Leiner Pak Gelatine Limited (PSX: LPGL) was incorporated in Pakistan as a public limited company in 1983. The company is engaged in the manufacturing and sale of gelatin and di-calcium phosphate produced from animal bones. The company takes pride in producing and exporting Halal Gelatine derived from Halal animals slaughtered in an Islamic way. Leiner & Sons Great Britain Limited is the parent company of LPGL.
Pattern of Shareholding
As of June 30, 2025, LPGL has a total of 7.5 million shares outstanding which are held by 1218 shareholders. Directors, CEO, their spouse, and minor children have a majority stake of 45.88 percent in the company followed by local General Publicholding 44.82 percent shares.
Associated companies, undertakings, and related parties account for 8.63 percent of the outstanding shares of LPGL. The remaining shares are held by other categories of shareholders.
Historical Performance (2019-25)
Except for a downtick in 2020 and 2025, the topline as well as bottomline of LPGL has grownconvincingly over the years under consideration. The gross and operating margins of LPGL followed an upward trajectory until 2020 followed by a downtick in 2021.
However, its net margin slightly slid in 2020 followed by an uptick in 2021. In the subsequent two years, the company margins considerably rebounded. In 2024, all the margins registered a downtick. In 2025, gross and operating margins picked up to attain their optimum level while net margin narrowed. The detailed performance review of the period under consideration is given below.
LPGL’s topline grew by 3.64 percent year-on-year in 2019 to clock in at Rs. 779.66 million. This was on the back of some modifications in the sales mix. While local sales constituted the major portion of LPGL’s revenue pie, in 2019, the growth came on the back of a tremendous growth in the export sales of the company which surged from Rs.48 million in2018 to Rs.156 million in 2019 while local sales plunged from Rs.704 million in 2018 to Rs.624 million in 2019. Pak Rupee depreciation resulted in an increase in the cost of LPGL’s basic raw material (crushed bones), however, the same factor scaled up the export sales of the company.
Consequently, gross profit grew by 27.56 percent year-on-year in 2019 with GP margin clocking at 12.2 percent versus GP margin of 9.9 percent recorded in 2018. Distribution expense augmented by around 110.21 percent in 2019 mainly because of shipping charges, however, distribution expense stood at a meager 0.6 percent of the topline, hence didn’t affect the bottomline much.
Administrative expense magnified by 5 percent year-on-year in 2019 on account of rise in salaries and wages. LPGL’s operating profit boasted a stunning 91.31 percent rise year-on-year in 2019 with OP margin recorded at 4.1 percent versus OP margin of 2.2 percent posted in the previous year.
Finance cost increased by 58.51 percent year-on-year due to high discount rate coupled with increased short-term borrowings primarily to meet working capital requirements. LPGL’s gearing ratio stood at 39.85 percent in 2019 versus 39.10 percent in 2018. The company registered net profit of Rs.2.54 million in 2019 versus net loss of Rs.3.96 million registered in 2018. LPGL posted EPS of Rs.0.34 in 2019 as against loss per share of Rs.0.53 in 2018. NP margin stood at 0.33 percent in 2024.
2020 was marked by the outbreak of COVID-19 which dampened economic activity across various sectors of the economy, both locally and globally. During the initial quarters of FY20, LPGL had finalized huge sales orders with Malaysian clients which were expected to drive up the share of export sales to up to 50 percent of the total revenue. However, the lockdowns imposed across the world resulted in the revision in the delivery schedules of LPGL’s export orders and resulted in 15.23 percent year-on-year decline in the overall revenue of the company in 2020.
LPGL’s net sales clocked in at Rs.660.89 million in 2020. Local sales also showed a slump during the year due to tamed demand. While the cost of raw materials kept rising on the back of Pak Rupee depreciation, curtailed operations during the year resulted in 18.38 percent year-on-year dip in cost of sales, resulting in GP margin climbing up to 15.4 percent in 2020.
Distribution expense rose by 19 percent during the year mainly on account of commission on exports. Yet, distribution expense stood at 0.9 percent of the topline. Administrative expense shrank by 4.45 percent year-on-year during 2020 due to lower payroll expense.
