Asiatic Laboratories financial analysis: 9M FY26 sales +99%, IPO funds unused, lock-in extended (Oct 2026)

Investment considerations: a fast-growing small pharma with lean costs, but debt, unused IPO money and a regulator's lock-in

Asiatic Laboratories Limited (ALL) is a small Bangladeshi maker of branded generic medicines: tablets, capsules, oral liquids, powder for suspension, ophthalmic drops and injectables, made at one plant in the Tongi industrial area of Gazipur [1 p.9]. It was incorporated in 1970, began commercial operation in 1998, became a public company in 2020 and listed on the Dhaka and Chittagong exchanges on 6 March 2024 after a BDT 950m book-built IPO [3 p.67] [14]. Revenue was BDT 1,765m in FY2025 (year to 30 June), all of it in the domestic market [1 p.99].

The story since listing has two halves. The operating half is strong: revenue grew 27.5% in FY2025 and 99% in the first nine months of FY2026, with gross margin up to 45.0% [2 p.2] [16]. The capital half is weak: the IPO money was mostly unspent a year after listing, the company took on BDT 1.03bn of new long-term loans in FY2025 [1 p.107], cash fell to BDT 18m [1 p.69], and the securities regulator extended the sponsors' lock-in, citing IPO-fund use and a 32-storey building announced in September 2025 [8] [10].

Business: one Tongi plant, domestic generics, no exports since FY2022

ALL sells prescription generics to doctors and pharmacies in Bangladesh through its own field force: 465 of its 737 staff are in marketing [1 p.103]. The company names Antison, Afixime, Asizith, Ceroxime, Asixone, Xofena, ESO-20, Calfor D, Ulsec, Lexnil and Ocuvit among its main brands, covering antibiotics (cefixime, azithromycin, cefuroxime, ceftriaxone), stomach-acid drugs (esomeprazole), calcium and eye care [1 p.12]. It says it has 25 products registered in Myanmar and registrations under way in Nepal, Sri Lanka, Vietnam, Kenya and other markets [1 p.12], but there have been no export sales since FY2022, when exports were BDT 144m, 9.8% of revenue [4 p.98].

The plant is old and small by sector standards: two multistorey buildings on a 43,200 sq ft site, built in 1994-95, with ophthalmic and ampoule areas added in 2009-2013 and a separate cephalosporin unit for powder for suspension and injectable vials built in 2010-2012 [1 p.12]. The company does not name a market share; at BDT 1.77bn of sales it is about one-seventh of Beacon and one-twentieth of ACME [5 p.190] [6 p.167].

The FY2025 mix moved more than a normal year allows. Tablet revenue rose 82% to BDT 1,038m while syrup fell 72% to BDT 35m and creams and ointments fell 73% to BDT 22m [1 p.99]. Production volumes do not show the same swing: syrup output was 1.27m units in both years and tablet output rose 23% [1 p.104]. The revenue note also prints a unit price and quantity next to each line that multiply to the FY2024 value, not the FY2025 one [1 p.99]. We therefore treat the dosage-form split as indicative and the total as firm.

IPO proceeds: BDT 649m of BDT 950m unspent at June 2025, held mostly as advances to an unnamed party

The IPO raised BDT 950m by book-building: 34.5m new shares, with eligible investors paying the BDT 50 cut-off price and general investors BDT 20 [14] [7]. The prospectus plan was BDT 580.5m for new plant and machinery, BDT 61.5m for a factory building, BDT 280m to repay bank loans and BDT 28m of issue costs [1 p.108]. The share capital rose from BDT 878m to BDT 1,224m and BDT 604.5m went to share premium, less BDT 26.3m of IPO costs [1 p.71].

