Pakistan’s pharmaceutical sector earned a record Rs. 42.2 billion in fiscal year 2026, as higher profitability and lower borrowing costs lifted its annual earnings to an all-time high.

Topline Securities reported that the sector’s profits grew 28 percent year-on-year in FY26, while its profit margin climbed to a record 42.8 percent. Finance costs declined by 42 percent over the same period, providing further support to earnings.

The sector’s profits grew at a compound annual rate of around 14 percent between FY17 and FY26, according to the brokerage’s data.

However, the increase in earnings was not matched by a similar rise in market value. The pharmaceutical sector’s combined market capitalization grew by just 2 percent year-on-year as of June 30, 2026, despite the strong annual profit growth.

The gap between earnings and market capitalization highlights a contrast in the sector’s FY26 performance: pharmaceutical companies reported their highest-ever profits, but their overall stock market value recorded only modest growth.