IBN SINA Pharmaceutical financial analysis: 18% 9M sales growth, Mawna plant capex and record 77% dividend (Oct 2026)

Investment considerations: ten years of growth and a 77% dividend, against a 30% selling cost and a debt-funded new plant

The IBN SINA Pharmaceutical Industry PLC (IPI) makes and sells allopathic ("pharma") medicines and, through its subsidiary The IBN SINA Natural Medicine Ltd., Unani, Ayurvedic and herbal products [1 p.42] [1 p.251]. Its fiscal year ends on 30 June: the audited FY2025 statements cover 1-Jul-2024 to 30-Jun-2025 [1 p.204]. Group revenue was BDT 11,884m in FY2025, of which BDT 10,726m came from the listed parent's pharma business and BDT 1,158m from Natural Medicine [1 p.232]. The sponsor, the IBN SINA Trust, holds 44.31% through seven nominated trustees who also sit on the board [1 p.88].

The investment case is a long, steady growth record now meeting a heavy investment phase. Sales compounded at about 14% a year between FY2016 and FY2025 and the gross margin stayed between 39.9% and 42.4% throughout [14]. But growth slowed to 4.5% in FY2025, ROE fell to 17.1% from 24-25% in FY2019-FY2022, and the company is building a second factory at Mawna, Gazipur, an API plant in the government API park and a polymer packaging plant [1 p.44] [1 p.71]. Capital work-in-progress was 41% of total assets at 31-Mar-2026 [14]. Nine-month FY2026 results show sales up 18.1% and profit after tax up 32.7% [2 p.3], and the board has declared a 77% cash dividend for FY2026, the highest in the company's history [7].

Business: a domestic branded-generics maker, with injections up 55% and tablets down 6% in FY2025

How the company makes money. IPI sells branded generics to doctors' prescriptions through chemists across Bangladesh. Sales are concentrated in Dhaka (29%) and Chattogram (28%) divisions, followed by Khulna (13%) and Rajshahi (9%) [1 p.82]. By therapeutic class the pharma portfolio is led by anti-ulcerants (31%), antibiotics (20%), vitamins and minerals (12%), anti-diabetics (9%) and cardiac drugs (7%) [1 p.82]. By dosage form, tablets were BDT 4,198m of FY2025 revenue, capsules BDT 2,440m, liquids BDT 2,295m and injections BDT 1,479m [1 p.232].

Injections are the fastest-growing form. Injection revenue rose from BDT 954m to BDT 1,479m (+55%) in FY2025 while tablet revenue fell 6.2% from BDT 4,476m to BDT 4,198m, and the number of tablets sold fell from 1,361m to 1,095m [1 p.232]. This shift matters because the Mawna Unit-2 plan names oral solid dosage, sterile and oncology products as its priority lines [1 p.44].

Market. The company quotes IQVIA data: the Bangladesh pharma market grew 17.7% in FY2024-25 to about US$3.39bn, the top 20 companies account for 85% of it, and IPI's own pharma business grew 5% [1 p.42]. On that basis IPI grew more slowly than the market in FY2025, after growing faster in FY2024 (+24.6%) [1 p.73]. The company does not publish its own IQVIA rank or share in the pages we read; that is a gap.

Exports. The directors say the international business added new destinations in FY2025 [1 p.42], but the annual report does not disclose export revenue; export expenses were only BDT 10.1m (FY2025) against BDT 16.3m (FY2024) [1 p.238], and export cash incentive income fell from BDT 4.9m to zero [1 p.239]. Exports are therefore small and this note treats IPI as a domestic business.

Segments: pharma is 90% of sales; the herbal subsidiary earned BDT 1m on BDT 1.16bn of sales

Two reported businesses. The annual report splits sales between pharma (the parent) and Natural Medicine (NM, the herbal and Unani subsidiary). Pharma grew from BDT 6,458m in FY2021 to BDT 10,726m in FY2025; NM grew from BDT 918m to a peak of BDT 1,207m in FY2024 and then fell 4.1% to BDT 1,158m [1 p.81] [1 p.232]. NM's share of group revenue fell from 12.4% to 9.7% [14].

The herbal business is a margin problem, not a sales problem. NM's gross margin was 43.4% in FY2025 (44.6% in FY2024), close to the group's, but its profit from operations fell from BDT 49.5m to BDT 8.7m and profit after tax from BDT 33.8m to BDT 0.98m [1 p.251]. The parent books a distribution commission of BDT 238.2m on NM's products, eliminated on consolidation [1 p.243]. The NM directors plan to add nutraceuticals, dietary supplements, therapeutic food and medicated cosmetics [1 p.251]; no amounts or dates are given.

