Pharmatec Pakistan (herein referred to as “Pharmatec” or “the Company’ was incorporated on 5th August 1993 as a Private Limited Company under the Companies Ordinance 1984 (now the Companies Act 2017).

Pharmatec Pakistan (Pvt.) Limited began its operations in 1973 as Sterling Products Pakistan (Pvt.) Limited, a subsidiary of Sterling Winthrop Inc., USA, the original owner of the globally recognized Panadol brand. In 1993, following Sterling Winthrop’s decision to divest its operations in Pakistan, the Company underwent a management buyout and was reconstituted as Pharmatec Pakistan (Pvt.) Limited. Since then, Pharmatec has evolved into a prominent pharmaceutical manufacturer in the country, producing a broad range of generic medicines and serving as a key toll manufacturing partner for leading global brands, including Haleon (formerly GSK). The Company’s modern GMP- and GLP-compliant facilities support the production of solid, liquid, and injectable dosage forms, underscoring its continued emphasis on quality, innovation, and expanding its footprint in both domestic and international markets.

Pharmatec’s registered office and manufacturing facility are located at D-86/A, Manghopir Road, S.I.T.E., Karachi. The Company is primarily engaged in contract manufacturing for several leading multinationals, including Haleon Pakistan, GSK, and Abbott Laboratories Pakistan, while also manufacturing and marketing its own diverse product range. Over the years, Pharmatec has significantly upgraded its production infrastructure, including the addition of a dedicated injectables facility in 2003. The Company operates modern GMP-compliant plants equipped to manufacture tablets, liquids, injectables, creams, ointments, and gels. Pharmatec has been providing toll manufacturing services to Abbott Pakistan since finalizing a marketing and licensing arrangement in 2016. Notably, the Company is also the exclusive manufacturer of the Panadol portfolio for GSK in Pakistan.

Pharmatec Pakistan (Pvt.) Ltd. is a privately held entity, predominantly owned by its founder, Mr. Pervez Hayat Noon, who retains approximately 98% shareholding. The remaining stake is held by Pharmaceutical International Ltd.

The ownership structure is expected to remain stable in the foreseeable future, as indicated by management. The sponsor has formally designated his son, Mr. Ismail Hayat Noon, as successor. Mr. Ismail has been actively involved in the business since 2016 and currently oversees various operational functions. The presence of a clearly defined succession plan reinforces stability within the Company’s ownership and supports long-term continuity.

Mr. Pervez Hayat Noon brings over four decades of pharmaceutical experience, beginning with Sterling Products International in 1983 and serving as Managing Director of Sterling Products Pakistan from 1987. He led the 1993 management buyout to establish Pharmatec Pakistan (Pvt.) Ltd. Under his leadership, the company has achieved sustained growth, expanded toll manufacturing partnerships, diversified its branded portfolio, and invested in GMP-compliant facilities. His broader entrepreneurial experience, including ownership of Hosanna Textile and Ismara Healthcare, demonstrates his versatile business capability.

The sponsors of the family come from the reputable Noon family. Besides Pharmatec, the sponsor is also the soleproprietor of Hosanna Textile, a dyeing and finishing textile plant, and Ismara International, a trading firm that hasinternational collaborations in the field of cosmeceuticals, nutraceuticals, and dietary supplements. The family has also substantial agricultural land holdings in Punjab. The sponsor has adequate capacity to provide financial support to the company.

Pharmatec Pakistan’s Board of Directors comprises only Mr. Pervez Hayat Noon, Chairman and majority owner (~98%) with over four decades of pharmaceutical experience, and Dr. Shahida Qaisar, Group CEO, a medical doctor with a Master’s in Pharmacology from London who has led the company since 1998. This compact board combines strategic oversight and deep technical expertise, reflecting a closely held, family-driven governance structure.

Mr. Pervez Hayat Noon, Chairman, a Babson College graduate with over four decades of experience in the pharmaceutical industry, and Dr. Shahida Qaisar, Group CEO, a medical graduate from Army Medical College, Rawalpindi, with a Master’s in Pharmacology from the University of London, who has been with the company since 1998. Both bring extensive expertise in pharmaceuticals, generics, and medical devices, combining strategic leadership, industry insight, and technical knowledge to drive the company’s growth and operations.

The board’s effectiveness is limited by its small size and lack of independent oversight or formal committees. Appointing non-executive or independent directors and establishing board committees with clearly defined terms of reference (TORs) could significantly strengthen governance and decision-making.

The external auditors of the company, Grant Thornton Anjum Rahman Chartered Accountants. are listed in category A in the SBP’s panel of auditors. They have issued an unqualified opinion on the financial statements of the company for the year ending June 2025.

Pharmatec Pakistan has a multilayered management structure, overseen by the Board of Directors and Group CEO, Dr. Shahida Qaisar, with the Chairman, Mr. Pervez Hayat Noon, providing strategic oversight. The management is organized into functional departments including Sales, Marketing, Finance, IT, HR, Quality Control, Supply Chain, and Internal Audit, with all department heads reporting to the Managing Director. The company employs approximately 600 staff in manufacturing, a field force of over 300 medical representatives, and specialized teams in pharmacovigilance, regulatory affairs, and commercial operations, ensuring efficient operational, technical, and regulatory management across its business.

