Ferozsons Laboratories Limited (hereafter as “Ferozsons” or “the Company”) was incorporated as a private limited company on 28 January 1954 and commenced its commercial operations in 1956. The Company was converted into a public limited company on 08 September 1960 and subsequently got listed on the Pakistan Stock Exchange (PSX) in 1960. The registered office is situated at 197-A, The Mall, Rawalpindi, and the manufacturing facility is located at Amangarh, Nowshera, Khyber Pakhtun Khwa.

The Ferozsons business group traces its origins to 1894, when Maulvi Ferozuddin Khan founded the Ferozsons publishing house. From its inception, the group was guided by a corporate vision committed to making a meaningful contribution to education and healthcare, particularly for the underprivileged communities of the subcontinent. In 1956, Ferozsons Laboratories Limited was established as one of Pakistan’s pioneering pharmaceutical manufacturing companies.

Ferozsons Laboratories Limited is primarily engaged in the import, manufacturing, and sale of pharmaceutical products and medical devices. The Company manages a diverse portfolio, strengthened by strategic international partnerships. Its product range includes branded generics and in-licensed treatments, with a primary focus on cardiology, gastroenterology, hepatology, dermatology, and anti-infective therapies. The Company is also expanding into other therapeutic areas with growing clinical demand, such as diabetes, metabolic health, pediatrics, and women’s health. Ferozsons operates a fully compliant current Good Manufacturing Practices (cGMP) production facility in Nowshera, which is ISO 9001 certified and equipped with advanced manufacturing and quality testing equipment. Its production capabilities encompass a wide range of dosage forms, including tablets, capsules, syrups, suspensions, creams, and ointments.

The sponsoring family owns ~47.78% of the shareholding of the Company. NIT & ICP (~4.31%), Banks & Non-banking financial institutions (~0.54%), Insurance Companies (~10.39%), Mudarabas & Mutual Funds (~7.89%). The remaining shares (~29.1%) are held by the General Public and other Companies.

The ownership structure of the Company is deemed stable, as it has remained under the control of the current sponsors for several decades, with no changes expected in the foreseeable future.

The sponsoring family has been actively involved in the pharmaceutical sector for over six decades, consistently demonstrating strong business acumen. Their core strengths include forging international partnerships and developing strategic alliances with leading organizations in the global healthcare industry. This enduring commitment to excellence has allowed the group to effectively navigate the complexities of the pharmaceutical landscape, fostering sustained growth and continuous innovation.

Ferozsons Laboratories Limited is one of Pakistan’s long-established pharmaceutical companies, recognized for its commitment to excellence, innovation, and responsible growth. A multiple-time recipient of the Pakistan Stock Exchange (PSX) Top 25 Companies Award, the Company has consistently demonstrated adequate financial performance. In 2006, Ferozsons partnered with Argentina’s Bagó Group to establish BF Biosciences Limited—Pakistan’s first biopharmaceutical company—holding an initial ~80% stake. Following BF Biosciences’ listing on the PSX in October 2024, Ferozsons now holds a 57.36% share, while the Bagó Group retains 14.34%. Ferozsons also serves as the marketing and distribution partner in Pakistan for several global healthcare leaders, including Gilead Sciences Inc. (viral hepatitis and HIV), Boston Scientific Corporation (interventional medical devices), Nihon Kohden (diagnostic and monitoring technologies), and BioGaia (probiotic health solutions). The group’s enduring financial strength is supported by its ability to forge strategic alliances and long-term international partnerships, reinforcing its leadership in Pakistan’s healthcare sector.

The board comprises seven members: four non-executive directors (including the chairperson), two independent directors, and one executive director who also serves as the CEO. This diverse composition ensures compliance with the corporate governance code.

All members of the Board of Directors (BoD) are seasoned professionals with extensive industry experience and long-standing affiliations with the company. The Chairperson, Mrs. Akhtar Khalid Waheed, has been an integral part of the Board since 1992 and has played a pivotal role in the company's continued success. The Board also includes independent directors Mr. Suleman Ghani and Mr. Arshad Saeed, both of whom bring over three decades of experience across various sectors, including the multinational healthcare and pharmaceutical companies. Among the non-executive directors is Mr. Shahid, who has previously served on the boards of prominent organizations such as Bata Pakistan, Lafarge Cement, and Soneri Bank. He currently heads the MD’s Secretariat and Personnel Department at NIT. Mrs. Amna Piracha Khan and Mrs. Munize Azhar Paracha further strengthen the Board with their diverse professional backgrounds and extensive expertise.

The board of Ferozsons Laboratories Limited has established three key committees to enhance its effectiveness: the Audit Committee, the Investment Committee, and the HR & Remuneration Committee. Each of these committees is chaired by an independent director, ensuring impartial oversight and robust governance. Throughout the year, multiple board meetings were held, with strong attendance from all board members. The minutes of these meetings are meticulously documented, reflecting the board's commitment to transparency and accountability. However, it is noteworthy that the majority of the board members are from the sponsoring family.

Ferozsons Laboratories Limited demonstrates a strong commitment to financial transparency. The Company’s external auditors are M/S KPMG Taseer Hadi & Co. Chartered Accountants, a firm recognized as one of the Big-4 with a satisfactory QCR rating and classified in category ‘A’ by the SBP. For the financial year ended June 2024, the firm expressed an unqualified opinion on the Company’s financial statements.