There is no separate 'other' segment with revenue yet. The API subsidiary (The IBN SINA API Industry Ltd.) and the polymer subsidiary (The IBN SINA Polymer Industry Ltd.) were still pre-revenue at June 2025: the API company used BDT 34.2m in operations and lost BDT 28.2m in FY2025 [1 p.267] [1 p.242].

Line items: materials are 47% of sales and 96% imported; selling costs grew faster than sales in FY2025

Revenue. FY2025 group revenue grew 4.5% to BDT 11,884m [1 p.204]. The directors attribute the slowdown to the student protests and political change in the first quarter, the August-September 2024 floods, gas shortages at the factories and inflation of 10.3% [1 p.42]. Growth came back in FY2026: 9M revenue was BDT 10,405m, up 18.1%, though the March 2026 quarter alone grew only 2.0% (BDT 2,940m against BDT 2,883m) [2 p.3].

Cost of goods sold: materials and the taka. Group raw materials consumed were BDT 3,706m and packing materials BDT 1,912m in FY2025, together 47.3% of revenue, down from 49.5% [1 p.233] [14]. Of 975 raw-material items, 95.69% are imported; of 3,125 packing items only 4.31% are [1 p.242]. Imports of raw and packing materials on a CIF basis rose 41%, from BDT 2,122m to BDT 2,998m, in a year when the taka weakened to 122.71 per US dollar [1 p.242] [1 p.42]. The company also stockpiled: group raw-material stock rose from BDT 593m to BDT 768m [1 p.233]. Manufacturing expenses rose 14.9% to BDT 1,542m [1 p.233], with factory power and fuel up 15.0% to BDT 174m at the parent [1 p.234].

So far IPI has passed costs on. Gross margin was 39.9% in FY2024, 40.4% in FY2025 and 40.8% in 9M FY2026 [14], against a ten-year range of 39.9-42.4% [14]. Sensitivity from history only: in FY2025 raw materials were BDT 3,706m against profit before tax of BDT 840m [1 p.233] [1 p.204], so each 1% change in raw-material cost not recovered in price moved pre-tax profit by BDT 37m, or 4.4%.

Selling and distribution: the defining cost. S&D expenses were BDT 3,587m in FY2025, 30.2% of revenue, up from 29.3% [1 p.204] [14]. Salary, wages and allowances in selling and distribution were BDT 2,174m (+9.3%), field personnel expenses BDT 536m (+9.1%), delivery BDT 338m (+10.3%) and incentives BDT 125m (-21.7%) [1 p.238]. The note says field personnel expenses rose 'due to increase of field personnel movement in order to increase sales' [1 p.238]. S&D grew 7.8% while revenue grew 4.5%, which is most of the reason operating profit fell 1.5% to BDT 946m [14]. In 9M FY2026 S&D was 29.6% of revenue [14].

Administrative expenses were small at BDT 267m (2.2% of revenue) [1 p.204]. Directors received no remuneration apart from meeting fees of BDT 1.4m; key management (four directors-rank staff) received BDT 11.9m [1 p.244].

Finance cost. Financial charges rose 63% to BDT 87.4m in FY2025 and to BDT 90.2m in 9M FY2026 (BDT 59.7m a year earlier) [1 p.204] [2 p.3]. The managing director's report notes borrowing costs rising from 11% to over 15% during FY2025 [1 p.42]; only BDT 5.1m of borrowing cost was capitalised into the projects [1 p.222]. With borrowings up to BDT 3,570m by March 2026 [14], finance cost is the line most exposed to the capex programme.

Other income and tax. Other income was BDT 25.2m, mainly toll-manufacturing charges (BDT 10.5m) and profit on deposits [1 p.239]. The effective tax rate was 24.6% in FY2025 and 24.3% in 9M FY2026 [14].

Capacity and capex: BDT 4.1bn of work-in-progress at Mawna, the API park and the polymer plant, with no stated completion date

Existing capacity. The Shafipur, Gazipur factory had single-shift installed capacity of 1,223m tablets, 410m capsules and 18.8m injections in FY2025 [1 p.243]. Reported tablet output on a single-shift basis exceeded that figure in both years, so the plant runs more than one shift; the note says production 'was made keeping in view market demand' [1 p.243]. The directors say a second site was needed because the existing premises had no room for modern, compliant facilities [1 p.70].

