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Liven Pharma Q3 FY26: Revenue Rebounds, but Liquidity Is Still Capital-Led

Liven Pharma doubled Q3 revenue and narrowed its net loss, but 9M operations remained loss-making and liquidity improved mainly through a Rs200m rights issue.

Sep 23, 2026

Verdict

Liven Pharma Limited’s Q3 FY26 result shows a genuine rebound in sales and gross profit, but not yet a return to core profitability. For the three months ended March 31, 2026, revenue nearly doubled year on year to Rs29.25 million, gross profit rose 125.2% to Rs8.42 million, and gross margin improved to 28.8% from 25.3%. The quarterly loss after tax narrowed 58.9% to Rs3.96 million from Rs9.62 million. That is meaningful operating progress.

The broader nine-month picture is more cautious. Revenue for 9MFY26 was Rs92.63 million, down 23.3% year on year, and the company reported an operating loss of Rs37.62 million versus an operating profit of Rs3.33 million in the comparable period. The Rs5.90 million nine-month net loss looks much smaller than the operating deficit because it was cushioned by Rs10.37 million of other income and a Rs22.58 million deferred-tax credit. Meanwhile, the prior-year nine-month profit was unusually elevated by Rs119.30 million of other income, including gains on asset disposals and a liability write-back. The cleanest conclusion is therefore that Q3 improved, but the business has not yet demonstrated recurring operating profitability.

Liquidity is much stronger than at June 2025, but the improvement is primarily capital-led. A Rs200 million rights issue lifted paid-up capital, cash rose to Rs178.80 million, and current liabilities declined. Operating cash flow, however, remained negative at Rs11.48 million for the nine months. The next result cycle needs to show that the stronger balance sheet can support a durable improvement in sales, overhead absorption and cash generation without relying on non-operating gains or fresh equity.

Results at a glance

  • Company: Liven Pharma Limited
  • Ticker: LIVEN
  • Reporting period: quarter and nine months ended March 31, 2026
  • Basis: company-level condensed interim financial statements, unaudited and prepared under IAS 34; June 30, 2025 balance-sheet comparatives are audited
  • Q3 revenue: Rs29.25 million, up 98.2% year on year
  • Q3 gross profit: Rs8.42 million, up 125.2%
  • Q3 gross margin: 28.8% versus 25.3%, an improvement of about 3.45 percentage points
  • Q3 loss after tax: Rs3.96 million versus Rs9.62 million loss; loss narrowed 58.9%
  • 9MFY26 revenue: Rs92.63 million, down 23.3% year on year
  • 9MFY26 gross profit: Rs30.35 million, down 20.2%; gross margin improved to 32.8% from 31.5%
  • 9MFY26 operating result: Rs37.62 million loss versus Rs3.33 million profit
  • 9MFY26 profit after tax: Rs5.90 million loss versus Rs110.86 million profit
  • 9MFY26 net cash used in operating activities: Rs11.48 million versus Rs230.10 million
  • Cash and bank balances at March 31, 2026: Rs178.80 million versus Rs7.88 million at June 30, 2025
  • Dividend: none declared for the period

What improved

The strongest change is the Q3 top line. Revenue rose 98.2% year on year, while gross profit grew even faster at 125.2%. That combination lifted gross margin by about 3.45 percentage points to 28.8%. Economically, this means the company generated materially more gross profit from each rupee of sales than in the comparable quarter. The filing does not provide enough product or volume detail to attribute the improvement to pricing, mix, utilization or a specific therapy portfolio, so those causes should not be assumed.

The quarterly net loss also narrowed sharply. Loss after tax fell from Rs9.62 million to Rs3.96 million. The improvement is not solely an accounting effect: gross profit itself rose by Rs4.68 million. However, the business still did not cover its operating expense base. Administrative expenses were about Rs8.41 million in Q3, while selling and distribution expenses were about Rs3.60 million; together they exceeded quarterly gross profit before considering other expenses and finance costs. Finance cost also rose to about Rs0.25 million from only Rs0.01 million.

