Ferozsons Laboratories Limited was incorporated in Pakistan as a public limited company in 1954. It was converted into a public limited company in 1960. The principal activity of the company is the manufacturing, import and sale of pharmaceutical products and medical devices.
Pattern of Shareholding
As of June 30, 2025, FEROZ has a total of 43.469 million shares outstanding which are held by 4739 shareholders. Associated companies, undertakings and related parties have the majority stake of 37.36 percent in FEROZ followed by local general public holding 24.85 percent shares. Around 10.41 percent of the company’s shares are held by its Directors, CEO, their spouse and minor children and 10 percent by Modarabas & Mutual Funds. Banks, DFIs and NBFIs account for 5.55 percent shares of FEROZ while NIT & ICP hold 4.02 percent shares. Other local companies hold 3.38 percent shares while insurance companies hold 3.11 percent shares. The remaining 1.33 percent shares of FEROZ are held by foreign general public.
Historical Performance (2021-25)
FEROZ’s topline rode an upward trajectory over the period under consideration. Its bottomline strengthened in 2021 followed by a dip in 2022 and 2023. In 2024 and 2025, FEROZ’s net profit registered a staggering growth. The company’s margins registered sound growth until 2020. In 2021, gross margin slightly fell, however, operating and net margins continued to enlarge. This was followed by gross margin attaining its optimum level in 2022 while operating and net margins slid. All the margins posted drastic decline in 2023 followed by a rebound in 2024 and 2025. The detailed performance review of the period under consideration is given below.
FEROZ’s topline mounted by 30.21 percent in 2021 to clock in at Rs.7033.622 million. In-market generic sales and institutional sales improved by 18 percent and 49 percent respectively in 2021. Export sales also rose by 49 percent during the year. Despite higher raw material and conversion charges, variation in the sales mix enabled the company to attain a stable GP margin of 41 percent in 2021. In absolute terms, gross profit increased by 29.71 percent in 2021. As travelling restrictions were eased during the year, the company could plan its field promotional activities. This resulted in 18.21 percent higher distribution expense in 2021. FEROZ also expanded its workforce from 1059 employees in 2020 to 1127 employees in 2021 which resulted in higher payroll expense. Consequently, administrative expense surged by 16 percent in 2021. Net effect of no exchange loss and higher provisioning for WWF, WPPF and CRF resulted in 0.93 percent downtick in other expense in 2021. 47.48 percent higher other income was the result of exchange gain, commission income as well as higher gain recorded on sale of property, plant & equipment in 2021. Operating profit multiplied by 70.61 percent in 2021 with OP margin picking up to 14.25 percent – the highest during the period under consideration. This was against the OP margin of 10.88 percent recorded in 2020. Finance cost tumbled by 19.88 percent in 2021 due to the onset of monetary easing cycle since 4QFY20. Net profit progressed by 83.30 percent to clock in at Rs.725.235 million in 2021 with EPS of Rs.20.02 and NP margin attaining its highest level of 10.31 percent. This was against the EPS of Rs.10.92 and NP margin of 7.32 percent recorded in 2020.
In 2022, FEROZ’s net sales improved by 11 percent to clock in at Rs.7806.414 million. Unlike last year, institutional sales registered a decline of 1 percent in 2022, while in-market generic sales continued to pick up posting 20 percent year-on-year rise. The company’s stock was valued at historical average exchange rate with no integration of Pak Rupee depreciation during the year. This coupled with change in sales mix resulted in 21.85 percent improved gross profit in 2022 with GP margin attaining its highest level of 45 percent. 29.26 percent higher distribution expense incurred in 2022 came on the back of increased promotion and advertising activities to increase market penetration. Workforce expansion undertaken during the year took the headcount to 1366 employees in 2022. This resulted in higher salaries expense which together with elevated travelling & conveyance charges drove administrative expense up by 20.65 percent in 2022. Other expense registered a whopping 199.32 percent year-on-year hike in 2022 due to hefty exchange loss incurred during the year. Unlike previous years, other income couldn’t offset other expense in 2022 despite posting 33.71 percent year-on-year rise. Higher other income was the result of robust dividend income, reversal of loss allowance and higher share in profit of Farmacia – 98 percent owned partnership firm of FEROZ. Operating profit thinned down by 3 percent in 2022 with OP margin falling down to 12.45 percent. Finance cost escalated by 72 percent in 2022 due to higher discount rate and increased short-term borrowings to meet working capital requirements. FEROZ’s net profit descended by 29.11 percent in 2022 to clock in at Rs.514.149 million with EPS of Rs.11.83 and NP margin of 6.59 percent.
