Pakistan’s listed pharmaceutical companies recorded an 11 percent year-on-year increase in profit after tax to Rs. 11.6 billion during the first quarter of FY2027, as higher sales and improved gross margins supported earnings.

According to a report by Topline Securities, the sector’s net sales increased 5 percent year-on-year and 11 percent quarter-on-quarter to Rs. 98.8 billion.

Gross profit rose 10 percent year-on-year to Rs. 43.2 billion, while the gross margin improved to 43.7 percent compared with 41.9 percent in the same quarter last year and 42.8 percent in the preceding quarter.

However, the sector’s combined market capitalization fell 24 percent year-on-year and 13 percent quarter-on-quarter to Rs. 505.2 billion as of October 30, 2026.

Higher Sales and Margins Boost Pharma Earnings

Topline Securities attributed the sales growth to a better product mix, higher prices and increased volumes.

The sector maintained its growth despite the suspension of exports to Afghanistan since October 2025. The comparison was also against a higher sales base in the first quarter of FY2026, when pharmaceutical companies were still exporting to Afghanistan.

Abbott Laboratories Pakistan accounted for 21 percent of the sector’s total sales during the quarter. GlaxoSmithKline Pakistan contributed 17 percent, followed by The Searle Company at 11 percent and Haleon Pakistan at 10 percent.

Higher prices and sales volumes also helped improve gross margins. AGP recorded the highest gross margin among the companies covered at 64.6 percent, followed by The Searle Company at 57.2 percent and Highnoon Laboratories at 57.1 percent.

Selling and distribution expenses increased 6 percent year-on-year and 5 percent quarter-on-quarter to Rs. 18.6 billion. Administrative expenses rose 14 percent year-on-year and 5 percent quarter-on-quarter to Rs. 3.6 billion.

Higher Finance Costs Offset Some Gains

The sector’s finance costs increased 22 percent year-on-year and 44 percent quarter-on-quarter to Rs. 1.2 billion during 1QFY27.

According to Topline Securities, higher finance costs at GlaxoSmithKline Pakistan, AGP and Haleon Pakistan contributed to the increase.

Meanwhile, other income declined 15 percent year-on-year and 69 percent quarter-on-quarter to Rs. 802 million, mainly due to lower contributions from Hoechst Pakistan, GlaxoSmithKline Pakistan and The Searle Company.

The sector’s effective tax rate stood at 37.9 percent, compared with 39.4 percent in 1QFY26 and 50.4 percent in 4QFY26. Companies paid a combined tax charge of Rs. 7.1 billion during the quarter.

How Major Pharmaceutical Companies Performed

GlaxoSmithKline Pakistan recorded net sales of Rs. 16.6 billion, up 17 percent year-on-year. Its profit after tax increased 28 percent to Rs. 2.6 billion.

Abbott Laboratories Pakistan reported sales of Rs. 20.6 billion, representing 4 percent growth. Its profit after tax climbed 40 percent to Rs. 2.5 billion.

The Searle Company posted a 15 percent increase in sales to Rs. 11.2 billion, while its profit after tax rose 31 percent to Rs. 1.2 billion.

Haleon Pakistan recorded a 5 percent decline in sales to Rs. 10 billion. Its profit after tax also fell 5 percent to Rs. 1.5 billion.

Highnoon Laboratories reported a 5 percent increase in sales to Rs. 7.5 billion, but its profit after tax declined 2 percent to Rs. 931 million.

AGP recorded the weakest sales performance among the companies mentioned, with revenue falling 15 percent year-on-year to Rs. 6.4 billion. Its profit after tax also declined 12 percent to Rs. 1 billion.