Renata profit jumps 64% on operational, management efficiencies

Renata, one of Bangladesh's leading pharmaceutical manufacturers, reported a 64% increase in consolidated profit to Tk364 crore in FY26 from Tk222 crore in FY25, driven by operational and management efficiencies, lower financing costs, and strong volume-driven sales.

According to its financial statements, Renata's consolidated revenue grew only 7.7% year-on-year to Tk4,620 crore in FY26 despite the significant increase in profit. 

The company recommended a 55% cash dividend, equivalent to Tk5.50 per share, unchanged from the previous fiscal year. At a board meeting today (17 October), the drug-maker approved its annual financial statements and recommended the dividend.

The annual general meeting (AGM) is scheduled for 19 December and will be held virtually. The record date for determining shareholders' eligibility for the dividend is 15 November.

In a press statement, the company attributed the profit growth to operational efficiencies, lower financing costs and higher sales volumes in domestic and international markets, despite persistent macroeconomic pressures, pricing constraints, and global geopolitical uncertainties.

Growth was led by its core domestic pharmaceutical segment, which accounted for more than 70% of total revenue and expanded 11.6%. Its export, consumer and agro businesses also recorded steady growth.

Revenue from animal health remained almost flat year-on-year, while contract manufacturing revenue declined 11.9%.

Infographic: TBS

Revenue at both subsidiaries also increased, with Renata Pharmaceuticals (Ireland) Limited growing 12.2% and Renata (UK) Limited 13.8% from the previous fiscal year.

The company attributed the improvement in profitability to higher gross margins, supported by effective procurement, operational efficiency and disciplined inventory management, alongside significantly lower financing costs following strategic capital restructuring.

Gross profit increased 17.9%, while earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 34.5%, according to the financial statements.

During the year, Renata continued to pursue its long-term growth strategy through investments in manufacturing capacity expansion, automation and renewable energy integration. It also expanded its pipeline of bioequivalent products to strengthen its position in domestic and international markets.

Debt burden declines

Renata strengthened its capital structure during FY26, reducing its total debt by Tk459 crore.

Following the reduction, the company's outstanding debt stood at Tk1,429 crore, comprising Tk978 crore in long-term debt and Tk451 crore in short-term liabilities.

As its debt burden declined, net financing costs fell 22.4% in FY26 compared with the previous year.

The company attributed the reduction to a 24.9% decline in gross interest expenses before interest capitalisation, driven by continued capital restructuring. 

This included a shift from short-term borrowing to lower-cost long-term funding, supported by an International Finance Corporation loan facility and the issuance of Tk325 crore in convertible preference shares in October 2025.

Interest capitalisation declined 52.1%, primarily reflecting the capitalisation of major capital work-in-progress projects, including the Kashor General Facility (Solid), and a robotic warehouse. Interest income from surplus funds held in interest-bearing accounts increased 33.4%.

Foreign exchange losses also fell 86.8%, which the company attributed to risk-management measures, including the adoption of hedge accounting, efficient use of forward contracts and relatively stable exchange rates during the year.

Changes introduced in the national budget for FY27, which had a retrospective impact on the income year 2025-26, also generated significant corporate income tax savings. These were recognised in the fourth quarter of FY26, the company said