Pakistan’s pharmaceutical sector is expected to post a sharp recovery in profitability during the third quarter of CY26, driven by stronger sales volumes, margin expansion and the positive impact of pricing reforms, according to AKD Research.
In a report released on Thursday, AKD Research projected that profitability of its pharmaceutical universe would surge 114 per cent year-on-year to Rs11.46 billion in 3QCY26. On a sequential basis, earnings are estimated to grow 64 per cent compared with the preceding quarter.
“Pharma sector’s profitability increased by 114 per cent YoY in 3QCY26, driven by higher domestic sales volumes and improved margins,” the report stated.
The brokerage attributed the improvement in gross margins to the deregulation of non-essential drug prices, lower inventory losses and improved product mix optimisation. Revenue of the sector is expected to increase 25 per cent year-on-year and nine per cent quarter-on-quarter amid robust demand and stronger prescription trends.
Among major listed companies, Abbott Laboratories Pakistan, GlaxoSmithKline Pakistan and The Searle Company are projected to record gains in profitability, while Haleon Pakistan is expected to return to profit during the quarter.
AKD Research noted that sector earnings are also benefiting from stable exchange rates, easing inflationary pressures and better cost controls. According to the report, Abbott, Searle and Glaxo are expected to witness profitability growth of 40 per cent, 33 per cent and 28 per cent, respectively, largely due to gross margin expansion and operating efficiencies.
Looking ahead, the brokerage maintained a positive outlook on the pharmaceutical sector, citing favourable demographics, gradual recovery in consumer demand and the potential for export market expansion.
“Among key players, we prefer Glaxo, Haleon and Hinoon based on expected earnings growth, strong brand equity, optimal portfolio mix and expanding export opportunities,” AKD Research said.
However, it cautioned that exchange-rate volatility, regulatory developments and competitive pressures remain key risks for the secto
