AGP Limited: Earnings Strong, But Seasonal Dip Ahead

AGP Limited (AGP), one of Pakistan’s top pharmaceutical companies, is expected to show strong profits for the second quarter of 2025 (April–June), but a slight dip compared to the first quarter. Here’s what investors and followers should know:

2QCY25 earnings snapshot

AGP is expected to post a profit of Rs725 million in the second quarter, up 90% compared to the same period last year. This means earnings per share (EPS) will likely come in at Rs2.59.

What’s driving the growth?

• Higher medicine prices
• More product sales
• Lower interest costs (thanks to falling interest rates and reduced borrowing costs)

Even though overall sales are expected to be around Rs6.3 billion (+10% YoY), they’ll likely be down 12% from the previous quarter, which is normal due to slower seasonal demand during this part of the year.

Margins & costs

• Gross margins (how much money the company keeps after subtracting production costs) are expected to rise slightly YoY.
• Finance costs are expected to drop 46% YoY, giving AGP more breathing room to focus on growth.
• No cash dividend is expected this quarter, which is in line with AGP’s usual payout pattern.

Full-year expectations look bright

AGP is forecasted to earn:

• Rs31 billion in sales for the full year 2025, up 24% from 2024
• Rs14.18 EPS, up from Rs9.54 last year
• Rs6 per share in dividends for the full year

Even with a seasonal slowdown, the company’s long-term growth trend is strong, thanks to consistent product demand and pricing adjustments.

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Attractive valuation = buying opportunity?

Despite AGP’s solid fundamentals, its stock hasn’t kept up with the KSE-100 index this year, up just 12.9% vs 20.5% for the broader market. This underperformance might make AGP stock an attractive buy, especially since it’s trading below its usual valuation.

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With a 2025 price-to-earnings (P/E) ratio of 13.6x, AGP is cheaper than many peers in the pharma space, even though it’s showing faster profit growth.

AGP continues to deliver healthy growth, strong profit margins, and promising full-year numbers. While the April–June quarter may look slightly weaker due to seasonality, the big picture remains positive. For long-term investors, this could be a good moment to take a closer look at AGP.

Source: JS Global Capital Limited

⚠️ 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 →