By 30 June 2025 only the loan repayment (BDT 278.8m) and issue costs (BDT 21.9m) had been spent; BDT 649.4m, 68% of the money, was shown as unused [1 p.108]. The note explains where it sits: BDT 2.9m in the IPO bank account, BDT 601.0m paid as 'Advance to Party for Installation & Acquisition of Plant & Machinery', BDT 67.0m as an advance for factory building construction, and BDT 3.5m in the company's own account [1 p.108]. The balances total BDT 674.4m because they include BDT 25.2m of net interest earned on the IPO account [1 p.108]. The advances are why 'Advances, deposits and prepayments' rose from BDT 127m (June 2023) to BDT 799m (June 2025) [1 p.69] [3 p.63]. The filing does not name the party in the pages we read, and the related-party note lists only directors' fees, the managing director's remuneration and a BDT 0.72m depot rent paid to him [1 p.103].

BSEC acted on this in February 2026. It extended the lock-in on shares of 183 sponsors, directors and placement holders named in the prospectus by three years beyond the existing expiry, or until a proposed 32-storey building is built, in commercial operation and holds a RAJUK occupancy certificate, whichever is later [8] [10]. The Financial Express also reported the extension, and that the regulator was concerned the building disclosure was timed ahead of the lock-in expiry [9]. The Daily Star reports that BSEC cited irregular use of IPO funds and acted on a DSE inspection, and that the regulator said the company had no feasibility study, building-plan approval or environmental clearance for the tower, which it considered outside the Memorandum of Association [8]. Before the extension, 32.8m shares held by other pre-IPO holders (including placement holders) were due to unlock in early March 2026 [14].

Line items: price and mix drove FY2025 growth; lean opex lifted margins; interest quadrupled

Revenue. Sales fell 12.5% in FY2023, the year the IPO was suspended and exports stopped, then grew 7.4% in FY2024 and 27.5% in FY2025 [16]. FY2025 growth split into 9.1% more units (14.3m packs against 13.1m) and 16.8% higher revenue per unit (BDT 123.3 against 105.6) [1 p.103] [16], so price and mix did most of the work. Quarterly sales then stepped up: Q4 FY2025 alone was BDT 617m (FY2025 less 9M) and Q3 FY2026 BDT 789m [1 p.70] [2 p.2]. The interim statements give no product split, so the source of the 99% nine-month growth is not disclosed.

Cost of goods sold and API costs. Materials are the biggest cost: raw materials (mostly active pharmaceutical ingredients, APIs) were 29.3% of FY2025 revenue and packing materials 14.6% [1 p.99] [16]. The sector depends on imports for nearly 90% of its APIs and raw materials, according to Square Pharmaceuticals' FY2025 directors' report [11 p.21], but ALL reports no direct imports: the FOB/CIF import table is blank for FY2024 and FY2025 [1 p.104], so it buys through local importers and feels the BDT/USD rate through their prices. Raw material cost per kg rose only 3.9% in FY2025 (BDT 6,717 to 6,979) [1 p.103] [16]. Materials have stayed at 41.5%-43.9% of revenue since FY2022, which is why gross margin held at 42-43% through the taka's 2022-2024 depreciation [16].

Operating expenses. Admin was BDT 68m and marketing and selling BDT 154m in FY2025; both fell slightly in taka while revenue rose 27.5% [1 p.100]. Operating expenses dropped from 16.6% of revenue in FY2024 (which carried BDT 6.8m of IPO road-show cost) to 12.6%, and to 9.2% in 9M FY2026 [16]. That is the main reason operating margin rose to 30.8% in FY2025 and 35.8% in 9M FY2026. Spending this little on promotion is unusual for a branded generics maker; it is a question for management whether it holds as sales grow.

Finance cost, other income and tax. Financial expenses jumped from BDT 49m to BDT 193m in FY2025, of which BDT 184m was interest on long-term loans [1 p.107]; BDT 136m of it fell in Q4 alone (FY2025 less the 9M figure of BDT 57m) [1 p.70] [2 p.2]. 9M FY2026 finance cost was BDT 157m [2 p.2]. Other income, mostly interest on IPO money, fell from BDT 17.9m to 1.4m [1 p.70]. The effective tax rate swings with deferred tax on revalued assets: 9.9% in FY2024 (a BDT 24.7m deferred credit) and 22.8% in FY2025 [1 p.70] [16]. Cash tax paid was BDT 15.8m in FY2025 against BDT 46.8m of current tax [1 p.72], and current tax payable rose to BDT 252m by March 2026 [2 p.1].

