Pakistan’s Pharmaceutical Sector Sees Revenue Growth Despite Underperformance

Karachi: The listed pharmaceutical sector in Pakistan reported an 11% year-over-year increase in net revenue for the second quarter of the calendar year 2025, amounting to Rs79 billion. This growth was primarily driven by deregulated non-essential drug prices, according to an analysis by JS Global. The sector’s gross margin improved to 41%, largely due to higher pricing, lower active pharmaceutical ingredient prices, and a stable currency.

On a quarter-over-quarter basis, sales of the sample companies remained flat due to seasonal impacts, though gross margins rose by 2 percentage points to 41% during the outgoing quarter. Over the fiscal year 2025, the sector experienced a revenue growth of 16% year-over-year, reaching Rs314 billion, with earnings improving by 2.6 times compared to the previous year.

Despite this financial growth, the pharmaceutical sector has underperformed the KSE-100 index by 35% calendar year to date. However, JS Global views this correction as a purchasing opportunity, citing the sector’s improving prospects. The firm anticipates that seasonal impacts will significantly enhance profitability in the second half of the calendar year 2025. JS Global maintains an “overweight” stance on the sector, recommending AGP and GlaxoSmithKline (GLAXO) as their top picks.