Otsuka Pakistan Limited (PSX: OTSU) was incorporated in Pakistan as a public limited company in 1988.
The principal activity of the company is the manufacturing, marketing and distribution of intravenous infusions besides trading in pharmaceutical products, medical equipment and nutritional foods. OTSU is an indirect subsidiary of Otsuka Pharmaceutical Company Limited, Japan.
Pattern of Shareholding
As of June 30, 2025, OTSU has a total of 12.1 million shares outstanding which are held by 1549 shareholders. Associated companies, undertakings and related parties are the largest shareholders of OTSU accounting for 67.89 percent of its outstanding shares.
Local general public has 25.98 percent stake in the company while foreign general public holds 4.42 percent shares. The remaining shares are held by other categories of shareholders.
Historical Performance (2021-25)
OTSU’s topline posted year-on-year growth over the period under consideration; however, its bottomline ascended only in 2021 and 2025. In 2023 and 2024, the bottomline ended up in the negative zone. The margins of the company followed by an upward trajectory in 2020 and 2021 only to lose their footing in 2022 and 2023.
In 2024, gross margin continued to fall while operating margin picked up. In 2025, all the margins strengthened. The detailed performance review of the period under consideration is given below.
OTSU’s topline multiplied by 14.34 percent year-on-year to clock in at Rs.2546.28 million in 2021. This was primarily on the back of sales of clinical nutritional products. With the eruption of COVID-19, the medical devices business came under pressure but the company adeptly altered its sales mix to include clinical nutritional products to optimize its sales volume and earn better margins.
During 2021, the company produced 20.3 million bottles of IV solution and 14.6 million bottles of Plastic ampoules, resulting in the capacity utilization of 64.6 percent and 69.5 percent respectively.
During the year, the company also increased its production capacity to 31.4 million bottles of IV solutions and 21 million bottles of plastic ampoules as against the rated capacity of 20.3 million bottles and 14.6 million bottles respectively until 2020.
Cost of sales grew by only 4.51 percent year-on-year in 2021 as the year ended with stronger Pak Rupee coupled with cost optimization measures put in place by the company. Gross profit strengthened by 41 percent year-on-year in 2021 with GP margin climbing up to 33.20 percent from 26.90 percent in 2020.
Distribution and administrative expense rose by 4.26 percent and 9.1 percent respectively in 2021 due to higher payroll expense and elevated outward freight and handling charges. During the year, the company also introduced a new product OTSUFLOX (Ciprofloxacin).
Other income grew by a massive 133.57 percent in 2021 on the back of hefty exchange gain recognized during the year due to favorable exchange rates. Other expense plummeted by 21.27 percent year-on-year in 2021 as there were no exchange losses and provision against doubtful debts.
Operating profit grew by 170.93 percent in 2021 with OP margin climbing up to 19.18 percent from 8 percent in 2020. Finance cost slid by 74 percent year-on-year in 2021 due to lower discount rate coupled with lesser outstanding borrowings as the company settled its short-term running finance during the year.
Due to tremendous profit, the company’s equity grew. This translated into gearing ratio of 41.85 percent versus 89.57 percent in the previous year. Net profit grew by 324.23 percent year-on-year to clock in at Rs.386.33 million in 2021. This translated into NP margin of 15.17 percent and EPS of Rs.31.93 in 2021 as against NP margin of 4 percent and EPS of Rs.7.53 recorded in the previous year.
In 2022, 12 percent year-on-year growth was recorded in OTSU’s topline which clocked in at Rs.2851.73 million. This was the result of streamlined sales mix. Clinical nutrition products drove up sales in 2022 while medical equipment segment continued to stay under pressure.
The capacity utilization of IV solutions grew to 70 percent in 2022 while plastic ampoules segment posted a reduced capacity utilization of 47 percent. Double digit inflation, depreciation of Pak Rupee and high energy charges pushed the cost of sales up by 13.17 percent in 2022.
Gross profit inched up by 9.64 percent year-on-year in 2022 with GP margin marginally dipping to 32.49 percent. Higher freight charges, advertisement and promotional expense coupled with increased payroll expense resulted in 25.16 percent year-on-year hike in distribution expense in 2022.
Administrative expense also rose by 31.86 percent year-on-year in 2022 despite downtick in the number of employees to 373 in 2022. This was the effect of unprecedented level of inflation and the related rise in salaries and wages.