Pharmatec’s senior management team comprises seasoned professionals with extensive experience across the pharmaceutical and healthcare sectors. The governance framework is led by Mr. Pervez Hayat Noon (Chairman), bringing over four decades of diversified industry exposure, and Dr. Shahida Qaisar (Group CEO), an M.Sc. in Pharmacology with more than forty years of leadership within the Group. Operational depth is strengthened by Mr. Muhammad Arsalan Batla (COO), an FCMA and MBA with 24 years of experience in finance and operations. Recent appointments further enhance the leadership structure: Dr. Atif Khan (CCO), an M.B.B.S. with 19 years of commercial and strategic experience across leading multinational and local pharmaceutical companies, and Mr. Muhammad Zubair (CTO), a pharmacist with over 22 years of technical and operational expertise overseeing production, engineering, and R&D. Collectively, the team reflects a strong blend of strategic, technical, and functional capabilities, providing adequate stability and depth from a rating perspective.

The Company has established a well-structured management framework supported by clearly defined and documented SOPs across all functional areas. Roles, responsibilities, and reporting lines for each department are articulated through formal policies, ensuring process clarity and operational discipline. A structured performance evaluation and monitoring mechanism is in place, facilitating regular oversight of departmental outputs and alignment with organizational objectives. These measures collectively enhance the effectiveness of the management structure and support consistent execution of strategic and operational plans.

Pharmatec is using Microsft Dynamics AX 2012 as its ERP software since 2014. All the business functionsincluding Finance, supply chain, production, quality management and sales are integrated into the software. Thecompany also uses SmartHCM, a cloud-based Human capital management software to automate and streamlineits HR function.

The company has a dedicated quality management department in place to ensure that the quality of the productsare up to the mark. The company has also obtained various certifications including ISO 9001-2015, ISO 13485-2016, ISO 14001-2015, and is also compliant with ECOVADIS. Moreover, the company has an internal auditdepartment that ensures adherence to the SOPs.

According to international monitoring firm IQVIA, Pakistan’s pharmaceutical sector recorded a 21.79% growth in calendar year 2024 compared to the previous year, reaching a market value of Rs. 962.5 billion. This growth has largely been driven by a deregulatory policy introduced earlier in the year, which allowed pharmaceutical companies to adjust prices for non-essential medicines in response to rising production costs. The revenue surge was primarily the result of price adjustments, rather than a significant increase in unit sales. The industry remains heavily dependent on imported active pharmaceutical ingredients (APIs), making it vulnerable to supply chain disruptions and foreign exchange volatility, particularly due to the depreciation of the Pakistani Rupee (PKR). This has constrained the industry's ability to pass on costs, especially in the essential medicines segment, where pricing remains regulated. Over the past year, the sector sold 3.7 billion units, reflecting a modest volume growth of 2.27%, while revenue growth was largely price-driven.

The Company maintains strong and long-standing relationships with leading pharmaceutical players in the market, supporting its positioning within the contract manufacturing and formulation space. In addition to third-party manufacturing, the Company has developed its own product range, which provides an avenue for brand-led growth. Despite these strengths, the Company’s overall market share remains below 1%, reflecting its relatively modest scale within the broader pharmaceutical industry. Sustained efforts toward product diversification, capacity enhancement, and deeper market penetration will be essential to improving its competitive positioning.

The company’s top line continued its growth trajectory during FY25, driven by the expansion of its product portfolio and consistent demand in both local and export markets. Revenues increased by 12.6% YoY, reaching PKR 5,458 million in FY25 (FY24: PKR 4,846 million; FY23: PKR 4,023 million). Of the total revenue, approximately 50% was derived from toll manufacturing, 28% from domestic sales, and the remaining 22% from exports. The growth reflects the company’s ability to maintain its market presence despite macroeconomic pressures.

The company sustained healthy margins during FY25, with the gross profit margin recorded at 45.1% (FY24: 48.6%), reflecting a moderate decline due to higher input and energy costs. The net profit margin improved slightly to 5.0% (FY24: 4.8%), supported by better operational efficiency and cost rationalization. The operating profit margin stood at 10.4% (FY24: 9.7%), indicating a steady improvement in core profitability despite inflationary conditions.

The company is expanding and installing new manufacturing facilities that will enhance its production capacity inthe coming years. The company is eyeing to launch multiple new products in the coming years. Moreover, Pharmatec’s association with leading pharmaceutical players provides a steady revenue stream to the company.

The company’s net working capital cycle stood at 76 days in FY25 (FY24: 80 days), showing improvement primarily due to better inventory and receivable management. Gross working capital days improved to 91 days (FY24: 98 days), while trade receivables days remained stable at 58 days (FY24: 60 days). The current ratio improved to 3.7x (FY24: 3.0x), reflecting strong liquidity management. The short-term leverage ratio increased slightly to 58.9% (FY24: 47.5%), indicating higher utilization of short-term financing to support operations.

Operating cash flow generation improved notably, with FCFO rising to PKR 711 million in FY25 (FY24: PKR 423 million). Consequently, the FCFO to finance cost ratio improved to 7.6x (FY24: 5.1x), and the EBITDA to finance cost ratio strengthened to 8.3x (FY24: 7.6x), reflecting robust debt-servicing capacity. The core coverage ratio (FCFO to Finance Cost + CMLTB + Excess STB) also improved to 4.4x (FY24: 3.3x), supported by consistent profitability and efficient cash management.

The company maintained a moderately leveraged capital structure, with a leverage ratio of 23.9% in FY25 (FY24: 23.0%; FY23: 11.4%), showing stability in the capital mix. Total borrowings stood at PKR 624 million as of June 2025 (FY24: PKR 576 million), primarily to support working capital and capacity expansion. Short-term debt constituted 38.1% of total borrowings (FY24: 63.9%), indicating a shift towards longer-term funding. The Debt-to-Equity ratio remained healthy, reflecting the company’s prudent financial management and sufficient equity cushion to absorb business shocks.