According to a report by Topline Pakistan Research, Citi Pharma (CPHL) announced its 4QFY25 results today. The company recorded earnings of Rs 214 million (EPS of Rs 0.94), reflecting a 41% year-over-year (YoY) increase but a 3% quarter-over-quarter (QoQ) decrease. This brings the total earnings for FY25 to Rs 892 million (EPS of Rs 3.90), which is a 7% increase YoY.

In conjunction with the results, the company declared a final cash dividend of Rs 3.50 per share, with a payout ratio of approximately 90%, aligning with our expectations.

CPHL’s net sales increased by 6% YoY to Rs 3.0 billion in 4QFY25, although there was a 9% decline compared to the previous quarter. For FY25, total sales reached Rs 13.1 billion, marking a 6% increase YoY.

The company reported gross margins of 18% in 4QFY25, compared to 8% in 4QFY24. This resulted in full-year FY25 gross margins of 15%, up from 13% in FY24. We attribute the increase in gross margins to the company’s strategic shift from active pharmaceutical ingredients (APIs) to the higher-margin formulations segment.

Distribution expenses in 4QFY25 decreased by 6% YoY, though they increased by 99% QoQ to Rs 72 million.

The finance cost decreased by 1% YoY and QoQ; however, it rose by 10% YoY in FY25 due to an increase in short-term debt. Specifically, short-term debt grew from Rs 1.4 billion in June 2024 to Rs 2.8 billion in June 2025.

The effective tax rate in 4QFY25 was 34%, compared to 25% in 3QFY25 and 7% in 4QFY24. For FY25, the effective tax rate…x rate was recorded at 34% compared to 35% in FY24