In 2023, FEROZ recorded 26.73 percent enhancement in its net sales which stood at Rs. 9893.39 million. This was backed by 14 percent growth in in-market generic sales, 43 percent growth in institutional sales as well as 98 percent growth in export sales over the previous year. Change in sales mix in favor of institutional sales coupled with increase in raw material cost, Pak Rupee depreciation and unprecedented level of inflation translation into a thinner GP margin of 38.63 percent in 2023. Gross profit inched up by 8.66 percent in absolute terms in 2023. Inflationary impact, higher fuel prices and increased travelling and salaries expense resulted in 24.12 percent spike in distribution expense in 2023. Administrative expense also mounted by 24.36 percent in 2023 due to heightened payroll expense, travelling expense, fuel & power and canteen expenses incurred during the year. Number of employees was increased to 1388 in 2023 from 1366 in 2022. Other expense magnified by 100.14 percent in 2023 due to sharp increase in exchange loss on account of Pak Rupee depreciation as well as hefty loss allowance against trade debt and earnest money booked during the year. Other income inched up by 10.26 percent in 2023 due to higher dividend income, commission income and share in profit of Farmacia recorded during the year. FEROZ’s operating profit dwindled by 55.38 percent in 2023 with OP margin falling to its lowest level of 4.38 percent. Finance cost surged by 323.36 percent in 2023 due to elevated discount rate and increased short-term and long-term borrowings obtained during the year. Net profit declined by 63.23 percent to clock in at Rs.189.043 million in 2023 with EPS of Rs.4.35 and the lowest NP margin of 1.91 percent.
FEROZ’s net sales grew by 28.49 percent to clock in at Rs.12,711.714 million in 2024. This was due to 31 percent increase in in-market generic sales and 27 percent increase in institutional sales during the year. During the year, the topline growth was solely supported by an increase in sales volume while prices stayed intact at the last year level. Cost of sales surged by 28 percent due to inflationary pressure as well as Pak Rupee depreciation. Gross profit improved by 29.30 percent in 2024 with GP margin slightly ticking up to 38.88 percent. Distribution expense surged by 24.58 percent in 2024 due to higher sales volume coupled with inflationary effect which pushed up the salaries of sales force, travelling & conveyance expense as well as sales promotion expense. Administrative expense also escalated by 27.41 percent in 2024 due to higher payroll expense. Number of employees grew to 1485 in 2024. Other expense fell by 65.82 percent in 2024 due to no exchange loss incurred on account of relatively stable value of local currency since 2QFY24. Other income grew by 1.32 percent in 2024. This was because the impact of hefty exchange gain, gain on sale of fixed assets as well as unrealized gain on re-measurement of short-term investment to fair value was offset by thinner dividend income and share in profit of Farmacia. Operating profit strengthened by 162.30 percent in 2024 with OP margin climbing up to 8.95 percent. Finance cost multiplied by 233 percent in 2024 due to high discount rate coupled with higher long-term loan ans increased utilization of working capital lines. FEROZ’s gearing ratio surged from 12.72 percent in 2023 to 23.52 percent in 2024. Net profit improved by 111.62 percent to clock in at Rs.400.054 million in 2024. This culminated into EPS of Rs.9.20 and NP margin of 3.15 percent in 2024.
