Martin Dow Marker Limited

RATING REPORT | May-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
15-May-26 A+ A1 Stable Maintain -
15-May-25 A+ A1 Stable Maintain -
31-May-24 A+ A1 Stable Maintain -
02-Jun-23 A+ A1 Stable Maintain -
03-Jun-22 A+ A1 Stable Maintain -
About the Entity

Martin Dow Marker Ltd is a subsidiary of Martin Dow Limited. Martin Dow Limited holds 75% shareholding while Marker Family holds the remaining 25%. Martin Dow Limited is owned by the Akhai Family, mainly Ali Akhai, son of late Mr. Jawed Akhai (the founding chairman of Martin Dow Group). Mr. Ali Akhai is the chairman of the Board of Directors. MDM has a three-member board including the Chairman, Mr. Javed Ghulam Muhammad, the company's CEO, and Mr. Syed Dawood, the independent Director.

Rating Rationale

Martin Dow Marker Limited (MDM or "the Company"), formerly known as Merck (Pvt.) Ltd., is a well-established and commercially prominent player in Pakistan's pharmaceutical sector. The business is led by the Akhai family, whose presence in the industry stretches back to 1960, bringing with it decades of sector expertise and strategic continuity. MDM is principally engaged in the manufacturing and marketing of pharmaceutical products, supported by a diversified portfolio of over 70 brands spanning key therapeutic areas including diabetes, cardiology, vitamins, analgesics, and antibiotics. The Company's five flagship brands, Evion, Sangobion, Concor, Neurobion, and Glucophage, each generate in excess of PKR 1 billion in annual sales, reflecting strong and enduring market acceptance. MDM operates under the Martin Dow Group, comprising four companies and housing prominent brands such as Lexotanil, Rocephin, and Glucophage, among others. Built on a foundation of strategic acquisitions and financial strength. Pakistan's pharmaceutical sector continues to exhibit strong resilience and broad-based structural expansion. Industry growth reached 15.2% on a Moving Annual Total (MAT) basis, with the market attaining a total valuation of PKR 1.2 trillion by January 2026. This growth trajectory is underpinned by a five-year MAT CAGR of 17.2%, driven by a large and growing population base, rising prevalence of chronic and infectious diseases, and progressively improving healthcare access. Sector profitability has recovered meaningfully, supported by greater pricing flexibility, easing input cost pressures, and improved operating leverage. Nevertheless, key risks persist, including high dependence on imported APIs, exposure to PKR volatility, regulatory constraints on essential medicines, and ongoing global supply chain disruptions. MDM has developed a comprehensive product portfolio across both chronic and acute therapeutic segments. The Group upholds stringent quality standards and global best practices, further reinforced by enduring alliances with multinational partners including Roche, Merck, Sanofi, and Boehringer Ingelheim. During CY25, MDM delivered topline growth of ~13%, with revenues reaching PKR 31.9 billion. Profitability improved alongside, underpinned by enhanced operational efficiencies that translated into improved gross and net profit margins. The Company maintains an adequate corporate governance framework, though meaningful opportunities exist for further strengthening, particularly in board composition and the formation of dedicated committees. The management team comprises seasoned professionals, supported by robust internal controls and well-established compliance systems. Looking ahead, MDM is focused on introducing new products aligned with evolving healthcare demands while actively working to broaden its export footprint. The financial risk profile of MDM is assessed as adequate, characterized by comfortable debt service coverages, sound cash flows, and a moderately stretched working capital cycle. The capital structure remains leveraged, with borrowings comprising a measured mix of long-term facilities deployed for capital expenditure and short-term lines utilized to support working capital requirements.

Key Rating Drivers

The ratings are dependent on the sustainability of improvements in the profitability matrix and market share while retaining sufficient cash flows and coverages. However, it is essential for the Company to maintain adequate debt metrics and remain aligned with the shared financial projections. Improvement in governance structure remains important for the ratings.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Martin Dow Marker Limited


Rating Analysis

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Profile
Legal Structure

Martin Dow Marker Limited (herein referred to as ‘MDM’ or ‘the Company’) formerly known as Merck Pvt Limited, is an unlisted public limited company. The registered office of the company is located at Plot No. 7, Jail Road, Quetta Balochistan.