Depreciation and people. Depreciation was BDT 151.6m on owned assets plus BDT 13.4m on leased (right-of-use) assets in FY2025, against BDT 137.1m and 13.6m a year earlier [1 p.107]; BDT 121.2m of it sits in manufacturing overhead [1 p.100]. Because PPE is carried at revalued amounts, depreciation is higher than on historical cost, which depresses reported margins and ROE but not cash flow. Total pay to staff and directors was BDT 167.0m in FY2025 against BDT 150.8m, for 737 employees against 749 [1 p.103]: pay per head rose about 12% while headcount was flat. The workers' profit participation fund takes 5% of profit before tax (BDT 16.5m in FY2025) [1 p.70]; the five-year table prints it without brackets although it is deducted [1 p.27]. When the new machinery bought with the IPO advances is commissioned, depreciation will rise from a base that already absorbs about 9% of revenue, so the operating leverage of the new capacity depends on how quickly it is filled.

Capacity and regulation: 68% utilisation after a 13% capacity rise; price-control exposure undisclosed

Capacity. Stated capacity rose 12.9% to 22.1m units in FY2025 and output 16.1% to 15.0m, so utilisation was 67.7% [1 p.104]. Tablets ran at 75.4% and capsules fell to 55.4%. The FY2025 investing outflow of BDT 1.30bn (BDT 1.02bn into capital work-in-progress) [1 p.72] added BDT 741m of property, plant and equipment [1 p.69]; the 9M FY2026 revenue jump suggests part of it is now producing, but the interim statements do not give updated capacity.

DGDA price controls. The Directorate General of Drug Administration fixes the price of drugs on the essential list and approves the 'indicative' prices of the rest, under powers in the Drugs and Cosmetics Act 2023 [12]. ALL does not say what share of its sales is on the essential list, so the exposure cannot be measured from the filings. What the numbers do show is that the company raised revenue per unit 16.8% in FY2025 after a 10.2% fall in FY2024 [16]; most of its named brands (cefixime, azithromycin, esomeprazole) are widely sold generics where price increases need DGDA approval.

LDC graduation and TRIPS. Bangladesh is scheduled to leave the least-developed-country group on 24 November 2026 [13]; Square's directors' report notes that some TRIPS flexibilities will then be phased out [11 p.21]. ALL makes off-patent generics and has no exports, so the direct effect is likely smaller than for exporters, but a tighter patent regime would limit new molecule launches.

Ratios: ROE 3.9% on a revalued base, 364-day cash cycle, interest cover down to 2.7x

Returns are low because the balance sheet carries revalued land and buildings. PPE was revalued in FY2021 (a BDT 1.93bn surplus) [1 p.27], and the revaluation surplus is still BDT 1.62bn [2 p.1]. ROE was 3.8%, 4.6% and 3.9% in FY2023-FY2025; excluding the surplus it was 5.1% in FY2025. Pre-tax ROCE was 6.8% [16]. Annualising 9M FY2026 profit of BDT 486m would roughly double these, which is the main thing the FY2026 accounts will test.

Working capital. Receivable days rose from 69 (June 2022) to 134 (June 2025) as receivables grew 62% in a year when sales grew 27% [16]; they came back to 97 days on annualised 9M sales. Inventory was 233 days of COGS at June 2025, with raw material stock up from BDT 183m to BDT 287m [1 p.99]. Trade payables are tiny (BDT 7m at June 2025) against BDT 963m of material purchases [1 p.69] [1 p.100], so material purchases are paid in cash or in advance; the cash conversion cycle was 364 days [16].

Peers. On the same basis (each company's FY2025 standalone filing), ALL grew faster and kept more of each taka of sales than two larger listed generic makers, mostly because it spends far less on selling; its finance cost share is similar [5 p.190] [6 p.167] [16].

