SEARL Set for Strong 4Q FY25 Profit Growth Despite Slight Sales Dip

The Searle Company Limited (SEARL) is expected to post a strong profit jump in the fourth quarter of FY25, even though sales took a small step back. The boost is coming mainly from higher margins and much lower interest costs.

Earnings on the rise

SEARL’s profit after tax is projected at PKR 562 million, which works out to an earnings per share (EPS) of PKR 1.10. This marks a 1.3 times increase compared to the same quarter last year, and a 2.5 times jump compared to the previous quarter. The main driver behind this improvement is reduced financial costs following the repayment of long-term debt.

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Sales slip due to seasonality

Quarterly sales are estimated at PKR 6.8 billion, down 5% year-on-year and 3% quarter-on-quarter. This slowdown is mainly due to seasonality, as certain medicines and products see less demand at this time of year.

Margins improve with higher medicine prices

Even with lower sales, SEARL’s gross profit margins are expected to improve to around 50%, up from 48% in the same quarter last year. This improvement comes from an increase in the selling prices of medicines. On a quarter-to-quarter basis, however, margins may dip slightly because of lower volumes.

Finance costs fall sharply

One of the biggest positives in SEARL’s quarter is a 65% drop in finance costs compared to last year, and a 9% drop compared to the previous quarter. This is thanks to falling interest rates and a healthier balance sheet after debt repayments.

No dividend expected

While the financial performance is encouraging, SEARL is not expected to announce any dividend for this quarter. This suggests the company might be focusing on reinvesting profits or keeping cash reserves healthy.

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SEARL’s 4QFY25 performance shows that even in a quarter with slightly weaker sales, strong cost control and lower interest expenses can push profits higher. For investors, this quarter highlights the company’s ability to protect profitability through better margins and smarter financial management.

Source: Taurus Securities 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 →