Health plays a vital role in human life, shaping our daily experiences. As we face various health challenges, the pharmaceutical industry is emerging as a key player, providing essential solutions. From innovative treatments to life-saving drugs, this industry is continuously driving progress in healthcare. In this article, we’re exploring the best pharma stocks in India that are succeeding, offering insights for those looking to invest in a healthier future.
Industry Overview Of Pharmaceuticals
India plays a crucial role in the global pharmaceutical landscape, known as the “pharmacy of the world.” With the largest share of generic drugs and vaccines, it meets over 50% of global vaccine demand, 40% of generic needs in the US, and 25% of all medicine in the UK. India’s low-cost, high-quality medicines have solidified its position as a key player in the international market.
India is third in pharmaceutical production by volume globally and 14th in value. The Indian pharmaceutical industry is booming, with a CAGR of 9.43% over the last nine years. India is dominating the generic drug market and exporting to major markets like the US and the UK. India continues to attract significant foreign investment, solidifying its position in the global pharmaceutical landscape.
Future Outlook Of Pharmaceutical Industry
The Indian pharmaceutical industry is experiencing robust growth, with significant foreign investment and a strong domestic market. The Indian pharmaceutical industry’s total market size is expected to reach US$130 billion by 2030 and US$450 billion by 2047. The government has supported a Rs. 1000 crore allocation for bulk drug parks in the Interim Budget 2024–25, which is a positive outlook for the industry. The hospital market is also expanding rapidly, projected to reach US$ 193.59 billion, which is growing at a CAGR of 8% by FY32.
Exports Of Pharmaceutical Products
India’s pharmaceutical industry exports reached approximately $27.82 billion in FY24, reflecting a year-on-year growth of 9.7%. India is the 12th-largest exporter of medical goods in the world. The sector is actively expanding its global footprint, supplying drugs to over 200 countries, including major markets like the USA and Europe. Approximately 114 countries worldwide received 400 million tablets, or 45 tons, of hydroxychloroquine from India. India is also dominating the generic drug market, accounting for 20% of global exports by volume.
List Of Best Pharma stocks in India 2024
Cipla
Cipla was founded by Khwaja Abdul Hamiedin in 1935. It is a leading Indian multinational pharmaceutical company, based in Mumbai. It’s known for its respiratory, HIV/AIDS, and oncology products. Cipla has a strong presence in India, South Africa, and North America. The company is a pioneer in inhaler technology, has a market share of 70%, and has a significant market share of 25% in respiratory therapy. Cipla has a workforce of over 27,000 employees across 17 countries and six continents.
Cipla Limited is India’s largest trade generic business. It has more than 5500 stockiest networks. The company’s revenue grew from ₹22,753 crore in FY23 to ₹25,774 crore in FY24, which has grown by 13.28%. Its net profit increased substantially from ₹2,835.49 crore to ₹4,155.31 crore in FY24. The company’s revenue is mainly from India (43%), North America (30%), SAGA (12%), emerging markets and Europe (12%), and API (2%). Cipla is investing heavily in research and development to drive innovation, which accounts for 5–6% of sales.
Future Outlook: Cipla is expanding its presence in developed markets like the US and Europe in FY25. It’s focusing on complex generics and biosimilars. The company is also investing in digital health solutions. Cipla is expanding its manufacturing capabilities with a new facility in South Africa. The company is investing in innovative drug delivery systems for respiratory products.
Cipla is planning to invest INR 1,500 to 1,800 crore in Capex over the next 2–3 years. The company is expanding its medical representative base from 8,500 to 10,000 to drive growth in the domestic market. Cipla’s partnership with Eli Lilly for diabetes products is expected to boost its chronic care portfolio. These initiatives and collaborations will drive Cipla’s growth in the coming years.
Key Financial Metrics of Cipla Limited:
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 1574.65 | Market Cap (Cr.) | 126345 |
| EPS (TTM) | 55.04 | Stock P/E (TTM) | 28.43 |
| ROE (TTM) | 15.43% | Debt to Equity | 0.02 |
| Promoter Holding (%) | 30.91% | FII Holding (%) | 27.81% |
| Operating Profit Margin | 23.22% | Net Profit Margin | 16.12% |
| Revenue CAGR (5 Years) | 9.51% | Net Profitc CAGR (5 Years) | 22.44% |
Dr. Reddys Laboratories
Dr. Reddys Laboratories is a multinational pharmaceutical company based in Hyderabad, India. The company was founded by Anji Reddy in 1984. It specializes in generic drugs, APIs, and biosimilars. The company has a strong presence in India, the US, Russia, and the CIS countries. Dr. Reddy’s key therapeutic areas include gastrointestinal, cardiovascular, pain management, and oncology. The company has over 26,000 employees worldwide. Dr. Reddy’s Laboratories operates across 76 countries.