Balance sheet: BDT 1.3bn of new loans and BDT 18m of cash at June 2025; 9M FY2026 cash flow recovered

Cash flow. Operating cash flow was BDT 332m, 373m and 312m in FY2022-FY2024 and fell to BDT 203m in FY2025 as receivables and inventory absorbed cash [1 p.72] [3 p.66] [4 p.71]. Investing outflows rose to BDT 787m in FY2024 and BDT 1.30bn in FY2025, so free cash flow was negative by BDT 475m and BDT 1.10bn [16]. FY2025 was funded with BDT 1.03bn of new long-term loans [1 p.107]; cash fell from BDT 446.7m (June 2023, holding IPO money) to BDT 17.7m (June 2025) [1 p.69] [3 p.63]. In 9M FY2026 the picture reversed: operating cash flow BDT 701m covered investing outflow of BDT 632m [2 p.4].

Debt. Long-term borrowings including the current portion went from BDT 87m (June 2024) to BDT 1,302m (June 2025) and BDT 1,526m (March 2026) [1 p.69] [2 p.1]; short-term loans were repaid in 9M FY2026 [2 p.4]. The FY2025 interest charge of BDT 184m on long-term loans [1 p.107] is high against an average balance of about BDT 0.7bn, which suggests a double-digit rate or loan costs not capitalised; the loan note pages we read describe only older lease facilities from Hajj Finance at 12-12.5% [1 p.96].

Audit. FAMES & R gave an unqualified opinion on FY2025, with key audit matters on inventory, deferred tax and leases [1 p.66]; the directors report no reservation or adverse remark [1 p.34]. The FY2023 accounts in our corpus are signed in November 2024 [4 p.68], after the listing, and the FY2025 events-after-the-period note still refers to the September 2022 IPO approval [1 p.107].

Governance: a family holds 40.7%, sponsors skip the dividend, and BSEC has locked their shares

Sponsors. ALL is controlled by one family. Chairman Tahmina Begum holds 16.70m shares, managing director Monir Ahmed 20.11m, and directors Salina Ahmed, Sadia Ahmed and Maksud Ahmed 3.81m, 5.40m and 3.81m: 49.83m shares, 40.71% of the company [1 p.10] [1 p.11]. Before the IPO the same 49.83m shares were 56.72% [4 p.10]. The board has seven members including two independent directors, Shafiqul Kabir Khan and Raihan Sarkar [1 p.35]; the governance report describes all seven directors, including the managing director, as non-executive [1 p.35]; the managing director received BDT 3.0m in FY2025 [1 p.103].

Related parties. The company has no subsidiaries or associates [1 p.10], and the only disclosed related-party items are board fees, the managing director's remuneration and BDT 720,000 a year of rent for the Tangail depot paid to the managing director [1 p.103]. The counterparty of the BDT 668m of plant and building advances is not disclosed as related; an investor would want it named.

Dividends. The first dividend as a listed company was 10% cash (BDT 1.00 a share) for FY2024, declared for all holders except sponsors and directors, a payout of BDT 72.6m [1 p.71]; FY2025 was the same 10% on the same basis [1 p.28] [2 p.3]. Paid on all 122.4m shares, BDT 1.00 would be 48% of FY2025 EPS of BDT 2.09; because sponsors waive it, the cash cost is BDT 72.6m, 28% of FY2025 profit [16].

Regulatory history. As reported by TBS, BSEC suspended the IPO subscription in January 2023 over allegations about land ownership, financial statements and share-money deposit reports, fined each director and the issue manager BDT 5m in October 2023, and lifted the suspension about a month later [7]. The February 2026 lock-in extension is reported by three outlets [8] [9] [10].

Post-IPO price: from BDT 20 at issue to a BDT 27.8 low and a BDT 146.9 high; BDT 108 now

Post-IPO price behaviour (facts only). The share listed on 6 March 2024 with general investors paying BDT 20 [14]; it rose by the 10% daily limit on the first day and reached BDT 42.60 on 18 March 2024 (TBS) [7]. Our price feed begins in June 2024, when the month closed at BDT 49.8. The share then fell to a low of BDT 27.8 in October 2024, recovered to BDT 59.5 by September 2025 around the building announcement, dipped to BDT 44.2 in January 2026, and rose to a high of BDT 146.9 in July 2026; that run covered the February 2026 lock-in extension and the half-year and nine-month results. It closed at BDT 108.0 on 29 October 2026 [15]. Over the same span from June 2024 the DSEX moved from 5,498 to 5,417 [15].

