Pakistan pharma sector profits jump 78% to record Rs42.2bn in 2025: report

Pakistan’s listed pharmaceutical sector posted its highest-ever profitability in 2025, with net earnings rising 78% year-on-year to Rs42.2 billion, driven by strong sales growth, easing input costs and lower finance charges, according to a sector report. According to a report by Topline Securities.

On a quarterly basis, profits increased 53% year-on-year to Rs14.2 billion in 4Q2025, compared to Rs9.3 billion in the same period last year.

Net sales for the sector grew 14% to Rs365.7 billion in 2025, up from Rs319.6 billion in 2024, largely reflecting price-led growth following deregulation of non-essential drugs. Fourth-quarter sales rose 18% year-on-year to Rs102.1 billion.

Major contributors to total sales included Abbott Laboratories (21%), GlaxoSmithKline Pakistan (18%), Haleon Pakistan (12%), and The Searle Company (8%).

Profitability was further supported by margin expansion, with gross margins rising to 41% in 2025 from 35% a year earlier. In 4Q2025, margins increased to 44% compared to 39% in 4Q2024.

The improvement was partly attributed to a decline in active pharmaceutical ingredient (API) costs, with 53% of APIs recording a median price drop of 11% year-on-year between January and October 2025.

At the company level, AGP, Highnoon Laboratories, and The Searle Company reported the highest gross margins of 60%, 55%, and 55%, respectively.

Finance costs for the sector fell sharply by 49% year-on-year to Rs4.2 billion in 2025, reflecting both declining interest rates and reduced leverage. Quarterly finance costs also declined 52% to Rs902 million.

The sector’s effective tax rate remained broadly stable at 39.9% in 2025, compared to 40.3% in 2024, with total tax payments amounting to Rs27.9 billion.

Companies distributed Rs21.1 billion in dividends during the year, up from Rs12 billion in 2024, maintaining a payout ratio of just over 50%. Major contributors included GlaxoSmithKline Pakistan (Rs5.4 billion), Abbott Laboratories (Rs3.9 billion), Haleon Pakistan (Rs3.5 billion), and Highnoon Laboratories (Rs2.6 billion).