In 2025, FEROZ’s net sales ticked up by 9 percent to clock in at Rs.13,857.967 million. Both local and export sales increased during the year. While in-market generic sales posted 24 percent rise during the year, the institutional sales of generics and medical devices posted 13 percent decline in 2025. The change in sales mix coupled with the increase in prices resulted in 15.72 percent stronger gross profit in 2025 with GP margin climbing up to 41.27 percent. Distribution expense and administrative expense escalated by 14.11 percent and 3.59 percent respectively during the year on account of inflationary pressure. Payroll expense escalated during the year as the company enhanced its workforce from 1485 employees in 2024 to 1556 employees in 2025. Other expense surged by 14.19 percent in 2025 due to exchange loss and greater provisioning done for WWF, WPPF and CRF. Conversely, other income dwindled by 26.56 percent in 2025 as no exchange gain was recognized during the year. Moreover, thinner realized gain on the sale of fixed assets and unrealized gain on the revaluation of short-term investments also contributed in squeezing other income in 2025. FEROZ recorded 21 percent higher operating profit in 2025 with OP margin jumping up to 9.93 percent. Finance cost slid by 14.13 percent in 2025 due to monetary easing and a plunge in short-term borrowings. The change in tax regime for export sales by the federal government resulted in effective tax rate of 43 percent in 2025 versus 34 percent in 2024. Net profit improved by 32 percent to clock in at Rs.528.243 million in 2025. This translated into EPS of Rs.12.15 and NP margin of 3.81 percent in 2025.
Recent Performance (9MFY26)
During the nine-month period of the ongoing fiscal year, FEROZ recorded 10.52 percent uptick in its net sales which clocked in at Rs.11,948.72 million. In line with the pattern portrayed last year, in-market generic sales posted growth while institutional sale of generics and medical devices dwindled during the period. In the 3QFY26, net sales of the company deteriorated by 3 percent due to the closure of Pak-Afghan border. Gross profit strengthened by 16.32 percent in 9MFY26 due to stronger sales volume and favorable sales mix. GP margin clocked in at 41.76 percent in 9MFY26 versus 39.68 percent registered in 9MFY25. Enhancement of sales force as well as increased field marketing activities pushed up distribution expense by 18.28 percent in 9MFY26. Administrative expense also grew by 9 percent in 9MFY26 due to inflationary pressure. Higher provisioning done for WWF, WPPF and CRF appears to be the cause of 32.92 percent spike in other expense in 9MFY26. Conversely, other income fell by 34 percent in 9MFY26 due to lesser unrealized gain on the revaluation of short-term investments and thinner mark-up income due to monetary easing. FEROZ recorded a marginal 7.46 percent uptick in its operating profit in 9MFY26 with OP margin clocking in at 8.95 percent versus 9.20 percent recorded in 9MFY25. Monetary easing helped the company squeeze its finance cost by 37.36 percent in 9MFY26 despite greater borrowings. Net profit clocked in at Rs.503.87 million in 9MFY26, up 29 percent year-on-year. This translated into EPS of Rs.11.59 and NP margin of 4.22 percent in 9MFY26 versus EPS of Rs.8.98 and NP margin of 3.61 percent registered in 9MFY25.
Future Outlook
Institutional sales were drastically squeezing the company’s margins amid high raw material and conversion cost. Besides, institutional sales were also driving up the outstanding receivables of the company, resulting in increased booking of loss allowance. This was creating liquidity constraints for the company. To offset the negative impact of institutional sales on its financial performance, FEROZ is venturing into new geographical markets and introducing market relevant products that can add diversity to its revenue lines and shield its margins from contraction. Inclination towards in-market generic sales improved the company’s margins of-late.
In the 3QFY26, border tensions with Afghanistan affected export sales, the effect of which may linger on in the coming quarter. Moreover, geopolitical tensions in the Middle East inflated petroleum prices and created supply chain disruptions which put pressure on input prices, lead times and operating expense.