What's next: FY2026 board meeting on 31-Oct-2026, the IPO plant advance, and the building plan

Risks: IPO-fund use, leverage and governance outweigh the usual API and price-control risks

Each risk is tied to the line it moves; sizes are from FY2025 where measurable.

Key questions: the plant advance, the source of growth, and the tower decide what shareholders get

At BDT 108.0 the share trades at 24.8x trailing EPS of BDT 4.35, 1.88x March 2026 NAV and 2.44x NAV excluding the revaluation surplus [15] [16]. These are facts about the price, not a view on it.

FAQ

When did Asiatic Laboratories list?

On 6 March 2024, after a BDT 950m book-built IPO [14].

How much of the IPO money has Asiatic Laboratories used?

BDT 300.6m of BDT 950m by 30 June 2025, for loan repayment and issue costs; BDT 649.4m was unused and mostly paid as advances to a party the filing does not name [1 p.108].

Why did BSEC extend the lock-in?

BSEC cited the incomplete use of IPO funds and a DSE inspection; the Daily Star reported it said the 32-storey plan lacked a feasibility study, RAJUK plan approval and environmental clearance and fell outside the Memorandum of Association [8], and the Financial Express reported the regulator cited a concern that the building disclosure was timed ahead of the lock-in expiry [9]. These are the regulator's reasons as reported, not findings of this report.

What were Asiatic Laboratories' 9M FY2026 results?

Revenue BDT 2,288m (+99%), net profit BDT 486m, EPS BDT 3.97 [2 p.2].

Does Asiatic Laboratories export?

Not since FY2022, when exports were BDT 144m [4 p.98].

Which results does this report use?

Annual reports FY2023-FY2025 (five-year data from FY2020) and the unaudited nine months to March 2026. The prospectus is not in our corpus; the board is scheduled to meet on 31-Oct-2026 at 5:00 PM on the FY2026 accounts; those results are not reflected here.

Sources

1. Asiatic Laboratories Limited Annual Report 2024-25 (year to 30-Jun-2025) · link · accessed 2026-10-31
2. Asiatic Laboratories Limited unaudited financial statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
3. Asiatic Laboratories Limited Annual Report 2023-24 (incl. five-year data from FY2020) · link · accessed 2026-10-31
4. Asiatic Laboratories Limited Annual Report 2022-23 · link · accessed 2026-10-31
5. Beacon Pharmaceuticals PLC Annual Report 2024-25 · link · accessed 2026-10-31
6. The ACME Laboratories Ltd. Annual Report 2024-25 · link · accessed 2026-10-31
7. The Business Standard, 'Asiatic Lab's share price doubles in 8 days' (18-Mar-2024) · link · accessed 2026-10-31
8. The Daily Star, 'Sponsors, directors of Asiatic Laboratories barred from selling shares' (17-Feb-2026) · link · accessed 2026-10-31
9. The Financial Express, 'Lock-in on Asiatic Lab shares extended amid price manipulation concerns' (Feb-2026) · link · accessed 2026-10-31
10. The Business Standard, 'Asiatic Laboratories' pre-IPO shares to remain locked-in until completion of 32-storey building' (Feb-2026) · link · accessed 2026-10-31
11. Square Pharmaceuticals PLC Annual Report 2024-25 (directors' report, sector overview) · link · accessed 2026-10-31
12. Drugs and Cosmetics Act 2023 (Bangladesh): DGDA price-fixing powers · link · accessed 2026-10-31
13. UN General Assembly resolution A/RES/76/8 (24-Nov-2021): Bangladesh leaves the LDC category on 24-Nov-2026 · link · accessed 2026-10-31
14. DSE announcements and IPO data via AnalystBro events (IPO 6-Mar-2024; board meeting for FY2026 accounts 31-Oct-2026) · link · accessed 2026-10-31
15. AnalystBro price data (TradingView feed): DSE:ASIATICLAB and DSEX bars to 29-Oct-2026 (feed starts June 2024) · link · accessed 2026-10-31
16. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31