Other income tumbled by 43.52 percent year-on-year in 2022 due to no exchange gain recorded in 2022. Conversely, other expense grew by 60.81 percent year-on-year on account of exchange losses. Operating profit slumped by 23.98 percent year-on-year in 2022 with OP margin slipping to 13 percent.
Finance cost continued its downward journey despite higher discount rate as the company paid off its long-term loans. Short-term loans slightly increased in 2022 but most of them were obtained from related parties at subsidized rates.
The gearing ratio further tapered off to 38.36 percent in 2022 as equity grew due to profit reocrded over the years. Net profit shrank by 40 percent in 2022 to clock in at Rs.231.80 million with NP margin of 8.1 percent. EPS slipped to Rs.19.16 in 2022.
In 2023, OTSU’s topline inched up by 6.43 percent to clock in at Rs.3035.09 million. Medical devices segment was still struggling during the year, however, the new ORS sachet launched by the company during the year received positive response from the market.
While DRAP approved price increase w.e.f August 2022, massive decline in the value of local currency, persistent hike in fuel, gas and power prices as well as implementation of final sales tax on both the purchase of pharmaceutical inputs and sale of finished goods drove up cost of sales by 24.21 percent in 2023.
Gross profit slid by 30.51 percent in 2023 with GP margin, diving down to 21.22 percent. Distribution expense inched up by 3.19 percent in 2023 due to inflationary pressure. Administrative expense went down by 10.31 percent in 2023 due to lower payroll expense as headcount was reduced to 362 in 2023.
Other income registered a staggering rise of 68 percent in 2023 due to hefty gain recorded on the sale of fixed assets, reversal of impairment loss on Orthopedic knee implant kits as well as higher scrap sales and late charges received from Hospital Supply Corporation.
The effect of robust other income was completely wiped off by 77.47 percent hike in other expense on account of exchange loss. Operating profit dwindled by 90.34 percent in 2023 with OP margin sliding down to 1.18 percent.
Finance cost mounted by a massive 863.59 percent in 2023 due to unprecedented level of discount rate and increase in the external borrowings particularly for the renovation of its Line-II facility. Gearing ratio climbed up to 57.7 percent in 2023. OTSU recorded net loss of Rs.7.207 million in 2023 with loss per share of Rs.0.60.
In 2024, OTSU’s net sales ticked up by 4.24 percent to clock in at Rs.3163.87 million. During the year, the company faced production challenges due to ageing of its machinery. This also resulted in a decline in rated capacity of I.V solutions and plastic ampoules to 28.6 million bottles and 14.1 million bottles respectively in 2024.
During the year, the company produced 18.7 million bottles of I.V solutions, down 13.02 percent year-on-year and 11.8 million bottles of plastic ampoules, down 3.28 percent year-on-year. One significant development during the year was the introduction of “Alpha berry plus” sachet in 2024 in its nutraceutical segment.
The company also replaced its previous major distributor by appointing “M/s. UDL Distribution (Pvt.) Limited” for Karachi and various other distributors for southern areas. This greatly helped the company with the payment terms, cash flow and liquidity.
Cost of sales mounted by 8.18 percent in 2024 due to unprecedented level of inflation, Pak Rupee depreciation as well as high electricity and gas prices. GP margin fell to its lowest level of 18.24 percent in 2024. Distribution expense ticked up by a paltry 2.98 percent in 2024 due to lower advertising & promotion charges.
Administrative expense escalated by 16.39 percent in 2024 due to higher payroll expense. This was despite the fact that the company streamlined its workforce from 362 employees in 2023 to 345 employees in 2024.
Other income grew by 83.89 percent while other expense shrank by 44.29 percent in 2024 due to hefty exchange gain recorded during the year on account of mark-to-market valuation of JPY currency loan obtained M/s. Otsuka Pharmaceutical Factory, Inc., Japan (OPF).
OTSU’s operating profit improved by 239.49 percent in 2024 with OP margin climbing up to 3.85 percent. Finance cost mounted by 60 percent in 2024 due to monetary tightening as well as new loan of JPY 300 million obtained from OPF.
While the company’s equity shrank due to higher accumulated losses, robust bank balances resulted in a reduced gearing ratio of 49.58 percent in 2024. OTSU’s net loss tapered off by 33.91 percent to clock in at Rs.4.76 million in 2024. This translated into loss per share of Rs.0.39 in 2024.
