Square Pharma earns Tk6,286cr revenue in nine months

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Despite high inflation constraining people's spending capacity, Square Pharmaceuticals has registered record revenue with double-digit growth in the first nine months of the ongoing fiscal year.

The country's leading drugmaker published unaudited statements for the first three quarters on Monday on its website, saying its revenue stood at Tk6,286 crore in July-March, marking 12.55% year-on-year growth.

Muhammad Zahangir Alam, chief financial officer of Square Pharma, told The Business Standard, "We have broken our records every quarter as the company has maintained its growth momentum despite facing several challenges caused by inflation and foreign currency shortages."

Market insiders said during a challenging economic period marked by high inflation, the spread of diseases proved to be an advantage for drugmakers, as people were compelled to purchase medicines.

However, Square Pharma could not shield itself from the impact of inflation, which led it to face a significant increase in expenditures for the purchase of raw materials, according to the company's financial statement.

In July-March of FY24, its profit grew by 9% year-on-year to reach Tk1,464 crore. At the end of March, its earnings per share stood at Tk18.24, compared to Tk16.82 a year ago.

The chief financial officer explained that while their revenue surged, profitability didn't rise at the same pace due to escalating business costs. Over the last few years, operational expenses have notably increased, yet many medicine prices have remained stagnant, hindering their ability to offset the rising costs.

He elaborated that out of the 700 types of medicines they produce, only around 10 received approval from the drug administration for price increases in response to cost hikes.

The pharmaceutical company consistently invests to uphold world-class standards in medicine quality, which in turn enhances export opportunities.

However, if profitability shrinks, sustaining such investment becomes challenging, limiting their ability to invest at the desired level, he emphasised.

Earlier, it had paid a record 105% cash dividend to its shareholders for the fiscal 2022-23 and decided to invest Tk400 crore to boost its production. In the fiscal 2021-22, the company paid a 100% cash dividend to its shareholders.

In the last fiscal year, Square Pharma's board of directors approved a Tk400 crore investment for modernization, capital machinery, and land for future expansion.

On Monday, its shares closed 1.09% lower at Tk208 each at the Dhaka Stock Exchange.

Currently, Square Pharmaceuticals holds the position of the third-largest stock on the country's premier bourse, with its market capitalization soaring to Tk18,642 crore.