Pharma sector struggles, top firms hold ground

TBS Infograph

Bangladesh's pharmaceutical industry has experienced a mixed performance in the fiscal year 2024-25, as most listed companies reported a year-on-year decline in profits despite seeing improved revenues. 

The overall downturn was largely driven by rising raw material costs, higher interest expenses on working capital, and increased operating expenses. These challenges have put pressure on profit margins, reflecting the impact of global economic uncertainties and domestic cost escalations on the sector.

While the broader industry struggled, several large and well-managed pharmaceutical firms continued to demonstrate steady growth throughout the year. Stronger operational efficiency, improved cost management, and sustained market demand supported their resilience. 

According to data from the stock exchange, nine pharmaceutical firms disclosed their annual financial statements for FY25. Among them, three companies posted profit growth, while six experienced negative growth during the period. 

However, Beximco Pharmaceuticals has not released its financial statements yet, as a court case is ongoing regarding the composition of its board. 

Losers

Ambee Pharmaceuticals reported a 45.16% decline in profit compared to the previous fiscal year. Despite this sharp drop, the company recommended a 10% cash dividend for its shareholders. 

A senior company official, speaking on condition of anonymity, said the overall pharmaceutical sector is navigating a challenging period amid uncertain economic conditions. 

"We are compelled to import raw materials at higher prices due to the appreciation of the US dollar. Rising operating expenses are also squeezing profit margins, which affects overall performance," the official added. 

The share price of Ambee Pharmaceuticals gradually declined by 10%, falling from Tk866 to Tk774 over the course of a month.

Renata Pharmaceuticals saw a 39% decline in consolidated earnings per share (EPS), dropping from Tk31.53 in FY24 to Tk19.36 in FY25. Despite the notable decrease in annual profits, the company recommended a 55% cash dividend for its shareholders. 

The firm also reported its financial results for the July-September 2025 quarter, in which its profit increased by 25% to Tk74.17 crore from Tk59.50 crore in the same quarter of the previous year. 

According to the company, growth in revenue and expansion of profit margins contributed to higher operating profit and improved EPS on a year-on-year basis, highlighting that some firms are able to navigate cost pressures through operational efficiency.

Among other companies, ACME Laboratories posted a slight decline in EPS, falling to Tk11.48 from Tk11.61, a drop of 1.12%. Asiatic Laboratories recorded a more significant decrease, with EPS declining 25.89% to Tk2.09 from Tk2.82. 

IBN SINA Pharmaceutical Industry experienced a moderate drop of 5.55%, as EPS fell to Tk20.27 from Tk21.46. Techno Drugs faced a sharp decline of 40.14%, with EPS falling to Tk1.76 from Tk2.94.

Winners

Square Pharmaceuticals, the country's leading drug manufacturer, reported a 15% rise in consolidated net profit to Tk2,397 crore for FY25, driven by strong performances from its subsidiaries and associate companies.

Its consolidated EPS stood at Tk27.04, while the net asset value (NAV) per share was Tk157.88. These consolidated figures included contributions from Square Pharmaceuticals Kenya EPZ Ltd, 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.

The board of Square Pharma has approved an investment of Tk650 crore for balancing, modernisation, rehabilitation, and expansion (BMRE), as well as for purchasing capital machinery and land acquisition.

The company aims to boost manufacturing capacity and introduce a new range of medicines, including biological and specialised treatments for cancer and chronic diseases. Since the Covid-19 pandemic in 2020, Square Pharma has invested approximately Tk2,000 crore in land, machinery, and BMRE projects to meet rising domestic and global demand.

Navana Pharmaceuticals also performed well, with EPS rising to Tk4.54 from Tk3.77, marking a 20.42% improvement driven by higher net sales and more efficient use of raw materials.

Beacon Pharmaceuticals achieved an even stronger performance, with EPS increasing sharply to Tk4.10 from Tk2.26, representing an 81.42% growth. 

These results highlight that while cost pressures continue to challenge the sector, companies with effective management, operational efficiency, and strong market presence are able to sustain profit growth.

What experts say

Industry insiders said Bangladesh's pharmaceutical sector faces several structural challenges that could limit long-term growth and competitiveness.

The industry is heavily dependent on imported Active Pharmaceutical Ingredients (APIs), invests minimally in research and development (R&D), and often struggles to meet international quality standards. 

These factors may hinder the sector's ability to compete in global markets, particularly after the country graduates from the Least Developed Country (LDC) category.

Additional challenges include a shortage of skilled labor, inadequate infrastructure, rising production costs, and occasional labor disruptions, all of which continue to constrain growth and stability, they added.