PACRA Maintains the Entity Ratings of AGP Limited

The ratings of AGP Limited reflect its established presence in Pakistan's pharmaceutical sector and its strategic importance within the OBS Group. AGP has maintained its position across multiple therapeutic segments including gastroenterology, respiratory, cardiometabolic, gynecology, ophthalmology, orthopedics, neuropsychiatry, pediatrics, nutraceuticals, and others. The Company benefits from a diversified product portfolio comprising brands such as Azomax, Rigix, Osnate D, Norvasc, Ceclore, and other prescription medicines marketed through AGP and its subsidiaries. According to the latest available IQVIA rankings, the OBS group ranked 7th, and AGP consolidated ranked 15th. The Company operates through three GMP-compliant manufacturing facilities and maintains an extensive nationwide distribution arrangement through Muller & Phipps Pakistan (Private) Limited, which remains a key channel partner. Pakistan's pharmaceutical industry continued to demonstrate resilience during 1HCY26, supported by population growth, increasing healthcare awareness, expanding healthcare access, and gradual regulatory improvements. The deregulation of non-essential medicine pricing has provided pharmaceutical manufacturers additional flexibility in managing pricing pressures and cost inflation. Demand fundamentals remained favorable across chronic care, respiratory, diabetes, cardiovascular, and nutritional segments. However, the industry continues to face challenges arising from currency fluctuations, imported raw material dependence, and competitive pricing pressures. Nonetheless, the sector's medium-term outlook remains supported by increasing healthcare expenditures and growing demand for quality branded generics. AGP's governance framework remains supported by board-level oversight, independent representation and established committee structures. The ownership structure remains stable under the OBS Group, supporting business continuity and operational consistency. During 1HCY26, the Company recorded consolidated revenue of PKR 11,526mln, reflecting a decline of ~20% on an annualized basis (CY25: PKR 28,890mln). The decline was primarily attributable to lower exports following the closure of the Afghanistan border, a comparatively shorter winter season, and softened demand for the Company's products. Despite the revenue contraction, the Company maintained healthy gross and net profit margins of 59% and 14%, respectively. The financial profile remained adequate, supported by comfortable coverage indicators and cash flows. However, the net working capital cycle lengthened during the period under review. The capital structure remained leveraged, reflecting borrowings undertaken to finance acquisitions, modernization initiatives, and capacity expansion plans. Going forward, the Company is expected to benefit from its diversified product portfolio and established market presence. Growth prospects are expected to be supported by the commercialization of recently acquired brands, introduction of new molecules, continued portfolio expansion, and deeper penetration within existing therapeutic areas.
The ratings remain contingent on the sustainability of topline growth and profitability. Adequate cash flows and access to alternative funding sources for debt servicing are critical, while adherence to internally defined leverage thresholds is a key requirement.

About the Entity
AGP Limited (AGP) is a Listed Public Limited Company, operating in the pharmaceutical sector of Pakistan since 1989. AGP is primarily owned by OBS Group (OBS) through Aitken Stuart Pakistan (Pvt.) Ltd., which holds a ~55.80% stake. Other significant shareholders include Muller & Phipps Pakistan (Pvt.) Ltd (M&P). (~13.54%), Baltoro Growth Fund (BGF) (~1.33%) and Aspin Pharma Limited (~4.79%). The remaining shares are held by the general public. The seven-members of Board of Directors comprises two independent directors, three representatives of the OBS Group, and one each of M&P and BGF. Mr. Tariq Moinuddin Khan is the Chairman whereas Mr. Muhammad Kamran Nasir is the CEO of the Company. Both have over 3 decades of diverse professional experience.