Pakistan’s listed pharmaceutical sector posted its highest ever profitability in 2025, with profits surging 78 percent year on year to Rs. 42.2 billion, according to a report by Topline Securities. The sharp increase was driven by stronger sales, lower active pharmaceutical ingredient costs, and a significant reduction in finance expenses.
The report said net sales rose 14 percent to Rs. 365.7 billion in 2025, compared with Rs. 319.6 billion a year earlier, largely supported by price-led growth following deregulation of nonessential drugs. In the fourth quarter alone, sales increased 18 percent to Rs. 102.1 billion.
Profitability also improved at the gross level, with sector margins rising to 41 percent in 2025 from 35 percent in 2024.
According to the report, lower API costs played a key role, with 53 percent of APIs showing a median price decline of 11 percent from January to October 2025. Fourth quarter margins further strengthened to 44 percent. AGP Limited, Highnoon Laboratories Limited, and The Searle Company Limited reported the highest gross margins during the year.
Finance costs fell 49 percent to Rs. 4.2 billion in 2025 amid lower interest rates and reduced debt levels, adding further support to earnings growth. Meanwhile, the sector’s effective tax rate remained broadly stable at 39.9 percent.
The report also highlighted strong shareholder returns, with total dividends rising to Rs. 21.1 billion in 2025 from Rs. 12 billion a year earlier. Major dividend contributors included GlaxoSmithKline Pakistan Limited, Abbott Laboratories Pakistan Limited, and Haleon Pakistan Limited.
According to Topline Research, sector profitability is expected to remain strong as companies expand product portfolios and focus on higher margin segments, though volatility in API prices linked to oil market movements remains a key risk.
