Stakeholders have attributed the high performance of pharma and chemical firms to huge demands for drugs in both the local and foreign markets
Most of the listed pharmaceutical and chemical companies have reported higher earnings per share (EPS) in the first nine months of the current fiscal year (FY), compared to the same period in the previous year.
EPS is the profit allocated to each share of a listed firm, indicating a company's profitability.
Some 26 out of 31 pharmaceutical and chemical companies have so far disclosed their earnings on the Dhaka Stock Exchange (DSE) website for the third quarter (July to March) of FY2019.
According to their unaudited reports, 20 companies registered healthy EPS growth during the period, while three pharmaceutical companies registered negative growth and three others incurred losses.
Speaking to Dhaka Tribune, stakeholders have attributed the high performance of pharma and chemical firms to huge demands for drugs in both the local and foreign markets.
They said Bangladeshi pharmaceutical products were being exported to 199 countries and it generated over US$100 million in the last fiscal year.
Due to healthy earnings per share and dividends, pharmaceutical stocks continued to attract both long-term and institutional investors in the capital market, they stated.
Investors said they were increasingly tilting towards pharmaceuticals as the sector’s growth was positive for years, mostly due to a rapidly growing local market. They are hoping for better dividends next year from most of the pharmaceutical companies.
According to the DSE website, Wata Chemicals reported the highest growth in EPS, registering a 269% growth in the first nine months of FY19, compared to the same period last year.
Wata Chemicals’s EPS was Tk2.88 for the January-March 2019 period as against Tk0.86 for January-March 2018.
Ali Ahsan, chief financial officer of Wata Chemicals, told Dhaka Tribune that in March last year, the company added a new sulfuric acid unit (Unit-2) to its Narayanganj plant to meet the rising demand for the product. Its EPS soared as production, sales and profit increased due to production from the new unit, he added.
On the other hand, Far Chemical Industries saw the highest fall in EPS_by 10% to Tk0.98, which was Tk1.09 in the same period last year.
ACI Limited also experienced huge losses during the period, as its EPS was negative Tk5.81 in the nine months of FY19, against EPS of Tk8.64 during the corresponding period of last year.
Md Asad Ullah, executive director and company secretary of Beximco Pharmaceuticals Limited, told Dhaka Tribune: “Our country's pharmaceutical products are now being exported to 199 countries, including the USA. The demand for Bangladeshi pharmaceutical products in the global market is increasing mainly due to product diversification and their superb quality.”
“We have been doing well in the domestic market, too, as many drug companies are expanding their production units to meet growing local demands,” he added.
Asad further said that stock market investors’ interest in the pharmaceutical sector was increasing because of the high potential of the industry, and stocks of pharmaceutical companies remained among the top choices for long-term investors.
Meanwhile, Advent Pharma's EPS rose by 105%, Beacon Pharmaceuticals saw a rise by 60%, Central Pharma 57%, Active Fine Chemicals 41%, Orion Infusion 38%, AFC Agro Biotech 31%, Salvo Chemical 30%, Silva Pharmaceuticals 26%, JMI Syringes and Medical Devices 17%, Beximco Pharma 16%, Renata 16%, The Ibn Sina 14%, Kohinoor Chemicals 13%, Indo-Bangla Pharma 11%, ACI Formulations 11%, Orion Pharma 9%, Pharma Aid 9%, Square Pharma 6%, and Ambee Pharma 0.79% in the first nine months (July’18-March’19), compared to the same period of the previous FY.
The EPS of Far Chemical fell by 10%, Global Heavy Chemicals 8%, while ACME Laboratories EPS declined by 4%, according to DSE.
The EPS of ACI Limited, Beximco Synthetics and Imam Button Industries were negative during the given period.
A recent study by LankaBangla Investment Ltd reveals that local players dominate Bangladesh's pharmaceutical market. The top 10 companies hold 68.49% of the market share, while the top 20 companies hold 86.33%.
Square Pharmaceuticals holds 17.73% of market share, while Incepta holds 10.21%, Beximco 8.39%, Opsonin 5.54%, Renata 4.97%, Healthcare Pharma 4.57%, ACI 4.43%, Aristopharma 4.38%, Eskayef 4.36%, and Acme 3.91%, according to the study.