Pakistan listed pharmaceutical sector recorded a profitability of Rs11.6bn, up by 11% YoY and 54% QoQ in 1QFY27. We believe the YoY and QoQ growth is mainly driven by higher sales and improved gross margins.
Despite this growth, the market cap of the sector declined 24% YoY and 13% QoQ to clock in at Rs505.2bn.
The net sales increased by 5% YoY and 11% QoQ to Rs98.8bn in 1QFY27, mainly driven by the mix of price and volume increase, in our view. Notably, this growth was achieved despite a higher base in 1QFY26, which included exports to Afghanistan, while exports to the country have remained suspended since Oct-25.
During the quarter, major sales contribution came from ABOT 21%, GLAXO 17%, SEARL 11%, and HALEON 10%.
Quarterly gross margins of the sector remained higher at 43.7% in 1QFY27 vs 41.9% in 1QFY26 and 42.8% in 4QFY26. This is due to the uptick in volumes and prices as mentioned earlier.
In 1QFY27, AGP, SEARL, and HINOON reported highest gross margins of 64.6%, 57.2%, and 57.1%, respectively.
Selling and distribution expense of the sector stood at Rs18.6bn up by 6% YoY and 5% QoQ in 1QFY27. Similarly, admin expense clocked at Rs3.6bn up by 14% YoY and 5% QoQ in 1QFY27.
Finance cost of the sector also increased by 22% YoY and 44% QoQ to Rs1.1bn in 1QFY27. Higher finance cost of GLAXO, AGP, and HALEON pushed the sector’s cost upward during 1QFY27.
Other income of the sector declined by 15% YoY and 69% QoQ to Rs802mn in 1QFY27. This major decrease is due to the lower contribution from HPL, GLAXO, and SEARL.
Effective Tax Rate (ETR) of the sector reported at 37.9% in 1QFY27 vs 39.4% in 1QFY26 and 50.4% in 4QFY26. In absolute terms, the tax charge of the sector clocked in at Rs7.1bn in 1QFY27.
