AGP Limited reported a net profit of PKR 2.08 billion (EPS: PKR 7.44) in CY24, reflecting a 75% increase compared to PKR 1.19 billion (EPS: PKR 4.25) in the previous year. Net sales rose 34% YoY to PKR 18.54 billion, while consolidated revenue reached PKR 25.03 billion, up from PKR 18.74 billion in SPLY.
Growth was driven by a 21% increase in volumes and a 13% price impact. Consolidated gross margins improved to 58.1% from 53.6% in the SPLY, while operating margins expanded to 28.5% from 22.7%, attributed to successful price adjustments and operational efficiencies. Management highlighted that recent acquisitions have contributed significantly to performance, with a 5-year consolidated revenue CAGR of 38%, of which 52% was driven by inorganic growth. The company’s portfolio comprises 128 brands across more than 270 SKUs. Key revenue contributors included Azomax (PKR 4 billion), Rigix (PKR 3 billion), Osnate-D and Norvasc (each at PKR 2 billion), and Ceclor (PKR 1 billion).
Products such as Spasler-P and Ceclor are on track to achieve PKR 2 billion and PKR 1 billion in sales, respectively. Finance costs increased due to acquisitions made in CY23 and higher interest rates; however, the company remains committed to debt reduction, targeting retirement of PKR 1.15 billion related to the Sandoz portfolio by CY26.
Management expects complete long-term debt repayment over the next four to five years, improving the balance sheet and profitability. AGP’s portfolio maintains a chronic-to-acute split of 27-28% to 72-73%, while the essential to non-essential composition stands at 7:93 standalone and 38:62 consolidated. New market segments have been targeted, with recent launches in ophthalmology (market size of PKR 7-10 billion) and urology (market size of PKR 5 billion).
Additionally, Imeglimine is under evaluation, and Tofacitinib has already crossed PKR 500 million in sales. Management noted that 1Q and 4Q are typically the strongest quarters. The effective tax rate is expected to be higher in CY25 due to the normal tax regime and super tax.
Regarding geopolitical risks, management indicated that the ongoing India-Pakistan conflict would affect only 20% of imports by value (14% by volume), with alternate sourcing already secured. The tariff war is expected to have minimal impact. Meanwhile, deregulation of the pharmaceutical sector is not expected to materially affect the company since most price adjustments were implemented in December 2024.
Looking ahead, AGP targets double-digit volume growth to gain market share, expand its institutional and OTC businesses, and improve the chronic-acute portfolio balance. Export market development is a strategic focus to hedge against PKR depreciation, with export revenues targeted at PKR 2–3 billion in the medium term. Institutional sales are projected to rise from PKR 800–850 million to PKR 1.25–1.5 billion in CY25 with new contracts.
The company expects to maintain a gross margin of 58% and improve net margins to 19.8% post debt repayment. Finance costs are anticipated to decline following expected interest rate cuts. Management remains committed to top-line growth while emphasizing bottom-line improvement, without any planned increase in leverage. Exports are expected to grow significantly over the next three years
Important Disclosures
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