Operating profit magnified by 25.23 percent year-on-year in 2020 with OP margin clocking in at 6.1 percent. Finance cost surged by 40.14 percent year-on-year in 2020 as discount rate was high during a major part of the year. Furthermore, borrowings also expanded as the company availed the Refinance Scheme of the SBP for the payment of salaries and wages. Conversely, the rise in short-term borrowings was mainly on account of loans from directors and relatives which were non-interest bearing. Gearing ratio surged to 44.32 percent in 2020.
High finance cost had a profound negative impact on the bottomline which contracted by 24 percent year-on-year in 2020 to clock in at Rs.1.93 million with NP margin of 0.3 percent. EPS nosedived to Rs.0.26 in 2020.
LPGL’s topline posted a striking turnaround in 2021 with year-on-year growth of 42.46 percent to clock in at Rs.941.52 million. The export orders to Malaysia which were held back due to COVID-19 restrictions were resumed during the year. Export orders rose to a massive 39 percent of the total sales mix of LPGL in 2021 as against its contribution of 23 percent during the previous year. It is to be noted that the Pak Rupee strongly appreciated during the year, which restricted the export proceeds of the company.
Moreover, inflation spree in the local economy drove up the prices of raw materials, resulting in 49.65 percent surge in the cost of sales. As a result, gross profit could only grow by 2.98 percent during the year while GP margin shrank to 11.14 percent in 2021. Distribution expense posted a drastic rise of 71.4 percent in 2021 and stood at 1.1 percent of sales. This was because the shipping companies made steep upward revisions in the freight charges after the trade activities resumed post COVID-19.
Conversely, administrative expense took 5.58 percent year-on-year nosedive in 2021 on account of lower payroll expense. While other income stood at less than 1 percent of the sales in all the years under consideration, in 2021, it posted 459.57 percent year-on-year jump in 2021 on the back of amortization of government grant. Operating profit posted 11.21 percent year-on-year uptick in 2021 while OP margin slumped to 4.7 percent.
Downward revisions in discount rate drove the finance cost down by 8.67 percent during the year. LPGL’s also obtained less short-term borrowings during 2020 while long-term financing grew on the back of SBP’s Refinance scheme. Gearing ratio inched down to 43.19 percent in 2021.
The bottomline grew tremendously by 159.54 percent year-on-year in 2021 to clock in at Rs.5 million in 2021 with NP margin of 0.53 percent. EPS clocked in at Rs.0.67 in 2021.
The upward trajectory of LPGL’s topline continued in 2022 with a reasonable 7.53 percent growth year-on-year to clock in at Rs.1012.39 million.
On the back of unstable indigenous economic and political backdrop, the company aggressively increased its export sales which not only boasted year-on-year rise of 23.5 percent in 2022 but also stood at 45 percent of the total revenue mix. Unprecedented level of inflation, which pushed up the prices of essential raw materials coupled with a hike in energy and gas tariff drove the cost of sales up by 3.69 percent during the year.
However, Pak Rupee depreciation and robust export sales enabled LPGL to attain 38.18 percent year-on-year growth in its gross profit with GP margin climbing up to 14.32 percent in 2022. On account of increased export sales, freight charges increased radically, pushing the distribution cost up by 196.27 percent in 2022.
Distribution cost stood at 3 percent of the topline in 2022. Administrative expense also magnified by 29.42 percent year-on-year in 2022 in line with inflationary pressure although LPGL streamlined its workforce from 222 employees in 2021 to 184 employees in 2022.
Operating profit rose by 12.83 percent year-on-year in 2022 and OP margin improved to 5 percent. Finance cost grew by 10.82 percent year-on-year in 2022 due to upward revisions in discount rate. The company significantly reduced its borrowings during the year. Gearing ratio fell to 28.47 percent in 2022. LPGL’s bottomline grew by 65.37 percent in 2022 to clock in at Rs.8.28 million with NP margin of 0.82 percent. EPS stood at Rs.1.1 in 2022.