The balance sheet is substantially more liquid. Current assets more than doubled to Rs306.12 million from Rs147.95 million at June 2025, while current liabilities fell 10.6% to Rs80.81 million. The current ratio therefore improved to roughly 3.79 times from 1.64 times. Running finance fell to Rs5.93 million from Rs11.19 million, and non-current long-term financing declined to Rs3.21 million from Rs5.10 million. These changes reduce immediate balance-sheet pressure.

Cash usage from operations also improved materially. Net cash used in operating activities was Rs11.48 million for 9MFY26, versus Rs230.10 million in the prior comparable period. That is a major improvement in cash absorption, but it should not be confused with positive operating cash generation: the figure remains an outflow.

What weakened / needs attention

The nine-month revenue line is still below last year. Despite the Q3 rebound, 9MFY26 revenue fell 23.3% to Rs92.63 million. The third quarter therefore recovered only part of the weakness accumulated earlier in the fiscal year. The next quarter matters because it will show whether Q3 represented a sustainable sales run-rate or simply a strong quarter inside an uneven year.

More importantly, the operating result deteriorated sharply. Nine-month gross margin improved modestly to 32.8% from 31.5%, but lower sales reduced absolute gross profit by 20.2% to Rs30.35 million. Selling and distribution expense increased to Rs9.40 million from Rs6.61 million, finance cost rose to Rs1.56 million from almost nil, and the period included sizeable non-cash charges identified in the cash-flow reconciliation: a Rs19.94 million provision for obsolete stock and a Rs9.57 million allowance for expected credit losses. These charges do not consume cash immediately, but they are economically important because they indicate inventory and receivable quality issues that can recur unless the underlying exposures are resolved.

The nine-month bottom line is also flattered relative to the operating result. Other income was Rs10.37 million, of which Rs9.93 million came from gain on disposal of property, plant and equipment. In addition, a Rs22.58 million deferred-tax credit reduced the reported net loss. Neither item demonstrates recurring pharmaceutical operating profitability. Without them, the underlying earnings picture would be materially weaker.

The prior-year comparison requires even more care. In 9MFY25, other income was Rs119.30 million, including an Rs85.42 million gain on disposal of property, plant and equipment and a Rs33.87 million liability write-back. Those items were central to the Rs110.86 million reported profit after tax in the comparable period. It would therefore be misleading to interpret the swing from that profit to the current loss as a simple deterioration in the recurring business.

Cash flow and capital structure

The most visible balance-sheet change is the rights issue. The company issued 20 million shares at Rs10 each, raising Rs200 million and increasing paid-up capital from Rs930.40 million to Rs1.13 billion. The company states that the right shares were credited through CDC in January 2026. Cash-flow statements show Rs200 million of share-issuance proceeds and net financing inflow of Rs195.91 million.

That financing explains why cash and bank balances increased by Rs170.91 million during the period to Rs178.80 million even though operations used Rs11.48 million and investing activities used Rs13.52 million. In other words, the liquidity transformation is real, but it is not yet self-funded by the business.

Working capital looks cleaner in several areas. Trade debts fell to Rs3.98 million from Rs9.40 million at June 2025, inventory eased to Rs119.92 million from Rs123.32 million, and trade and other payables fell to Rs57.30 million from Rs61.72 million. Yet inventory remains large relative to the company’s current sales scale, and the Rs19.94 million obsolete-stock provision reinforces the need to watch stock quality and turnover rather than only the headline current ratio.

Recurring versus exceptional earnings

The recurring positive signal is the Q3 improvement in revenue, gross profit and gross margin. Those are the pieces that can form the base of a real turnaround if they persist.

The recurring challenge is overhead absorption. Even after the Q3 sales rebound, gross profit remained insufficient to cover the reported administrative, selling, other and financing costs. The company must either sustain materially higher gross profit, reduce the expense base, or both before the income statement becomes structurally profitable.