Dr. Reddy’s Laboratories’ revenue increased from ₹24,669 crore in 2023 to ₹28,011 crore in 2024, which has increased by 13.55%. However, its net profit improved from ₹4,507.35 crore in FY23 to ₹5,577.9 crore in FY24. Dr. Reddy’s Laboratories Limited is focusing on expanding its product portfolio and global presence. The company is continuously investing in R&D, which accounts for 8.5% to 9% of the sales
Future outlook: Dr. Reddy’s focus is on four key areas, such as B2B generics, branded generics/innovation, consumer healthcare, and biologics. The company is planning to invest around $2.5 billion in inorganic growth opportunities. It’s expanding its presence in emerging markets. Dr. Reddy’s is expanding its biologics manufacturing capabilities with a new facility in Hyderabad.
The company is investing in the Bachupally facility to increase capacity from 15 KL to 50 KL over the next 2 years. Dr. Reddy’s recent acquisition of Mayne Pharma’s US portfolio strengthens its position in the US market. The company also acquired Nicotinell and related NRT brands. Dr. Reddy’s is also investing in AI and machine learning for drug discovery. These strategies and investments are expected to drive long-term growth for Dr. Reddy’s Laboratories Limited.
Key Financial Metrics of Dr. Reddy’s Laboratories Limited:
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 6797.3 | Market Cap (Cr.) | 113474 |
| EPS (TTM) | 333.59 | Stock P/E (TTM) | 20.39 |
| ROE (TTM) | 19.74% | Debt to Equity | 0.07 |
| Promoter Holding (%) | 26.65% | FII Holding (%) | 42.27% |
| Operating Profit Margin | 26.26% | Net Profit Margin | 19.86% |
| Revenue CAGR (5 Years) | 12.64% | Net Profitc CAGR (5 Years) | 23.39% |
Abbott India
Abbott India is a subsidiary of the global healthcare company Abbott, headquartered in Mumbai. It focuses on pharmaceuticals, nutrition, and diagnostics. The company has a strong presence in India’s domestic market. Abbott India specializes in gastroenterology, women’s health, metabolic disorders, and pain management.
The company has over 3,850 employees in India. Abbott India’s revenue grew from ₹5,348.73 crore in 2023 to ₹5,848.91 crore in 2024, which has grown by 9.35%. The net profit of the company increased by 26.22%, from ₹949.41 crore in FY23 to ₹1,201.22 crore in FY24.
Future outlook: Abbott India is expanding its nutrition and diagnostics portfolio. It’s investing in digital health solutions and telemedicine. The company is also focusing on increasing its rural market penetration. Abbott India is launching new products in the nutrition segment, targeting specific health needs. The company is expanding its diagnostic capabilities with new test kits and platforms and has launched eight new products in FY23. Abbott India’s focus on chronic disease management is expected to drive growth in its pharmaceuticals segment.
Key Financial Metrics of Abbott India Limited:
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 27874 | Market Cap (Cr.) | 57491 |
| EPS (TTM) | 583.05 | Stock P/E (TTM) | 46.4 |
| ROE (TTM) | 32.48% | Debt to Equity | 0.02 |
| Promoter Holding (%) | 74.99% | FII Holding (%) | 0.18% |
| Operating Profit Margin | 27.87% | Net Profit Margin | 20.53% |
| Revenue CAGR (5 Years) | 9..72% | Net Profitc CAGR (5 Years) | 21.69% |
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Sun Pharmaceutical Industries
Sun Pharmaceutical Industries is India’s largest pharmaceutical company, based in Mumbai. It is also the 13th largest in the US generics market. It specializes in generic and branded drugs, with a strong focus on chronic therapies. The company operates in over 100 countries, with a significant presence in India, the US, and emerging markets.
Sun Pharma has 41 manufacturing facilities in all segments. Sun Pharma’s key therapeutic areas include cardiology, psychiatry, neurology, gastroenterology, and diabetology. The company employs over 43,000 people globally.
Sun Pharma’s revenue decreased from ₹20,812 crore in 2023 to ₹20,275 crore in 2024. Its net profit rose significantly from ₹1,690.72 crore in FY23 to ₹2,858.18 crore in FY24, which grew by 69.05%. The revenue of the company mainly comes from India-branded (31%), the US (32%), emerging markets (18%), API and others (5%), and the rest of the world (14%). The company is expanding its presence in global markets and investing 6.7% of sales in research and development in FY24.