Mawna Unit-2. IPI acquired about 15 acres at Mawna, Gazipur for a second factory (Unit-2) for oral solid dosage, sterile and oncology products [1 p.70] [1 p.44]. Group capital work-in-progress rose from BDT 1,139m (June 2024) to BDT 1,932m (June 2025) and BDT 4,085m (March 2026) [1 p.203] [2 p.2]. At June 2025 it held BDT 939m of buildings under construction and BDT 947m of machinery in transit and installation, with letters of credit opened for the new plant's machinery [1 p.222]. The annual report states no total project cost and no commissioning date; that is the main disclosure gap for an investor.

Backward integration. The API subsidiary holds 1.52 acres in the government API Industrial Park (Gozaria, Munshiganj), transferred from the parent at cost [1 p.243]; IPI has invested BDT 670m for 99.99% of it [1 p.43], and the managing director says the factory is 'about to ready for commercial production' [1 p.71]. The polymer subsidiary at Chalkpara, Mawna will make PET bottles, eye-drop vials, containers and PVC film, the primary packaging the pharma lines use [1 p.71] [1 p.44]. Both would move cost of goods sold (materials) rather than revenue, and both add depreciation and interest first.

Funding. Capex was BDT 947m in FY2024, BDT 976m in FY2025 and BDT 2,226m in 9M FY2026, against operating cash flow of BDT 390m, BDT 724m and BDT 922m [1 p.206] [2 p.5]. Free cash flow was negative in FY2024 (BDT -557m), FY2025 (BDT -253m) and 9M FY2026 (BDT -1,303m) [14]. The gap was filled with bank debt: long-term finance from Pubali Bank for construction and Al-Arafah Islami Bank hire-purchase (HPSM) for machinery, secured on 803 decimals of factory land and the Shafipur building [1 p.228], plus short-term finance, which rose by BDT 1,211m in 9M FY2026 [2 p.5].

Regulation: DGDA price control is the margin risk the filings do not quantify; LDC graduation moved to 2029

Pricing. Bangladesh's Directorate General of Drug Administration (DGDA) sets the prices of essential medicines and approves price changes for others case by case. According to The Business Standard, price controls tightened after 2018, there has been no broad revision since 2022, and approvals take months; it reports that Renata halted more than 150 products in 2025, and quotes its CEO saying raw-material costs have risen above the price of many medicines [10]. This is a single-outlet report and is attributed as such. IPI's own filings that we read do not discuss DGDA pricing, the share of its sales under price control, or any product withdrawals; that is a gap.

What the numbers say. IPI's gross margin did not fall when the taka weakened and import costs rose [14], which suggests most of its portfolio (anti-ulcerants, antibiotics, vitamins, injections) has had room for price or mix changes. The risk is asymmetric: a product whose price is fixed cannot absorb a further move in the taka, and the only levers left are mix, volume and the API plant.

LDC graduation. On 30-Oct-2026 the UN General Assembly moved Bangladesh's graduation from least-developed-country status from 24-Nov-2026 to 24-Nov-2029 [11] [12]. The pharma TRIPS waiver that lets local companies make patented molecules is tied to LDC status, so the deferral gives IPI three more years before any licensing cost on patented products; the filings do not say what share of IPI's sales is patented molecules. The managing director's 2025 report still refers to graduation 'in 2026' [1 p.70], written before the decision.

Ratios: ROE down from 25% to 17%; lowest leverage of the three peers with borrowings shown, and highest selling cost among four listed peers

Growth. Sales growth ran at 13-19% a year from FY2017 to FY2022, slowed to 7.6% in FY2023, jumped to 24.6% in FY2024 and slowed again to 4.5% in FY2025 [14]. Fixed-asset turnover rose from 3.0x (FY2020) to 4.5x (FY2025) [14]: the old plant has been worked harder, which is the other side of the need for Mawna.

Margins. Gross margin moved within 2.5 percentage points over ten years; net margin was 5.3-7.1% except FY2018's 9.7% [14]. The FY2018 jump in profit after tax (BDT 452m against BDT 234m in FY2017 and BDT 336m in FY2019) is not explained in the highlights page [3 p.47]; we treat it as an outlier. FY2025's 5.3% is the lowest net margin in the decade [14].

Returns. ROE on average equity was 24-25% from FY2017 to FY2022 (excluding FY2018), then fell to 21.5% (FY2023), 20.6% (FY2024) and 17.1% (FY2025) [14]. Equity has grown faster than profit because about 70% of earnings is retained and much of it now sits in work-in-progress that earns nothing yet.