The most important non-core items are clear in the filing. Current-period other income is dominated by a fixed-asset disposal gain, while the nine-month net result benefits from a deferred-tax credit. The comparable period was even more distorted by fixed-asset disposal gains and a liability write-back. The obsolete-stock and expected-credit-loss provisions are non-cash accounting charges in the current period, but they should not automatically be treated as harmless one-offs because they reflect economic losses on assets.

Why historical comparisons need care

Liven Pharma’s recent history is structurally unusual. The listed company was formerly Landmark Spinning Industries Limited. Under a court-sanctioned scheme of arrangement, the business and operations of Liven Pharmaceuticals (Private) Limited were amalgamated into the listed entity in September 2024, the principal business changed from textile spinning to pharmaceuticals, and former Liven Pharmaceuticals shareholders received 87% of the issued shares in the merged entity.

That transition means multi-year comparisons can mix different operating structures and exceptional merger-era accounting effects. The Q3 FY26 versus Q3 FY25 comparison is more useful than older annual comparisons because both quarters sit after the scheme became effective, but even this period remains part of a relatively short post-merger operating history. The emphasis should therefore stay on current sales scale, gross economics, expense absorption and cash generation rather than extrapolating a long historical trend that the present corporate structure does not really have.

Sector context

Management describes the pharmaceutical sector as resilient, supported by sustained demand for essential healthcare products, while also highlighting regulatory pricing constraints, imported raw-material dependence, currency exposure and supply-chain risk. Importantly, management also states that no major macroeconomic development materially affected Liven’s overall performance during the quarter. That makes it inappropriate to explain the company’s result simply through the macro backdrop.

The broader industrial environment was not weak across the board: Pakistan Bureau of Statistics reported overall large-scale manufacturing growth of 6.48% year on year for July–March FY26 and 11.09% for March alone. This is not pharmaceutical-specific evidence, so it should be treated only as broad context.

A same-calendar-quarter pharmaceutical peer also points to sector resilience. Highnoon Laboratories reported Q1 2026 sales of Rs6.81 billion versus Rs6.55 billion a year earlier, gross margin of 56% versus 52%, and profit after tax of Rs956 million versus Rs916 million. Highnoon is far larger and has a different portfolio, so it is not a direct valuation or margin benchmark for Liven. It is useful only to show that sector conditions did not prevent established pharmaceutical manufacturers from growing during the period.

Post-period development: Tofflon MOU

After the March quarter, Liven disclosed a memorandum of understanding with China’s Tofflon Science and Technology Group covering potential cooperation in pharmaceutical and biotechnology manufacturing technology. The disclosure frames the MOU as part of Liven’s longer-term Vision 2030.

The key analytical point is what the disclosure does not say. The MOU is a framework for future cooperation; definitive agreements, investment decisions and capital commitments remain subject to technical evaluation, commercial negotiations, regulatory approvals, corporate approvals and execution of definitive agreements. It should therefore be monitored as a strategic option, not treated as an earnings contribution or committed project today.

What to monitor next

  • Whether quarterly revenue can remain near or above the Q3 level. A repeatable sales run-rate is necessary before the gross-margin improvement can translate into operating leverage.
  • Operating profit before non-core income and tax credits. The next result should ideally show gross profit covering administrative, selling and other recurring costs without relying on asset-disposal gains.
  • Obsolete inventory and expected-credit-loss charges. A reduction would strengthen earnings quality; further charges would suggest balance-sheet cleanup is still ongoing.
  • Cash conversion after the rights issue. The March balance sheet has ample cash relative to the prior year, but the business still used cash from operations.
  • Any definitive Tofflon agreements. Concrete project scope, financing, regulatory approvals, capacity plans and timelines would matter; the MOU by itself does not establish those outcomes.
  • No dividend was declared for the period. The next-cycle focus remains evidence of self-funded operating improvement rather than headline accounting profit.

AlphaGen model outputs

  • Alpha QoQ Score: 94
  • TTM Performance Score: N/A
  • 3Y Business Perf Score: 44.44
  • Sector Leadership Score: 48.2162

These four measures are AlphaGen model outputs, not company-reported figures. No other AlphaGen model, valuation, price, momentum or technical signal is used in this analysis.

Sources

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