The Pakistan listed pharmaceutical sector has demonstrated significant resilience, posting a net profit after tax of Rs10.2 billion for the first quarter of 2026.
This represents a 17% Year-on-Year (YoY) increase compared to the Rs8.7 billion recorded in the same period last year. The growth is primarily attributed to a 7% increase in net sales, which reached Rs90.7 billion, driven largely by upward price adjustments and higher sales volumes.
Margin Expansion and Cost Efficiency
The sector’s gross margins improved to 43% in 1Q2026, up from 39% in 1Q2025. This improvement was bolstered by effective inventory management, with the sector maintaining an average of 60 days of stock. Furthermore, a declining interest rate environment led to a 24% YoY reduction in finance costs, which dropped to Rs932 million.
Operational Challenges and Outlook
Despite the YoY success, profitability declined 28% on a Quarter-on-Quarter (QoQ) basis due to seasonal dips in sales volumes and lower “other income”. Selling and distribution expenses rose by 20% YoY to Rs17 billion.
Looking ahead, while portfolio expansion suggests strong future volumes, the sector warns that volatile oil prices and uncertainty regarding Active Pharmaceutical Ingredient (API) costs could challenge gross margins for the remainder of 2026.