Nigeria’s Pharma Stocks Surge: Fidson and May & Baker Lead Market Rally Amid Growing Healthcare Demand

Nigeria’s pharmaceutical sector has emerged as a standout performer on the stock market in 2025, with Fidson and May & Baker posting year-to-date gains of 117 percent and 86.2 percent respectively, as of September 16. Investors are increasingly turning to healthcare stocks as a stable growth avenue, even as the broader market grapples with inflation, currency volatility, and uneven corporate earnings.

The rally in pharma shares contrasts sharply with other sectors facing economic headwinds. Industrial and real estate companies, along with select consumer goods firms, continue to wrestle with rising input costs and foreign exchange fluctuations, creating a widening performance gap. In this environment, healthcare companies are seen as safer bets, supported by strong domestic demand and resilient earnings.

Fidson and May & Baker’s impressive gains are underpinned by robust first-half 2025 results. Fidson’s after-tax profit nearly quadrupled to N6.02 billion, while May & Baker’s profit jumped 150 percent to N876.6 million. Revenue growth, operational efficiency, and lower foreign exchange losses helped maintain healthy profit margins despite inflationary pressures.

However, the numbers mask underlying challenges. Both companies reported negative operating cash flows due to higher trade receivables and prepayments, and debt levels have risen—Fidson doubled its borrowings, while May & Baker’s debt climbed 28 percent. Rising finance costs, including a 77 percent increase for May & Baker, highlight the financial leverage accompanying the growth, a key factor investors will be monitoring closely.

Despite these pressures, market confidence remains strong. Government incentives for local manufacturing, coupled with strategic expansions in product lines and distribution by Fidson and May & Baker, have strengthened the sector’s growth outlook. With domestic production scaling up and healthcare consumption rising, Nigeria’s pharmaceutical sector is poised to remain a bright spot for investors, demonstrating how operational discipline and strategic positioning can drive value even amid macroeconomic uncertainty.

source: business day