Future outlook: Sun Pharma is focusing on specialty products and complex generics. It’s expanding its biosimilar portfolio and entering new therapeutic areas. The company is also strengthening its position in emerging markets. Sun Pharma is investing in a new manufacturing facility in Madhya Pradesh, India. The company is also expanding its research capabilities in areas like novel drug delivery systems. Sun Pharma’s recent acquisition of Concert Pharmaceuticals enhances its dermatology portfolio.
Key Financial Metrics of Sun Pharmaceutical Industries Limited:
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 1734.4 | Market Cap (Cr.) | 417844 |
| EPS (TTM) | 11.6 | Stock P/E (TTM) | 150.13 |
| ROE (TTM) | 12.06% | Debt to Equity | 0.47 |
| Promoter Holding (%) | 54.48% | FII Holding (%) | 17.23% |
| Operating Profit Margin | 24.37% | Net Profit Margin | 19.89% |
| Revenue CAGR (5 Years) | 14.50% | Net Profitc CAGR (5 Years) | 28.46% |
Alkem Laboratories
Alkem Laboratories is an Indian pharmaceutical company based in Mumbai. It was founded by Samprada Singh in 1973. The company specializes in generic drugs and APIs, with a strong focus on acute therapies. Alkem has a dominant presence in India’s domestic market and is expanding in international markets, particularly the US. The company’s key therapeutic areas include anti-infectives, gastro-intestinal, and pain management.
Alkem Laboratories Limited’s revenue increased from ₹11,599 crore in FY23 to ₹12,667 crore in FY24, which has grown by 9.21%. The net profit of the company rose by 79.92%, from ₹1,006.81 crore to ₹1,811.46 crore in FY24. 11.489. Alkem is known for its strong presence in the domestic market. The sales of the company in India have increased by 5.4% YOY and in the US increased by 10.2% YOY.
Future outlook: Alkem is focusing on expanding its international presence, especially in the US market, emerging markets, and some European countries. It’s investing in research and development for complex generics. The company is also strengthening its chronic therapy portfolio. Alkem is expanding its manufacturing capabilities with a new facility in the US. The company is investing in biosimilars and specialty products to diversify its portfolio. Alkem is investing around INR 400–450 crores in their US facility for contract development and manufacturing organization (CDMO) business. The company’s recent partnerships for in-licensing products are expected to boost its offerings in India. It helps with the future growth of Alkem Laboratories Limited.
Key Financial Metrics of Alkem Laboratories Limited:
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 5660 | Market Cap (Cr.) | 67942 |
| EPS (TTM) | 179.8 | Stock P/E (TTM) | 31.6 |
| ROE (TTM) | 17.41% | Debt to Equity | 0.15 |
| Promoter Holding (%) | 56.38% | FII Holding (%) | 8.69% |
| Operating Profit Margin | 17.81% | Net Profit Margin | 14.29% |
| Revenue CAGR (5 Years) | 11.48% | Net Profitc CAGR (5 Years) | 18.53% |
Other Stocks in the Pharmaceutical Industry in India
| Company Name | CMP | Market Cap | P/E Ratio |
|---|---|---|---|
| Divi’s Laboratories Ltd | 4632.15 | 122969.01 | 73.42 |
| Zydus Lifesciences Ltd | 1182.00 | 118936.86 | 28.55 |
| Torrent Pharmaceuticals Ltd | 3303.20 | 111790.26 | 66.80 |
| Lupin Ltd | 2094.25 | 95501.17 | 42.18 |
| Mankind Pharma Ltd | 2285.00 | 91545.15 | 48.90 |
| Aurobindo Pharma Ltd | 1492.20 | 87433.74 | 24.43 |
Conclusion
In conclusion, the pharma stocks were proving to be safe investments, offering stability and growth potential in uncertain times. Pharma stocks are called defensive stocks. They were providing a hedge against market volatility. India’s pharmaceutical industry was flourishing, with companies expanding globally and investing in research and development. The pharma sector was benefiting from increased healthcare needs and government support.
Indian pharmaceutical companies like Cipla, Dr. Reddy’s, Abbott India, Alkem Laboratories, and Sun Pharma were emerging as top choices based on their strong financials, diverse portfolios, and strategic initiatives. The future looked promising for Indian pharma companies as they continued to innovate and capture market share worldwide. What do you think about the Indian pharmaceutical industry? Let us know in the comments below.
Written By Nikhil Naik
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