5 Reasons AGP Limited Could Be Your Next Big Pharma Pick                    

As Pakistan’s pharmaceutical sector evolves rapidly post-deregulation, AGP Limited (AGP) stands out as one of the most attractive investment opportunities. With a strong product mix, robust earnings growth, and healthy margins, AGP is well-positioned to deliver both stability and upside to investors. Here are five reasons why AGP might be your next big pharma pick.

High non-essential drug mix enables pricing flexibility

Roughly 63% of AGP’s revenue comes from non-essential drugs, which were recently deregulated. This allows AGP to set market-based prices, a huge advantage in a market where price caps have historically squeezed margins. As essential drugs remain regulated, companies with more exposure to non-essential segments (like AGP) stand to benefit the most from this structural shift.

Consistently high gross margins and operational efficiency

AGP boasts the highest gross margins in the sector at over 58%, thanks to:

📢 Announcement: We're Moving to Discord – Join Us There! 

Hi everyone! 👋

To improve your experience and offer additional features, we’re moving our community from WhatsApp to Discord!

Here’s what you’ll get on Discord:

✅ Research Reports Channel – Access a regularly updated compilation of valuable research reports
✅ PSX24/7 Bot – Ask anything about the PSX and get instant insights powered by KSEStocks historical data
✅ Organized Channels – Separate spaces for discussions, news, reports, and more
✅ Better Notifications – Control what you see and when
✅ Smoother Interaction – Easier to follow and participate in conversations
✅ Organized trading ideas - trading ideas that you can discuss and keep track of

Join now 👉 https://discord.gg/kST9hWjS

• A well-diversified product portfolio across pain, allergy, and women’s health
  
• Strong local manufacturing capabilities
  
• Efficient cost controls
  

These factors allow AGP to maintain high operating margins and insulate itself against cost shocks such as fluctuations in active pharmaceutical ingredient (API) prices.

Earnings set to surge with new product launches

AGP’s earnings are projected to grow significantly over the next two years. Forecasted EPS stands at:

• PKR 13.0 in CY25
  
• PKR 15.6 in CY26
  

This growth is driven by:

Don't miss:

• Which cars are driving the rally in auto stocks?
• Is DGKC going to Rs. 240?
• Why TPLP could go higher.

• Expansion into dermatology through the Dermalogica range
  
• Acquisition of portfolios from Sandoz and Viatris
  
• New launches in the fast-growing pain and allergy categories
  

These product additions help strengthen AGP’s already powerful brand portfolio.

Undervalued relative to growth prospects

Despite its strong fundamentals, AGP is trading at a forward P/E of 14.3x, a discount to the sector’s historical average of 20x. With a fair value target of PKR 257/share (vs. the current price of PKR 185), the stock offers a potential 39% upside, making it a compelling value buy for long-term investors.

Attractive dividend payout and healthy financials

AGP is not just a growth story, it’s also a steady income generator. The company is expected to pay a dividend of PKR 13/share by CY26, offering a solid yield for investors. Moreover, AGP maintains a clean balance sheet with prudent capital allocation, adding another layer of confidence for risk-averse investors.

Final word

AGP’s winning combination of regulatory advantage, operational efficiency, upcoming product launches, and undervaluation makes it one of the most promising picks in Pakistan’s pharma sector today. With the sector poised for growth and AGP leading from the front, now might be the time to load up.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →