Square Pharma unveils Tk650cr expansion plan, declares record 120% dividend
Square Pharmaceuticals PLC, the country's leading drug manufacturer, has announced a Tk650-crore investment plan to expand its operations and product line, alongside declaring the highest dividend in its corporate history – a 120% cash payout for the 2024-25 fiscal year.
The board of Square Pharma has approved an investment of Tk650 crore to be used for balancing, modernisation, rehabilitation, and expansion (BMRE), the purchase of capital machinery, and land acquisition. The company aims to boost its manufacturing capacity and introduce a new range of medicines, including biological and specialised treatments for cancer and chronic diseases.
Since the outbreak of Covid-19 in 2020, Square Pharma has already invested around Tk2,000 crore in land, machinery, and BMRE projects to meet the increasing domestic and global demand for pharmaceuticals.
Keep updated, follow The Business Standard's Google news channel
Muhammad Zahangir Alam, chief financial officer of Square Pharma, told TBS that the new investment is part of the company's long-term strategy to strengthen its market leadership.
"To expand our footprint in the pharmaceutical industry, we have been investing continuously. The new Tk650 crore investment will help increase our production of biological and chronic disease medicines and further modernize our factories through the adoption of new technologies," he said.
Industry insiders note that Bangladesh's growing population, rising health awareness, and the increasing burden of chronic illnesses like diabetes, hypertension, and cancer have driven sustained growth in the pharmaceutical market. The post-pandemic emphasis on healthcare infrastructure has further boosted medicine consumption nationwide.
However, the sector also faces challenges, notably a heavy reliance on imported raw materials – especially active pharmaceutical ingredients (APIs) from China and India. This dependency exposes local manufacturers to global supply disruptions and price volatility.
Record dividend for FY25
The company's board has recommended a 120% cash dividend for FY25 – equivalent to Tk12 per share – marking the highest payout in its corporate history. In FY24, Square Pharma declared a 110% cash dividend.
The annual general meeting (AGM) is scheduled for 15 December, with the record date set for 16 November.
Square Pharmaceuticals reported a 15% rise in consolidated net profit to Tk2,397 crore for FY25, driven by strong performances from its subsidiaries and associates. The company's consolidated earnings per share (EPS) stood at Tk27.04, while its net asset value (NAV) per share was Tk157.88 and net operating cash flow per share (NOCFPS) was Tk19.52.
These consolidated figures include contributions from its foreign subsidiary, Square Pharmaceuticals Kenya EPZ Ltd, its local subsidiary Square Lifesciences Ltd, and three associate companies – Square Textiles, Square Fashions, and Square Hospitals.
However, the company's standalone profit declined by 5% to Tk1,474 crore.
According to CFO Jahangir Alam, the dip was mainly due to the strategic transfer of several products to Square Lifesciences Ltd.
"We transferred a number of medicines to our subsidiary company for tax optimisation and operational efficiency, which affected standalone profit but did not impact consolidated performance," he said. "Such strategic moves are part of our long-term plan to enhance shareholder returns."
Stock performance and market position
Square Pharma, which has been listed on the stock exchanges since 1995, saw its shares close at Tk213 today. The company's market capitalisation stood at Tk18,881 crore, making it the second-largest firm on the Dhaka Stock Exchange (DSE).
In a show of confidence, four of the company's directors have collectively purchased 1.36 crore shares worth approximately Tk280 crore since 2020. As a result, the sponsors and directors' combined stake has risen to 42.91%, up from 34.43% in FY19, according to DSE data.
Market analysts interpret these purchases as a strong signal of confidence in the company's long-term growth prospects. The consistent buying by its top executives underscores their belief in Square's financial strength and sustainable business model.
Founded in 1958 by the late Samson H Chowdhury, Square Pharmaceuticals began its journey at a time when Bangladesh's medicine market was dominated by multinational corporations. Today, it produces around 1,000 types of medicines, with its flagship gastric relief brand Seclo leading in sales.
Square Pharma was also the first Bangladeshi company to export medicines abroad in 1987. Currently, it exports to 42 countries across Asia, Africa, and Latin America.