Background

In 2016, Merck Pakistan became part of the Martin Dow Group. Afterward, it was renamed to Martin Dow Marker Ltd. Germany’s Merck KGaA executed a binding contract to divest its shareholding in Pakistan to Martin Dow Ltd (The Parent Company), a leading pharmaceutical. At present, MDM operates under the umbrella of Martin Dow Group - founded in 1995 by Mr. Jawed Akhai (Late), Martin Dow Group stands as one of the largest locally-owned pharmaceutical companies in Pakistan.


Operations

The Company has been established to carry on manufacturing and marketing of pharmaceutical products. It holds a portfolio of 70+ brands under its name and also markets drugs for therapeutic areas like diabetes, cardiology, vitamins, analgesics, antibiotics, etc. The company’s manufacturing facilities comprise two plants: Quetta plant & Karachi Plant. It is the only authorized licensed manufacturer of 'Merck Germany’ in Pakistan. It is also the sole manufacturer of 'pharma grade soft gel' products such as Evion and Sangobion in the country.


Ownership
Ownership Structure

Martin Dow Limited has a major stake in the company with 75% shareholding while the remaining 25% is held by members of the Marker Family. The ultimate beneficial ownership lies with Mr. Ali Akhai – son of Mr. Jawed Akhai (late).


Stability

The sponsoring members of Martin Dow Group are reputed names and well entrenched in the pharmaceutical business for decades. Martin Dow is positioned in the top 10 largest pharmaceutical groups operating in Pakistan. Martin Dow has strategic alliances to manufacture licensed products from international reputes like Merck, Sanofi, Roche, and P&G, providing international expertise and exposure to operate efficiently as a leading pharmaceutical group.


Business Acumen

Martin Dow Group has established a strong reputation through strategic acquisitions and high-end investments, a legacy that continues under the leadership of the principal sponsor, Mr. Ali Akhai, who has recently invested in Welnox. Currently, 51 products of the Group hold leading market positions within their respective molecules, reflecting its strong market presence and product strength. The Group demonstrates strong business acumen through strategic expansion, technological advancement, and international collaborations. Under the leadership of Chairman Mr. Ali Akhai and CEO Mr. Javed Ghulam Mohammad, Martin Dow has evolved into a prominent healthcare player with multiple manufacturing facilities, while maintaining a focus on high-quality branded generics.


Financial Strength

Martin Dow Group (MDG) has 4 companies: Martin Dow Limited, Martin Dow Marker Ltd, Martin Dow Specialties Pvt Ltd, and Seatle Pvt Ltd. It is well poised in the industry with a group size of PKR 50.498bln as of Dec’25. The future prospects of the company are considered strong. 


Governance
Board Structure

MDM has a three-member Board comprising Mr. Ali Akhai (Chairman), Mr. Javed Ghulam Mohammad (CEO), and Mr. Syed Dawood (Independent Director). Mr. Dawood has been associated with the Company since 2018. The Board members possess strong professional backgrounds and extensive industry experience, enabling strategic oversight and effective decision-making.


Members’ Profile

Mr. Ali Akhai is the present Chairman. He is a foreign-qualified double Master’s degree holder from Brunel University UK. Mr. Ali played his part in the leadership team that successfully acquired the majority shareholding of Merck (Pvt) Ltd in 2016. While the other two members have extensive expertise in the pharmaceutical industry.


Board Effectiveness

The Company remains compliant with applicable statutory requirements. Board meetings are convened as and when required by the Chairman and CEO to discuss strategic and operational matters. The Board benefits from experienced leadership and demonstrates effective oversight through timely decision-making and strategic direction.