LPGL’s topline posted a handsome 130.64 percent year-on-year growth in 2023 to clock in at Rs.2,335.02 million which was the highest ever revenue achieved by the company. The robust revenue proceeds came on the back of revision in the sales price of its products to account for cost-push inflation coupled with vigorous export sales realized at favorable exchange rates.
LPGL’s export sales registered staggering year-on-year growth of 226.44 percent in 2023 to grab 63.64 percent of the total sales mix. It was not long ago when export sales stood at a meager6.42 percent of LPGL’s sales mix in 2018. Local sales grew by 52.38 percent in 2023. Sky-rocketed inflation pushed the cost of sales up by 126.58 percent year-on-year in 2023.
LPGL posted 155 percent year-on-year rise in its gross profit with GP margin flying up to 15.8 percent. Robust export sales volume resulted in higher freight charges which resulted in 116.75 percent year-on-year surge in distribution cost in 2023. It is to be noted that the distribution expense which stood at 0.3 percent of LPGL’s sales in 2018, climbed to 2.8 percent of sales in 2023 on account of higher export sales.
Administrative expense escalated by 33.15 percent year-on-year in 2023 due to unsurpassed inflation level and workforce enhancement which pushed up the payroll expense. LGPL’s workforce stood at 191 employees in 2023. Other expense multiplied by over 2523.71 percent during 2023due to sales tax written off during the year as well as exchange loss incurred during the year.
Other income tumbled by 89.51 percent in 2023 as the company didn’t record any exchange gain during the year and also because of lower gain recorded on the disposal of fixed assets in 2023. Operating profit posted an incredible 216.45percent rise in 2023 with OP margin standing at its highest level of 6.83 percent.
Finance cost didn’t show any mercy and posted a sharp 94.83 percent year-on-year growth in 2023 on the back of high discount rate and an uptick in short-term borrowings. Gearing ratio climbed to 31.54 percent in 2023. Net profit grew by an astounding 705.72 percent year-on-year in 2023 to clock in at 66.67 million with NP margin of 2.9 percent and EPS of Rs.8.89.
LPGL’s success story continued in 2024 with 43.23 percent year-on-year rise in its topline which clocked in at Rs.3344.53 million. This was the result of the company’s growing focus on the export market. Export sales grew by 54.44 percent in 2024 to form 68.62 percent of LPGL’s net sales in 2024.
Relative stability in the value of local currency coupled with record inflation level and an upsurge in energy prices as well as elevated cost of raw materials yielded a lower GP margin of 12.49 percent in 2024. Gross profit recorded 13 percent year-on-year improvement during 2024. Distribution expense slid by 2 percent in 2024 due to lower shipping charges which might be because of stable fuel charges.
Administrative expense escalated by 30.59 percent in 2024 due to elevated payroll expense, vehicle running & maintenance charges as well as repair & maintenance charges incurred during the year. Number of employees slightly increased to clock in at 202 in 2024.Other expense dropped by 59.84 percent in 2024 due to high-base effect as the company wrote off sales tax and incurred massive foreign exchange loss during 2023. Other income inched up by 5.75 percent in 2024 due to higher gain recorded on the disposal of fixed assets in 2024.
LPGL’s operating profit multiplied by 35.14 percent in 2024 with OP margin inching down to 6.44 percent. Finance cost surged by 59.19 percent during the year owing to higher discount rateand increased borrowings. Gearing ratio ticked down to 30.31 percent in 2024 due to higher cash & bank balances and increase in equity. Net profit strengthened by 22.27 percent year-on-year to clock in at Rs.81.52 million in 2024 with EPS of Rs.10.87 and NP margin of 2.44 percent.
The phenomenal sales growth exhibited by LPGL in recent years could no longer persist as the company recorded 51.31 percent plunge in its net sales in 2025. LPGL’s net sales stood at Rs.1628.61 million in 2025. This was due to 59.55 percent lower export sales to the tune of Rs.928.311 million recorded in 2025 on account of slowdown of the global economy.
