AGP Limited’s Profits Surge Amid Rising Drug Prices and Sales Volume

Karachi: AGP Limited is projected to report a substantial increase in its first-quarter earnings for the calendar year 2025, as per an analysis by JS Global. The pharmaceutical company is expected to post consolidated earnings of Rs861 million, marking a 2.2 times increase compared to the same period last year. This growth translates into an earning per share (EPS) of Rs3.07.

The company’s improved profitability is attributed to several key factors. Chief among them is an increase in drug prices, particularly in the non-essential product segment, coupled with a rise in sales volume. Additionally, reduced finance costs have contributed to the earnings growth.

Despite the significant year-on-year rise, AGP’s quarterly profitability is anticipated to decline compared to the previous quarter. This is due to relatively lower margins resulting from seasonal factors that affected sales volumes. Gross margins for the first quarter of 2025 are expected to be around 59%, a decrease of five percentage points from the previous quarter.

Looking at the broader picture, AGP’s annual gross margins are projected to remain stable. This stability is expected to be supported by a high non-essential product mix, which exceeds 60%, as well as softer prices for active pharmaceutical ingredients (API). The full internalization of the Viatris portfolio by the end of 2025 is also seen as a contributing factor to the stable margins.

AGP’s stock performance has been robust, with a 22% increase year-to-date, outperforming both the broader pharmaceutical sector and the KSE-100 Index. Despite the recent rise in stock price, AGP is currently trading at a calendar year 2025 estimated price-to-earnings ratio of 14.5x. JS Global has reiterated a “Buy” rating for AGP, predicting a 20% upside to the December 2025 target price of Rs250.