Financial Transparency

The external auditors of the Company, A.F. Ferguson & Co. (a member firm of PwC International), expressed an unqualified opinion on the financial statements for the year ended CY25, reflecting adequate financial reporting and transparency standards.


Management
Organizational Structure

MDM operates through a multi-level functional organizational structure comprising specialized departments including Finance, Technical Operations, Regulatory Affairs, Human Resources, Information Technology, Legal, and Commercial Operations. The functional heads report to the Group MD/CEO, who in turn reports to the Chairman. The structure is designed to ensure operational efficiency, effective coordination, and streamlined decision-making across the Group’s diverse business functions and manufacturing operations.


Management Team

Mr. Javed Ghulam Muhammad is the Group MD/CEO and is a qualified fellow member of the Institute of Cost & Management Accountants of Pakistan. His professional journey spreads over 30 years during which he has worked in diversified functions in several key positions at leading multinational and national companies. He is accompanied by a team of qualified and experienced professionals.


Effectiveness

Although the Company does not maintain formal management committees, operational matters are managed efficiently through a well-defined organizational structure, clear reporting lines, and proper delegation of responsibilities. The experienced management team supports timely decision-making and effective oversight across business functions.


MIS

The Company has been operating on SAP S/4 HANA since 2018, incorporating various SAP modules across key functional areas. The system facilitates integrated reporting, operational monitoring, and informed decision-making. Periodic reporting is conducted on a monthly basis and reviewed by the respective departmental heads and senior management.


Control Environment

The internal audit function of the company has been outsourcced to EY Ford Rhodes, who report directly to the Chairman and conduct quarterly meetings with the Audit Committee. Further, stringent quality control mechanism is in place to ascertain the quality of products.


Business Risk
Industry Dynamics

Pakistan’s pharmaceutical industry demonstrated stable growth as of  Jan'26, with sector revenues increasing  by ~15.2% amounting to PKR ~1,182bln as per IQVIA report. The Government’s deregulation of non-essential medicines in Feb’24 supported industry growth by providing pricing flexibility to manufacturers. Consequently, drug prices increased by ~14.2% during FY25, while inflationary pressures eased in 5MFY26, resulting in comparatively moderate price growth of ~5.0%. The sector remains heavily reliant on imported Active Pharmaceutical Ingredients (APIs) and other raw materials, exposing local manufacturers to exchange rate volatility and supply chain disruptions. Pharmaceutical imports stood at USD ~459mln during FY25, reflecting a ~10.0% YoY increase. On the export front, the industry recorded notable growth, with exports rising by ~22.8% YoY to USD ~260mln, supported by improved pricing policies and enhanced export competitiveness. Profitability indicators of the sector improved during FY25, with gross margins expanding to ~34% (FY24: ~32%) and interest coverage strengthening to ~23x. Moreover, sector borrowings declined significantly by ~65.6% YoY to PKR ~108.7bln by End-Oct’25, reflecting improved cash flow generation and reduced reliance on short-term financing. Despite positive fundamentals, the industry remains exposed to regulatory changes, currency fluctuations, and imported input cost pressures.


Relative Position

MDM is a leader in many therapeutic areas. As per IQVIA, Martin Dow Group ranked 5th by market value in Pakistan’s pharmaceutical market with a 4.0% share and 15.5% growth — outpacing the industry average of 15.2%. MDML has built a comprehensive product portfolio in both chronic and acute therapeutic segments. Martin Dow Marker has the sole authorized marketing rights of Merck Germany in Pakistan. It is the only company to have a pharma-grade Soft gel capsule manufacturing facility in the country.


Revenues

During CY25, the Company recorded net sales of PKR 31,905 million, reflecting a 12.9% YoY increase (CY24: PKR 28,261 million). The increase was primarily driven by growth in the local segment, supported by volumetric expansion and pricing adjustments. Export sales rose to PKR 1,669 million (CY24: PKR 465 million), increasing their contribution to the topline (~5.2% vs. ~1.6% in CY24), indicating improved traction in international markets.