The company boasts a well-defined organizational structure, comprising eight functional and administrative departments. Each department operates with a multilayered hierarchy and is led by a qualified department head. These department heads report directly to the CEO and COO, ensuring streamlined communication and effective management. Currently, all key positions within the organization are fully staffed, reflecting the Company’s commitment to maintaining a robust and efficient workforce.

The management team at Ferozsons Laboratories Limited is composed of qualified professionals with extensive skills and long-standing associations with the company. The CEO, Mr. Osman Khalid Waheed, is a Harvard graduate and possesses over 30 years of experience. Additionally, he holds several directorships in other blue-chip companies such as Packages Limited, Pakistan Center for Philanthropy, and National Management Foundation. His leadership and vision have been instrumental in steering the Company towards sustained growth and innovation. Mr. Omar Khalid Waheed, the Vice President, is a chemical engineer whose expertise is particularly relevant to the pharmaceutical sector. This leadership is assisted by a team of seasoned professionals, including the CFO, Mr. Farhan Rafique, who is a qualified chartered accountant with more than two decades of professional experience.

The Company has established clear reporting lines, further enhanced by the presence of a management committee that includes all chiefs and directors of various departments. This committee meets weekly to discuss key operational and strategic matters, ensuring cohesive and effective management. However, the minutes of these meetings are not formally documented as per the management’s representation.

Ferozsons has implemented SAP S/4 HANA by SAP SE, Walldorf, Germany, ensuring compliance with global standards for enterprise management systems. This advanced platform provides a real-time, end-to-end integrated solution for operations across various functions, including finance, sales and marketing, production, procurement, quality management, and human capital management. The adoption of SAP S/4 HANA enhances operational efficiency, data accuracy, and decision-making capabilities.

Ferozsons Laboratories Limited maintains a robust control environment through a detailed Management Information System (MIS). This system, which features key performance indicators, is submitted to the Chairman/CEO/CFO on a regular basis. To ensure compliance with the Company’s policies and operating procedures, Ferozsons has outsourced its internal audit function to EY Ford Rhodes, Chartered Accountants, a Big-4 firm. This partnership enhances the Company’s internal controls and ensures adherence to the highest standards of corporate governance.

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.

Ferozsons manufactures and market over 100 brands spanning cardiology, diabetes, hepatology, gastroenterology, dermatology and beyond. The Company has established a strong presence within Pakistan and has extended its reach to over 30 low- and middle-income countries (LMICs), addressing their unique healthcare challenges. As per the management representation, Ferozsons ranks No. 20 in the pharmaceutical industry as per the latest IQVIA report (MAT- Feb 24) with a consolidated topline of ~PKR 15.9bln. Additionally, the Company’s highest-selling product, OMEGA, is ranked No. 129 among the Top 200 pharmaceutical industry products, holding a market share of 0.1% and demonstrating a growth rate of 7.5% as per the IQVIA report (MAT- Jun 24).

During 1HFY25, Ferozsons Laboratories Limited reported sales of PKR 9,260mln, reflecting an annualized growth of ~16.8% (PKR 15,855mln in FY24, PKR 11,457mln in FY23, and PKR 9,330mln in FY22). This growth is primarily attributable to increased volumes. The Company’s revenue stream exhibits a notable concentration, with pharmaceutical products accounting for ~68% of total sales, while medical devices contribute the remaining ~32%. Notably, the top-selling product, OMEGA, generated ~PKR 1bln in revenue during the period.

The Company’s gross margin remained relatively stable at ~42.6% in 1HFY25 (FY24: ~40.8%, FY23: ~37.2%, FY22: ~42.7%), supported by new product introductions. The Company’s operating margin stood at ~11.2% in 1HFY25 (FY24: ~11.5%, FY23: ~8.7%, FY22: ~13.9%), and the net profit margin stood at ~4.5% (FY24: ~4.8%, FY23: ~2.6%, FY22: ~8.5%). The margin compression observed in FY23 was primarily due to the devaluation of the PKR, elevated inflation, and increased energy and operating costs.

Ferozsons has gained significant benefits from the strategic international collaborations. By leveraging advanced technology and innovative practices, Ferozsons is well-positioned to meet increasing demand and expand its market presence. These strategic alliances underscore Company’s commitment to sustainability and its vision for long-term growth and development within the pharmaceutical industry.

The net working capital cycle of the Company stood at ~125 days during 1HFY25 (FY24: ~110 days, FY23: ~97 days, FY22: ~146 days). Subsequently, the average receivables days increased to ~52 days (FY24: ~41 days, FY23: ~36 days, FY22: ~52 days). This rise is primarily due to pending dues from the government.

The Company maintained adequate coverage ratios as of 1HFY25, with an EBITDA to Finance cost ratio of 2.9x (2.8x in FY24, 2.5x in FY23, 17.1x in FY22) and a debt payback ratio of 2.8x as of Jun-24. The coverage ratios weakened in FY23 due to an increase in finance costs, driven by high interest rates. The interest coverage ratio stood at 1.9x (FY24: 2.3x, FY23: 0.8x), while the core coverage ratio stood at 1.1x (FY24: 1.3x, FY23: 0.3x).

Ferozsons Laboratories Limited maintained a moderately leveraged structure (~34%) in 1HFY25, compared to ~30.1% in FY24 and ~30.7% in FY23. Short-term borrowings constituted ~66.2% of the total borrowings as of June 2024. This leverage profile indicates a balanced approach to financing, with a significant portion of borrowings being short-term.