2025 appears to be a turning point for the company as its net sales posted a staggering year-on-year growth of 19.46 percent in 2025 to clock in at Rs.3779.52 million. This was due to better sales volume of clinic nutrition segment and strategic price adjustment implemented during the year.
OTSU also launched new products - “Falitop” and “Gen-DM MF - which received great market traction and greatly reinforced its clinical nutrition segment. Cost of sales grew by 12.73 percent in 2025 which was way beneath the topline growth. This was due to effective cost management and operational efficiency. This resulted in 49.64 percent stronger gross profit with GP margin rising up to 22.84 percent in 2025.
Distribution expense escalated by 37.36 percent in 2025 due to development of sales force, higher salaries of sales personnel and increased promotional activities undertaken during the year.
The company also incurred higher freight charges as it changed its logistics model to door-to-door distributor warehouse based model which not only reduced the rate of product deterioration but also shortened the lead time and cash cycle. 31.78 percent spike in administrative expense in 2025 was due to higher payroll expense and legal charges incurred during the year.
Workforce was also enhanced from 345 employees in 2024 to 408 employees in 2025. 4.83 percent plunge in other income and 40.95 percent hike in other expense during the year under review was the result of mark-to-market valuation of foreign currency denominated loans. OTSU recorded 33.77 percent improvement in its operating profit in 2025 with OP margin climbing up to 4.31 percent.
Finance cost tumbled by 94.26 percent in 2025 due to monetary easing. Conversely, its outstanding borrowing from the parent company (Otsuka Pharmaceutical Inc. Japan) increased. Gearing ratio ticked up to 50.32 percent in 2025. OTSU posted net profit of Rs.27.68 million in 2025 with EPS of Rs.2.29 and NP margin of 0.73 percent.
Recent Performance (9MFY26)
During the nine-month period of the ongoing fiscal year, OTSU recorded 13.95 percent enhancement in its net sales which clocked in at Rs.3040.72 million. As of March 30, 2026, 96.09 percent of the company’s sales are from local market and 3.91 percent from the Afghanistan market.
In terms of product mix, sale of IV solutions account for 88.65 percent of the revenue proceeds of the company.
In 3QFY26, sale to Afghanistan were halted due to border tensions which resulted in thinner sales during the quarter. However, overall the company posted topline growth in 9MFY26. Upward price adjustment and cost control measures enabled the company to record 81.45 percent growth in its gross profit in 9MFY26.
GP margin clocked in at 34.24 percent in 9MFY26 versus 21.50 percent in 9MFY25. Elevated advertising budget due to the launch of two new nutritional products – Neo-Mune and Once-Dialyze, induction of sales force and adoption of door-to-door distributor warehouse model resulted in 40.21 percent escalation in distribution expense in 9MFY26. Administrative expense surged by 10.13 percent in 9MFY26 likely due to higher payroll expense. Net exchange gain of Rs.122 million on the foreign currency loan due to the appreciation of Pak Rupee resulted in 146 percent higher other income and 39 percent lower other expense in 9MFY26. Operating profit grew by 313.16 percent in 9MFY26 with OP margin clocking in at 19.66 percent versus OP margin of 5.42 percent recorded in 9MFY25. Finance cost surged by 90.53 percent in 9MFY26 due to maturity of lease liability. Net profit progressed by 539.39 percent to clock in at Rs.380.07 million in 9MFY26. This translated into EPS of Rs.31.41 and NP margin of 12.50 percent in 9MFY26 as against EPS of Rs.4.91 and NP margin of 2.23 percent in 9MFY25.
Future Outlook
The company is in the process of achieving economies of scale through line extensions. Significant efforts are being made to sustain its competitive position in the market by launching new value added products particularly in the clinical nutrition and nutraceutical segments which offer greater margins. The company has also taken over its south supply from its distributor “Hospital supply corporation” and has appointed several other distributors. This has greatly improved the cash flow position of the company and reduced its borrowing requirements. Furthermore, positive exchange parity and controlled inflation will also serve as a boon for the company and boost its operating performance.
On the flipside, ongoing tension in the Middle Eastern region has led to acute fluctuations in the petroleum market. LDPE, a by-product of petroleum, is a significant raw material of OTSU and hence the company is directly exposed to any changes in the prices of POL products.