Pakistan Listed Pharmaceutical Companies Report 11% Profit Growth in 1QFY27

Pakistan’s listed pharmaceutical companies recorded combined profits of Rs11.6 billion in the first quarter of FY2027, registering an 11% increase year-on-year and a 54% rise quarter-on-quarter, according to a research report dated November 2.

The improvement in profitability was mainly driven by higher sales and stronger gross margins. However, despite the earnings growth, the sector’s total market capitalisation declined 24% year-on-year and 13% quarter-on-quarter to Rs505.2 billion.

The sector’s net sales increased 5% year-on-year and 11% quarter-on-quarter to Rs98.8 billion during 1QFY27. The report attributed the growth to a combination of higher prices and sales volumes.

The increase came despite a higher comparison base in 1QFY26, when pharmaceutical companies recorded exports to Afghanistan. Exports to the country have remained suspended since October 2025.

Among major listed companies, Abbott Laboratories Pakistan (ABOT) contributed 21% of sector sales, followed by GlaxoSmithKline Pakistan (GLAXO) at 17%, The Searle Company (SEARL) at 11% and Haleon Pakistan (HALEON) at 10%.

Gross margins improve to 43.7%

The sector’s gross margin increased to 43.7% in 1QFY27, compared with 41.9% in the same quarter last year and 42.8% in 4QFY26.

The report linked the improvement to higher sales volumes and product prices. Among individual companies, AGP Limited recorded the highest gross margin at 64.6%, followed by SEARL at 57.2% and Highnoon Laboratories (HINOON) at 57.1%.

Operating and financing costs increase

Selling and distribution expenses across the sector reached Rs18.6 billion, increasing 6% year-on-year and 5% quarter-on-quarter during the quarter.

Administrative expenses also rose 14% year-on-year and 5% quarter-on-quarter to Rs3.6 billion.

Meanwhile, finance costs increased 22% year-on-year and 44% quarter-on-quarter to Rs1.1 billion. Higher financing expenses at GLAXO, AGP and HALEON contributed to the overall increase.

Other income moved in the opposite direction, declining 15% year-on-year and 69% quarter-on-quarter to Rs802 million. The report attributed the decrease mainly to lower contributions from HPL, GLAXO and SEARL.

Effective tax rate declines

The sector’s effective tax rate stood at 37.9% in 1QFY27, down from 39.4% in 1QFY26 and 50.4% in the preceding quarter.

In absolute terms, the combined tax charge reached Rs7.1 billion during the quarter.

Winter demand expected to support volumes

Looking ahead, the research report expects pharmaceutical sector volumes to improve in the coming quarters. A low comparison base, new product launches and higher seasonal demand during winter are expected to support sales activity.

The sector’s first-quarter results show improved profitability and stronger gross margins, although rising financing and operating expenses remain important factors for companies to manage.