Pakistan’s pharmaceutical sector is expected to report mixed third-quarter results, with AGP Pharma facing a notable year-on-year decline in sales following the complete absence of exports to Afghanistan.
Despite price increases across its product portfolio, AGP’s net sales are projected to fall 10% compared with the same period last year. The decline primarily reflects the loss of Afghan export revenue, which contributed PKR 764 million during the corresponding quarter last year.
While higher product prices and lower taxes are providing some support to the broader pharmaceutical industry, these factors have not been sufficient to offset AGP’s lost export business. The company’s profit after tax is projected at PKR 590 million for the quarter.
Seasonal Demand Supports Quarterly Sales Recovery
Although AGP’s annual performance is expected to weaken, its quarter-on-quarter outlook shows a substantial improvement. Net sales are forecast to increase 47% from the previous quarter, supported by seasonal demand for antibiotics and antiallergic medicines, alongside lower trade discounts.
The expected recovery indicates that domestic demand continues to provide support despite the disruption in export sales. However, the year-on-year decline highlights the impact of AGP’s reliance on the Afghan market as a source of revenue.
Earnings Outlook and Gross Margin Trends
AGP’s earnings per share are projected at PKR 2.1, representing a 43% decline year-on-year and a 2% decrease compared with the previous quarter.
Gross margins are expected to remain around 59.4%, slightly below the level recorded a year earlier. The reduction reflects the loss of higher-margin export sales, which has weighed on the company’s overall sales mix despite price adjustments.
No dividend is anticipated for the quarter. AGP’s near-term performance will depend on its ability to manage costs, sustain domestic sales and address the revenue shortfall caused by the suspension of Afghan exports.
Pakistan Pharmaceutical Sector Faces Uneven Performance
Across the pharmaceutical companies covered by analysts, higher prices are largely helping offset softer domestic volumes and export-related pressures. However, AGP’s expected results demonstrate how the loss of a key overseas market can significantly affect an individual company, even when the broader industry records modest gains.
Investors will monitor whether cross-border trade with Afghanistan resumes in the coming quarters. The availability of alternative export markets and the company’s ability to strengthen domestic sales will also be important factors in determining whether AGP can stabilize its revenue and earnings.