AGP Limited (AGP): Riding the Pharma Wave, But Facing Near-Term Pressure
Pakistan’s pharmaceutical industry is having a good run. Earnings across the sector are expected to rise sharply, up more than 100% compared to last year. The main reasons? Deregulation of non-essential medicines, falling prices of key raw materials (APIs), and a seasonal bump in sales.
But when we zoom in on AGP Limited (AGP), the story gets a bit mixed.
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AGP’s performance in 2Q CY25
- Earnings (EPS): PKR 2.32 per share
- That’s 70% higher than last year, but 24% lower than last quarter.
- Profit after tax: PKR 651 million
So, while AGP looks stronger than last year, its recent performance dipped compared to the previous quarter.
Why the dip?
- Seasonal slowdown: Sales fell by about 9% compared to the last quarter.
- No major price hikes: Unlike peers such as Glaxo, AGP didn’t significantly raise prices of its non-essential medicines.
- Higher finance costs: Rising borrowing expenses put extra pressure on profits.
Margins still strong
Despite these challenges, AGP’s gross margins remain very healthy at 55%, which is higher than most peers. This shows that AGP is still efficient at turning sales into profit, even with some short-term bumps.
What’s next?
The deregulation of non-essential medicines gives AGP a lot more room to grow in the future. With more freedom to set prices and launch new products, the company has strong long-term potential. However, in the short term, earnings might stay bumpy because of seasonal demand shifts and high costs.
AGP is still a strong pharma player with solid margins and long-term opportunities. But compared to other pharma names, its short-term results aren’t as exciting this quarter.
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Source: Optimus Capital Management
⚠️ 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 →
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