,860 | +27% | 1,291 | +34% | 145 | +64% |
| BF Biosciences (BFBIO) | 2,432 | +75% | 1,038 | +84% | 160 | +39% |
| IBL Healthcare (IBLHL) | 1,121 | +4% | 400 | +18% | 70 | +17% |
| Otsuka Pakistan (OTSU) | 1,076 | +33% | 339 | +144% | 120 | NM |
Top performers by profit growth included Searle, Hoechst Pakistan, AGP, Macter, and BF Biosciences. These firms showed robust expansion in both sales and profitability.
Positive Outlook Ahead for Pharma
Topline Securities expects pharma profitability to remain strong in the coming quarters. The sector is entering a phase of new product launches, while API prices continue to fall due to lower crude oil prices. Both factors are expected to support margins and earnings momentum.
The brokerage recommends investors focus on high-quality stocks that have:
- A larger share of non-essential products
- Low leverage
- Strong gross margins
- Attractive valuations
In its recent strategy report (November 8, 2025), Topline named GlaxoSmithKline (GLAXO) and Highnoon Laboratories (HINOON) as alpha stocks in the sector.
Pakistan’s pharmaceutical sector continues to show strong recovery and profitability, supported by policy reforms and lower financial pressures.
The combination of price deregulation, improving cost efficiency, and product innovation positions the sector for sustained growth in FY26.
