Drug makers post double-digit profit growth in FY26 on strong demand

The leading drug makers posted double-digit profit growth year-on-year in FY26, supported by strong sales amid sustained demand for medicines both at home and abroad.

Sales of lifesaving drugs increased due to strong local demand, while leading companies successfully managed to keep operating costs down, securing higher bottom-line growth, say industry insiders.

The sector’s performance stands out at a time when most other industries, including multinational companies, are grappling with elevated energy costs amid persistent inflationary pressure.

The growing population, coupled with rising awareness of healthcare needs, has amplified demand for generic medicines in the local market, particularly for chronic diseases.

Moreover, the aftermath of the Covid-19 pandemic has further underscored the importance of healthcare, leading to a heightened focus on medical preparedness and infrastructure, which in turn has positively impacted the pharmaceutical industry over the past few years.

Akramul Alam, head of research at Royal Capital, said people now prioritise healthcare spending more than before. “This resilience allows leading pharmaceutical companies to sustain strong revenue and profit growth.”

Recurring outbreaks of diseases such as measles and dengue boosted demand for medicines across the country, said Muhammad Zahangir Alam, chief financial officer (CFO) of Square Pharmaceuticals.

Rising life expectancy and population growth also contributed to the increased consumption of pharmaceutical products.

The aggregate profits of nine major drug makers jumped nearly 26 per cent year-on-year to Tk 47.32 billion in FY26.

Among the companies, Square Pharmaceuticals reported the highest profit of Tk 27.7 billion in FY26, up 15 per cent from the previous fiscal year.

The country’s largest drug manufacturer also posted 13 per cent growth in sales to Tk 86.06 billion in FY26.

Square Pharma attributed its sustained growth to rising domestic demand for healthcare products, export earnings and income from subsidiaries.

Alongside domestic sales growth, Square Pharmaceuticals’ exports surged 50 per cent year-on-year to $27 million in FY26.

“The drug maker continues to grow in both sales and profit, owing to strong consumer trust in its products,” said Akramul Alam of Royal Capital.

He said Square Pharmaceuticals has a competitive advantage in producing high-quality generic medicines at relatively low costs, supporting its long-term growth prospects.

Renata, another major drug maker, posted 64 per cent year-on-year profit growth, supported by stronger operating performance and lower finance costs following a capital restructuring initiative.

The company also cited better gross margins, efficient procurement and tighter control over expenses as drivers of its growth.

Renata’s revenue growth remained modest, at 7 per cent year-on-year to Tk 46.2 billion in FY26.

Shahidul Islam, chief executive officer of VIPB Asset Management, said efficient financial management had helped several drug makers reduce costs, leading to strong bottom-line growth.

Referring to Renata’s performance, he said the company’s revenue growth was not particularly significant in the year, but improved financial management helped restore profitability after a prolonged period of pressure.

Ali Imam, chief executive officer of EDGE Asset Management, said the growth narratives of pharmaceutical companies were quite different from one another.

Following the outbreak of Covid-19, Renata faced financial difficulties due to sharp currency depreciation, which increased the burden of foreign currency-denominated loan repayments.

Although the company has recovered, it has yet to return to its pre-pandemic profit levels.

Beximco Pharmaceuticals recorded a profit of Tk 9.16 billion in FY26, registering a 31 per cent year-on-year increase.

Mr Imam attributed the strong performance to changes in the company’s board, saying a reduction in informal expenses might have contributed to higher profitability.

IBN Sina Pharmaceutical Industry also delivered strong results, with its profit rising 25 per cent and sales 17 per cent, reflecting improved operational performance.

Asiatic Laboratories recorded the highest profit growth among its peers, with earnings surging 124 per cent year-on-year. The company said higher sales, lower input costs, efficient production planning and prudent financial management were the main drivers of the earnings growth.

Beacon Pharmaceuticals’ profit more than doubled to Tk 1.94 billion in FY26, buoyed by 31 per cent growth in sales.

By contrast, Techno Drugs’ profit declined 14 per cent year-on-year to Tk 199 million, weighed down by lower sales and higher operating costs.

Although Advanced Chemical Industries (ACI) remained in the red at the consolidated level, its pharmaceutical segment continued to register growth, supported by higher sales.

Bangladesh’s pharmaceutical industry, which meets around 98 per cent of domestic demand, remains one of the country’s major industrial success stories.

Mr Alam, of Royal Capital, said continued investment, regulatory compliance and the availability of a skilled workforce would be crucial to sustaining the industry’s growth and expanding its presence in overseas markets.

Source: The Business Standard