Listed pharma companies’ profits rise 28% in FY26 as margins reach a record
Listed drug makers earned Rs42.2 billion in FY26 on sales of Rs377.9 billion, with gross margins at an all-time high of 42.8%.
In this article
Pakistan’s listed pharmaceutical companies had their most profitable year on record in FY26, according to a sector report cited by ARY News on 6 October 2026.
The numbers
| Listed pharma companies | FY25 | FY26 |
|---|---|---|
| Net sales | Rs342.6 billion | Rs377.9 billion (+10%) |
| Profit | — | Rs42.2 billion (+28%) |
| Gross margin | 38.9% | 42.8% |
Fourth-quarter sales rose 3% to Rs88.9 billion, with the gross margin holding at 42.8%.
What drove it
The report attributes the profit growth mainly to higher medicine prices and lower financing costs. It also notes that medicine prices in urban centres rose sharply in 2024 and 2025, and that sales tax on medicines adds to the cost for consumers.
The wider market
The listed companies are part of a much larger market. Industry and DRAP figures reported by ProPakistani put the retail market at Rs1.251 trillion in FY26, up 14.88%, with unit volumes up only 0.93% — see our market article.
Understanding the margins
The gross margin is the share of sales left after the direct cost of making the products — raw materials, packaging, factory labour and overheads. A rise from 38.9% to 42.8% means that, for every Rs100 of sales, listed companies kept almost Rs4 more after production costs than a year earlier. Net profit then depends on what comes below that line: selling and distribution costs, administration, financing costs and tax.
Two forces moved both lines in FY26. Higher prices, especially after the deregulation of non-essential medicines, lifted revenue faster than costs. And lower financing costs, after the State Bank of Pakistan’s interest-rate cuts that began in June 2024, reduced the cost of the working capital and loans that manufacturers rely on to fund raw-material imports and inventory.
Why it is not the whole picture
- Listed companies are a subset. They are generally larger and better capitalised than the hundreds of unlisted manufacturers, many of which operate on thinner margins.
- Volumes are flat. Profit growth based on price rather than units sold depends on pricing policy staying stable.
- Costs can move quickly. Most raw materials are imported, so the exchange rate, freight costs and supplier prices can erode margins within a few quarters.
Where the money could go
Higher profits give manufacturers choices. The most likely uses are upgrades needed for regulation — PIC/S-aligned documentation, cleanroom and HVAC improvements, serialisation for 2D barcodes — and investment in new products and exports. For a sector that has said for years that controlled prices left no room to invest, FY26 is the test of whether better margins turn into better plants.
What investors watch
Analysts following listed pharmaceutical companies tend to focus on a few indicators: gross margin as a sign of pricing power and cost control, sales growth split between price and volume, the share of revenue from new products, export sales, and the level of debt that must be financed. Companies that combine healthy margins with growing volumes and exports are generally seen as better placed than those whose growth depends only on price increases.
The patient’s perspective
Higher industry profits are welcome only if they translate into reliable supply and better quality. The report itself notes the sharp rise in urban medicine prices and the tax on medicines. Keeping essential medicines affordable while allowing manufacturers to invest remains the balance that policy has to strike.
What it means for suppliers
- Healthier margins give manufacturers room to invest in equipment, quality systems and new products.
- With volumes flat, the investment case is about efficiency, compliance and exports rather than raw capacity.
- Policy risk remains: the pricing framework is under review (see deregulation two years on).
Machinery, packaging and laboratory suppliers meet these manufacturers at Pharma Asia 2026.
