Quality Chemical Industries Limited (Qcil) has reported its strongest financial performance since it was established in 2005, but warned that profitability could come under pressure from rising global competition, shifting procurement patterns, and higher input costs in the near term.
The outlook was presented at the company’s annual general meeting in Kampala on 30th June, where shareholders approved a higher dividend following a year of record earnings.
For the year ended March 2026, revenue rose 8.8 percent to Shs290.5 billion, from Shs267.1 billion a year earlier. Gross profit margin improved to 46.7 percent from 40.6 percent, supported by improved manufacturing efficiency, tighter control of raw material costs, and a stronger product mix.
Operating profit increased 24.2 percent to Shs73.8 billion, while profit after tax rose 38.8 percent to Shs56.4 billion. The company also reported a sharp improvement in cash generation, with operating cash flow more than doubling to Shs67.5 billion from Shs30.3 billion in FY25.
Management attributed the performance to higher earnings, improved working capital management, and the recovery of previously impaired receivables owed by the Government of Zambia.
Shareholders approved a final dividend of Shs6.4 per share, taking the total payout for the year to Shs16.6 per share, up 23 percent from Shs13.5 in the previous financial year.
However, the board cautioned that the strong payout should not be seen as a new normal, noting that the results were boosted by one-off gains, particularly the recovery of the Zambia receivable.
To support future growth, Qcil is expanding its manufacturing footprint in Uganda. Construction has begun on a new facility at the company’s Luzira plant, which is expected to double production capacity within the next 24 months and introduce new product lines, including injectable medicines. The project is being financed through a combination of internally generated funds and bank borrowing.
During the financial year, the company also completed what it describes as Africa’s only dedicated Hydroxyurea manufacturing plant, making it the continent’s sole producer of the treatment used for sickle cell disease. It further expanded its private market portfolio, launching 15 new products across therapeutic areas including antibiotics, antimalarials, antihypertensives, antidiabetics, antifungals, and allergy treatments.
The pharmaceutical manufacturer said it expects increasing competition, changing market conditions, supply chain disruptions, and fluctuations in the cost of active pharmaceutical ingredients to weigh on margins over the coming years.
Chief Executive Officer Ajay Kumar Pal told shareholders: “Our performance reflects the strength of our operating model. We are building a more efficient and diversified business, anchored in uncompromising quality and focused on the availability, affordability and accessibility of our medicines.”
Qcil Chairman and Co-founder Emmanuel Katongole said the investments reflect the company’s long-standing mission to develop local solutions to Africa’s healthcare needs.
“Qcil was founded on a simple conviction: that Africa’s health challenges deserve African solutions,” he said. “For over twenty years, that conviction has guided every decision we have made.”
Katongole added that the company had also introduced a paediatric antiretroviral medicine aimed at improving access to HIV treatment for children.
“FY26 was our strongest year yet, but what matters most is not what we earned; it is what we built, and who we built it for,” Katongole said. “We are just getting started.”
Despite the strong performance, management said the company’s strategy remains focused on improving operational efficiency, expanding its product portfolio, and increasing production capacity. It said the approach is intended to support sustainable growth as demand for locally manufactured medicines continues to rise across Africa, even as the operating environment becomes more competitive and cost pressures persist.