Cash conversion. NOCFPS divided by EPS has swung between 0.39x and 1.65x [14], mostly on inventory: inventory days rose from 85 to 93 in FY2025 as the company built raw-material stock [14]. Receivables are tiny (6 days) [14].

Peers on the same basis. Using each company's own FY2025 statements: IPI's gross margin (40.4%) sits between ACME (42.3%) and Renata (41.0%) and well below Beacon (52.0%) [14]. Its selling line (30.2%, labelled 'selling & distribution') is the highest; ACME's 'selling, marketing and distribution' is 19.0%, Beacon's 'marketing, selling & distribution' 26.9% and Renata's 'selling, marketing and distribution' 26.0% [4 p.167] [5 p.190] [6 p.107]. IPI's gap to ACME is 11.1pp. Where IPI stands out is finance cost: 0.7% of revenue against 9.1% at ACME and 10.4% at Beacon, and borrowings/equity of 0.52x against 0.93x and 1.51x [14]. IPI grew slowest of the four in FY2025 (4.5% against 12.5-17.2%) [14].

Balance sheet: borrowings up to BDT 3.6bn and net debt/equity 0.74x by March 2026

Debt. Total borrowings were BDT 1,835m (June 2024), BDT 2,048m (June 2025) and BDT 3,570m (March 2026): long-term finance BDT 1,286m, current portion BDT 90m and short-term finance BDT 2,195m [1 p.203] [2 p.2]. Net debt to equity rose from 0.44x to 0.74x [14]. Long-term HPSM loans are repayable in 84 monthly instalments [1 p.228]. Cash of BDT 335m is held at Islamic and state banks; the FCAD ERQ dollar account of US$88,779 sits at IBBL, AIBL and Sonali Bank [1 p.244].

Working capital. Inventories were BDT 1,878m at March 2026, 83 days of annualised cost of goods sold; payables rose to BDT 1,090m [2 p.2] [14]. Income tax payable rose from BDT 495m to BDT 687m in nine months [2 p.2].

Audit and contingencies. S. F. Ahmed & Co. gave an unqualified opinion on the FY2025 consolidated and separate statements, with revenue recognition as the key audit matter [1 p.196]. Contingencies are limited to income-tax claims of BDT 11.0m for assessment years 2012-2015 under appeal and letters of credit for imports; there were no unprovided capital commitments at 30-Jun-2025 [1 p.244].

The IBN SINA Trust owns 44% and co-invests in subsidiaries; cash dividend raised to 77%

The sponsor. The IBN SINA Trust is the sponsor shareholder: 13,843,312 shares (44.308%) are registered in the names of seven trustees it nominates, who sit on the board as its representatives; no individual holds 10% or more [1 p.88]. The board also has three independent directors (Md. Rafiqul Islam Khan FCA, Parsa Begum and Abdus Sadeque Bhuiyan) [1 p.88]. The managing director is Prof. Dr. A K M Sadrul Islam [1 p.71]. There are no non-resident shareholders [1 p.244].

Related parties. The trust received BDT 87.2m of dividends from IPI in FY2025 [1 p.243]. It is also a co-investor: it holds 35% of the polymer subsidiary, for which it had paid BDT 70m by June 2025 [1 p.43] [1 p.228], and non-controlling interests received a further BDT 10m in 9M FY2026 [2 p.5]. Within the group, the parent transferred its API-park land to the API subsidiary at cost, invested BDT 670m in its shares and charges lease rental to the subsidiaries [1 p.243]. Because these capital injections each exceeded 1% of tangible assets, they needed shareholder approval at the AGM under the BSEC 2009 notification [1 p.43].

Dividend record. Cash dividends have not fallen since FY2019: 30% (FY2019), 38.5%, 47%, 60%, 60%, 63% (FY2024, the highest since listing at the time, per The Financial Express [9]), 64% (FY2025, reported by The Financial Express as the company's highest ever [8]) [3 p.47] [1 p.73] and 77% for FY2026, declared on 1-Oct-2026 with a record date of 26-Oct-2026 [7]. Before FY2019 the company paid part of its dividend in shares (5-10% stock) [3 p.47]. The cash payout ratio stayed near 30% of EPS from FY2019 to FY2025 [14], so rising dividends came from rising profit rather than a higher payout. The FY2026 payout ratio will be known when the annual report is published. The FY2026 dividend costs BDT 241m; the trust's share is about BDT 107m [14]. The dividend policy lists current earnings, distributable reserves and liquidity, and any debt covenants restricting dividends, among the factors considered [1 p.170].