Margins

Profitability improved during CY25, supported by better cost management, relatively stable input costs, and operational efficiencies. Gross margins strengthened, while operating profitability benefited from higher sales despite an increase in selling and marketing expenses. Net profitability also improved on account of lower finance costs and enhanced operating performance.


Sustainability

Martin Dow Marker continues to benefit from its diverse product portfolio and established market presence. The Company launched 14 new products in 2025, strengthening its position in cardiovascular, antidiabetic, multivitamin, and antibiotic segments. The focus on chronic therapies continues to support sustainable demand,while product diversification provides resilience against category-specific slowdowns.


Financial Risk
Working capital

The Company’s working capital cycle lengthened during CY25, with net working capital days increasing to 66 days (CY24: 57 days; CY23: 49 days). Inventory levels remained elevated, while receivable management showed slight improvement during the year. Meanwhile, reduced supplier financing support contributed to the increase in the overall working capital cycle. Liquidity remained supported by internal cash generation.


Coverages

Financial coverages improved during CY25, supported by higher earnings and lower finance costs. EBITDA to finance cost increased to 13.7x (CY24: 3.0x; CY23: 2.0x), while FCFO to finance cost rose to 8.4x (CY24: 2.5%). Free cash flows from operations stood at PKR 4,056 million (CY24: PKR 3,783 million), indicating improved cash generation. Enhanced profitability and stronger cash generation have contributed to the Company’s improved debt servicing capacity, despite the prevailing high borrowing costs


Capitalization

The Company’s capital structure improved during CY25, with total borrowings declining to PKR 4,036 million (CY24: PKR 6,184 million), primarily due to lower reliance on short-term borrowings. As a result, the leverage ratio reduced to 28.5% (CY24: 45.5%; CY23: 49.9%). The equity base increased due to profit retention, supporting a more balanced capital structure.
 
 

May-26

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Martin Dow Marker Limited


Financial Summary

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(PKR mln)


 Dec-25
12M		 Dec-24
12M		 Dec-23
12M
A. BALANCE SHEET
1. Non-Current Assets 7,506 6,818 6,417
2. Investments 128 128 128
3. Related Party Exposure 3,435 3,307 3,344
4. Current Assets 11,350 9,221 9,276
5. Total Assets 22,418 19,474 19,165
6. Current Liabilities 7,488 4,946 5,808
7. Borrowings 4,036 6,184 6,274
8. Related Party Exposure 0 270 270
9. Non-Current Liabilities 773 678 509
10. Net Assets 10,121 7,395 6,303
11. Shareholders' Equity 10,121 7,395 6,303
B. INCOME STATEMENT
1. Sales 31,905 28,261 23,934
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 4,175 3,783 2,324
b. Net Cash from Operating Activities before Working Capital Changes 3,640 2,120 1,089
c. Changes in Working Capital (152) (621) 196
1. Net Cash provided by Operating Activities 3,488 1,499 1,285
2. Net Cash (Used in) or Available From Investing Activities (620) (143) (898)
3. Net Cash (Used in) or Available From Financing Activities (2,706) (1,037) (76)
4. Net Cash generated or (Used) during the period 163 319 311
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 12.9% 18.1% 25.7%
b. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 12.6% 11.2% 10.5%
2. Working Capital Management
a. Gross Working Capital (Average Days) 96 98 102
b. Net Working Capital (Average Days) 66 57 49
c. Current Ratio (Current Assets / Current Liabilities) 1.5 1.9 1.6
3. Coverages
a. EBITDA / Finance Cost 13.7 3.0 2.0
b. FCFO / Finance Cost+CMLTB+Excess STB 4.2 2.1 0.7
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.5 0.8 2.7
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 28.5% 45.5% 49.9%

May-26

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Martin Dow Marker Limited


Rating Scale

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May-26

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Martin Dow Marker Limited


regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
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May-26

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