Hoechst Pakistan Limited (HPL) reported Consolidated earnings per share of PKR 300.69 for CY25, compared to PKR 192.55 in CY24. Furthermore, in 4QCY25, the company reported earnings per share of PKR 71.48, compared to earnings per share of PKR 67.63 in the same period last year (SPLY).
The company crossed a major psychological barrier, achieving sales of PKR 31 bn for the first time. Since its acquisition by the Packages Group three years ago, sales have grown from PKR 18 bn to PKR 31 bn. Management reported a significant improvement in GP margins, rising from 32% to 37%. This was achieved through margin efficiency initiatives, including price renegotiations with existing suppliers and the development of alternate suppliers. Administrative costs were reduced by 7%, with these savings reinvested into marketing and distribution to expand the company’s territorial footprint.
Management noted that API availability remains stable, particularly from China, with no significant disruptions at present. The Middle East crisis has not directly impacted API prices yet however, it has resulted in routing changes, adding 10–20 days to certain shipments. The company maintains a healthy stock coverage of 3.5 to 4 months across the supply chain, providing a sufficient buffer. Higher oil prices are viewed as a logistics shock, primarily impacting diesel costs for transportation rather than directly affecting API molecule pricing. The product mix includes approximately 42%–45% locally manufactured products, while licensing and distribution account for roughly 55%–58% of the portfolio, of which 35% represents pure distribution, primarily sourced from Sanofi.
The pharmaceutical industry is currently constrained by CPI linked price increases capped at 70% of CPI. Management expects a price increase of only 4% to 4.5% this year, which they described as insufficient to absorb rising costs in utilities, fuel, and Euro denominated raw materials which experienced a 13% devaluation. Despite the deregulation of certain products, HPL remains conservative in implementing price increases to maintain competitiveness and ensure product affordability for patients.
HPL’s total exports, amounting to PKR 1.5 billion, are entirely directed toward Afghanistan. Current border restrictions pose an immediate risk, if the border remains closed for 2–3 months, it could significantly impact this year’s export targets.
Important Disclosures
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