Liven Pharma Limited (LIVEN) reported a challenging first quarter for fiscal year 2026, ending September 30, 2025, with a significant shift from profitability to a substantial loss. The company experienced a dramatic decline in revenue, raising immediate questions for investors about the underlying operational health and future outlook, especially against a backdrop of a generally resilient pharmaceutical sector.
Financial Performance: A Steep Decline
The most striking aspect of LIVEN's Q1 FY26 results is the precipitous drop in revenue. The company recorded sales of just Rs. 8.82 million, a staggering over 90% decrease compared to Rs. 88.91 million in the same period last year. This sharp decline directly led to a significant operating loss of Rs. 31.75 million, a stark reversal from an operating profit of Rs. 20.13 million in Q1 FY25.
Despite the massive revenue contraction, LIVEN's gross profit margin actually improved to approximately 44.5% (Rs. 3.93 million gross profit on Rs. 8.82 million revenue) from about 27.9% in the prior year. However, this positive development was severely overshadowed by elevated administrative, selling, and other operating expenses, which totaled Rs. 35.04 million for the quarter. After accounting for finance costs and taxation, the company posted a net loss after tax of Rs. 30.16 million, a dramatic swing from a net profit of Rs. 147.59 million in the corresponding period last year.
Consequently, LIVEN reported a loss per share (basic and diluted) of Rs. 0.32 for the quarter, a sharp contrast to the earnings per share of Rs. 12.17 (basic) and Rs. 1.59 (diluted) in Q1 FY25. On the balance sheet, total equity decreased from Rs. 633.86 million at June 30, 2025, to Rs. 603.70 million at September 30, 2025, primarily due to the accumulated loss. Current liabilities saw an increase from Rs. 90.43 million to Rs. 105.08 million, driven largely by a rise in trade and other payables.
Cash flow from operations remained negative, with a net cash outflow of Rs. 5.80 million. While financing activities generated Rs. 3.20 million, the overall cash and cash equivalents decreased by Rs. 2.82 million during the quarter.
Unanswered Questions Amidst Sector Resilience
While Liven Pharma's core activity remains the manufacturing and sale of pharmaceutical products, its Q1 performance sharply contradicts the broader industry trend. The Director's Report highlighted a 'broadly stable' macroeconomic environment and a 'resilient' pharmaceutical sector in Pakistan, supported by sustained demand for essential healthcare products. This makes LIVEN's dramatic revenue decline particularly unexpected and concerning, as the report does not explicitly detail the specific reasons for this sharp contraction in the company's own sales, leaving investors with critical unanswered questions.
The industry continues to face challenges such as regulatory pricing controls, dependence on imported raw materials, currency fluctuations, and supply chain constraints. While these are sector-wide issues, LIVEN's Q1 performance suggests a more acute internal or specific market challenge that is not fully elaborated in the report, indicating potential company-specific vulnerabilities.
Strategic Moves: Capital Injection and Going Concern
In a significant corporate action, the Board of Directors approved an increase in the authorized share capital from Rs. 1 billion to Rs. 1.2 billion in July 2025, subsequently approved by shareholders in August 2025. Furthermore, in September 2025, the Board approved the issuance of 20 million ordinary shares as Right Shares at par (Rs. 10/- each) to existing shareholders, in a proportion of approximately 21.496 right shares for every 100 shares held. This move will increase the company's paid-up share capital and likely aims to inject fresh capital into the business, potentially to address working capital needs amidst the losses.
The company also secured an interest-free loan of Rs. 4 million from its CEO, Mr. Kashif Hussain Siddique, for working capital requirements, increasing the total loan from related parties to Rs. 18.05 million. No dividend was declared for the period under review. Despite the substantial losses, the report states there is 'no significant doubt regarding the Company's ability to continue as a going concern,' with management focusing on operational efficiency, cost management, and sustainable growth.
Investor Outlook: Navigating Uncertainty
LIVEN's Q1 FY26 results present a challenging picture for investors. The dramatic over 90% revenue collapse is the primary concern, as it directly led to the significant net loss. While the pharmaceutical sector is described as resilient, LIVEN's performance suggests company-specific headwinds that are not clearly articulated in the report. Investors will be looking for a detailed explanation from management regarding the reasons behind this severe revenue decline.
The upcoming Right Shares issue, while a source of capital, also signals a need for funding and will lead to dilution for existing shareholders who do not participate. Rational investors should closely monitor the subscription of the right issue, future revenue trends, and any clarity from management on their strategy to reverse the current operational trajectory. The ability to return to profitable growth and effectively manage costs will be crucial for LIVEN's stock performance going forward.