Earnings quality: clean profit, but free cash flow negative for two and a half years

Earnings quality. FY2025 earnings are clean: no large one-offs, other income was 3% of pre-tax profit, and the tax rate was about 25% [1 p.239] [14]. The 9M FY2026 profit growth of 32.7% came from the operating line: gross profit rose BDT 713m while S&D rose BDT 482m [2 p.3]. The weak March 2026 quarter (profit BDT 145.8m against BDT 173.5m) breaks that pattern and is the first thing the FY2026 annual report needs to explain [2 p.3].

What drives returns to shareholders. Three things: whether sales growth returns to the 13-19% of FY2017-FY2022; whether the selling line stops growing faster than sales; and whether Mawna, the API plant and the polymer plant earn a return on roughly BDT 4bn of capital before the interest bill grows. Until those plants run, the dividend is paid from operating cash flow while capex is paid from borrowings [14].

Valuation facts only. At BDT 293.2 the shares trade at 11.6x trailing EPS of BDT 25.19 (FY2025 EPS less 9M FY2025 plus 9M FY2026) and 2.11x March 2026 NAV [13] [2 p.3] [14]. The year-end P/E ranged from 11.6x to 27.4x in FY2016-FY2025 [14]. These are facts about the price, not a view on it.

What's next: the FY2026 report and the 23-Nov-2026 AGM will show how much of the plant is finished

Items already disclosed that move the lines (direction only, no forecast):

Risks: taka and DGDA prices on one side, project delays and interest on the other

Each risk below is tied to the line it moves. Their size is best judged against FY2025 profit before tax of BDT 840m [1 p.204].

Key questions: project cost, selling efficiency and dividend coverage

FAQ

When does IBN SINA's fiscal year end?

30 June. FY2025 runs from 1-Jul-2024 to 30-Jun-2025 [1 p.204].

What dividend did IBN SINA declare for FY2026?

77% cash (BDT 7.70 a share), declared 1-Oct-2026, record date 26-Oct-2026, AGM 23-Nov-2026 [7].

Who owns IBN SINA Pharmaceutical?

The IBN SINA Trust holds 44.31% through seven trustees; no individual owns 10% or more [1 p.88].

What is the Mawna project?

A second factory (Unit-2) on about 15 acres at Mawna, Gazipur for oral solid, sterile and oncology products [1 p.70] [1 p.44].

How much debt does IBN SINA have?

BDT 3,570m of bank borrowings at 31-Mar-2026, up from BDT 2,048m at June 2025 [2 p.2] [1 p.203].

Which results does this note use?

Annual reports to FY2025 and the unaudited nine months to 31-Mar-2026. The FY2026 annual report was not yet in our corpus; only the DSE dividend declaration is used for FY2026.

Sources

1. The IBN SINA Pharmaceutical Industry PLC Annual Report 2024-25 (year to 30-Jun-2025) · link · accessed 2026-10-31
2. The IBN SINA Pharmaceutical Industry PLC unaudited consolidated statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
3. The IBN SINA Pharmaceutical Industry Ltd. Annual Report 2018-19 (key financial highlights 2014-2019) · link · accessed 2026-10-31
4. The ACME Laboratories Ltd. Annual Report 2024-25 · link · accessed 2026-10-31
5. Beacon Pharmaceuticals PLC Annual Report 2024-25 · link · accessed 2026-10-31
6. Renata PLC Annual Report 2024-25 · link · accessed 2026-10-31
7. Dhaka Stock Exchange announcements for IBNSINA (dividend declaration 1-Oct-2026: 77% cash for FY to 30-Jun-2026, record date 26-Oct-2026, AGM 23-Nov-2026; quarterly board meetings and EPS disclosures) · link · accessed 2026-10-31
8. The Financial Express, 'Ibn Sina posts 5.5pc profit drop, offers record dividend' (6-Oct-2025) · link · accessed 2026-10-31
9. The Financial Express, 'Ibn Sina share price drops 5pc despite record dividend' (3-Oct-2024) · link · accessed 2026-10-31
10. The Business Standard, 'Why drug prices in Bangladesh remain fixed even as production costs surge' (30-Nov-2025) · link · accessed 2026-10-31
11. The Daily Star, 'LDC graduation: Three more years to finish homework' (31-Oct-2026) · link · accessed 2026-10-31
12. The Business Standard, 'Bangladesh gets 3 more years before LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
13. AnalystBro price data (TradingView feed): DSE:IBNSINA daily bars to 29-Oct-2026 · link · accessed 2026-10-31
14. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31