PACRA Maintains the Entity Ratings of AGP Limited

AGP Limited (hereinafter referred to as "AGP" or "the Company") holds a prominent position in Pakistan’s pharmaceutical sector. The ratings reflect AGP’s dual role as both an operating and a holding company within the OBS Group. The Company maintains a strong presence across diverse therapeutic segments, with growth supported by organic expansion and strategic high-value acquisitions, marketed through AGP and its subsidiaries OBS AGP and OBS Pak, including Azomax, Rigix, Osnate D, Norvasc, and Ceclore, among others. The Company’s diversified therapeutic coverage includes gastroenterology, respiratory, ophthalmic, pain management, gynecology, pediatrics, cardiometabolic, orthopedic, neuropsychiatry, and nutraceutical categories. Recently, AGP expanded its offerings with innovative molecules such as Bilastine, a non-sedating respiratory and allergy therapy, which reflects its commitment to innovation and market leadership. AGP operates three advanced GMP-compliant manufacturing facilities with sufficient production capacity to meet domestic demand. The Company distributes its products locally through Muller and Phipps Pakistan (Private) Limited (M&P), the largest pharmaceutical distributor in the country. Around ~79% of AGP’s sales are routed through M&P, which presents a concentration risk; however, the distributor’s shareholding in AGP provides partial mitigation of risk. The Company’s international presence remains limited, with exports mainly to Afghanistan, though a structured plan is being pursued to expand its global footprint. According to the IQVIA report of December 2024, AGP ranks # 14th in Pakistan’s pharmaceutical market based on consolidated revenue, placing it among the leading industry players. The Company maintains a robust corporate governance framework supported by well-defined policies and an experienced management team with diverse sectoral expertise. The domestic pharmaceutical industry continues to demonstrate resilience, driven by increasing healthcare demand and ongoing regulatory reforms. Deregulation of non-essential medicine pricing has allowed manufacturers greater flexibility to align prices with market dynamics, benefiting companies with broader non-essential portfolios. AGP’s topline grew by ~34% in CY24 and maintained its growth momentum in 1HCY25, supported by expansion in the domestic market and higher exports. Profitability improved at all levels during the same period due to cost optimization and operational efficiency. AGP’s financial risk profile is characterized by healthy coverages, sufficient cash flows, and a comfortable working capital cycle. The capital structure remains leveraged, comprising a balanced mix of long-term and short-term borrowings to support business modernization, brand acquisitions, and working capital needs.
The ratings remain contingent on the sustainability of topline growth and profitability. Adequate cash flows and access to alternative funding sources for debt servicing are critical, while adherence to internally defined leverage thresholds is a key requirement.

About the Entity
AGP Limited (AGP) is a Listed Public Limited Company, operating in the pharmaceutical sector of Pakistan since 1989. AGP is primarily owned by OBS Group (OBS) through Aitken Stuart Pakistan (Pvt.) Ltd., which holds a ~55.80% stake. Other significant shareholders include Muller & Phipps Pakistan (Pvt.) Ltd (M&P). (~13.54%), Baltoro Growth Fund (BGF) (~4.03%), Aspin Pharma Limited (~4.79%), High-Q Pharmaceuticals (Pvt.) Ltd. (~3.84%), and the National Bank of Pakistan (~2.81%). The remaining shares are held by the general public. The seven-members of Board of Directors comprises two independent directors, three representatives of the OBS Group, and one each of M&P and BGF. Mr. Tariq Moinuddin Khan is the Chairman whereas Mr. Muhammad Kamran Nasir is the CEO of the Company. Both have over 3 decades of diverse professional experience.