Another reason for lesser exports in 2025 was inventory adjustments by the international customers who wanted to squeeze their stock to pre-COVID level. In the local market, the company had to revise its prices downward to increase its market share as low purchasing power of consumers had led to dampened demand for gelatin in the local market.Besides, availability of low-cost substitutes also grabbed the share of high-qualitygelatin, particularly in the local confectionary industry.
Local sales deteriorated by 33.28 percent to clock in at Rs. 700.301 million in 2025. Cost of sales dipped by 53.69 percent in 2025 due to stable local currency and decline in the prices of commodities in the international market. While gross profit contracted by 34.60 percent in 2025, GP margin greatly improved to attain its highest level of 16.78 percent.
Distribution expense fell by 21.24 percent in 2025 due to lesser shipping expense on the back of thinner export volumes. Administrative expense also tumbled by 11.68 percent in 2025 primarily due to lesser travelling & conveyance charges, vehicle running charges as well as repair & maintenance charges incurred during the year.
The company also streamlined its workforce from 202 employees in 2024 to 194 employees in 2025, however, payroll expense continued to enlarge on the back of inflationary pressure. Other expense plummeted by 9.12 percent in 2025 due to lower profit related provisioning and allowance for ECL recorded during the year.
LPGL recorded other income of Rs.11.62 million in 2025, up from other income of Rs.0.52 million posted in 2024 due to reversal of provision for doubtful debts, foreign exchange gain, and liabilities no longer payable written back during the year. Operating profit dampened by 48.36 percent in 2025, however OP margin rose to 6.83 percent.
Finance cost tumbled by 19.13 percent in 2025 due to monetary easing while borrowings continued to rise. Gearing ratio inched down to 27.01 percent in 2025 due to higher cash & bank balances and increased equity. Net profit tapered off by 80.59percent to clock in at Rs.15.82 million in 2025. This translated into EPS of Rs.2.11 and NP margin of 0.97 percent in 2025.
Recent Performance (1QFY26)
During the first quarter of the ongoing fiscal year, LPGL recorded 20 percent decline in its topline which clocked in at Rs.200.43 million. This was due to sluggish demand in both local and export markets. In export market, economic slowdown, and downward adjustment in the inventory levels by some major customers led to lower sales volume. In local market, availability of cheaper alternatives seized the market share of high-quality gelatin.
Cost of sales slid by 16.45 percent – much lesser than the topline slide – owing to lesser absorption of fixed overheads on the back of lower capacity utilization. LPGL recorded 29.20 percent thinner gross profit in 1QFY26 with GP margin clocking in at 24.67 percent versus GP margin of 27.87 percent recorded in 1QFY25. Dejected sales volume resulted in 54 percent plunge in distribution expense in 1QFY26.
Administrative expense ticked up by 3.85 percent in 1QFY26 seemingly due to higher payroll expense on account of market induced rise in salaries and wages. Lesser provisioning done for WWF and WPPF appears to be the cause of lesser other expense in 1QFY26. Operating profit deteriorated by 48 .83 percent in 1QFY26 with OP margin slipping down to 7.59 percent versus OP margin of 11.87 percent recorded in 1QFY25.
Monetary easing and lesser outstanding borrowings translated into 54.16 percent thinner finance cost in 1QFY26. Net profit clocked in at Rs.2.46 million in 1QFY26, down 44.84 percent year-on-year. This translated into EPS of Rs.0.33 in 1QFY26 versus EPS of Rs.0.59 recorded in 1QFY25. NP margin also tumbled from 1.78 percent in 1QFY25 to 1.23 percent in 1QFY26.
Future Outlook
With LPGL’s increased focus on export markets, its topline is expected to achieve new heights in the coming times. This could be attained once the foreign buyers adjust their inventory levels, which are expected to be completed in 2026.
The company is also focusing on cost optimization and revising its price in the local market to encourage confectionary customers to buy high quality gelatin instead of cheaper alternate products. To diversify its sources of income, the company has signed an agreement with its related party, Leiner Gelatine SDN BHD Malaysia, to supply gelatin manufacturing equipment and machinery. This would further aid the financial performance of LPGL in the coming times.