List Of Best Pharma Stocks in India 2024

Have you ever thought about investing in the drug firms whose medications you buy when you’re ill? Normally, you would get yourself some medicines by going to the pharmacist. Have you ever wondered how pharmaceutical firms make money? What restrictions have the regulatory agencies put on them?

The top 5 pharmaceutical stocks in India and an overview of the pharmaceutical industry will be covered in today’s blog post.

Overview of the Pharma Industry

One of the most significant industries for any nation is the pharmaceutical industry. The main activities of the businesses in this sector are the development, production, and distribution of medical items for the healthcare sector. Some of the most well-known companies in the world that produce generic medications are based in India, and other nations use their products. 

The Indian pharmaceutical industry is valued at $65 billion and is expected to reach $130 billion by 2030. A CAGR of 10.70% presents an investment opportunity that can yield fantastic results in the future.

Top Pharma Stocks Based on Market Capitalisation

Here is a list of the top 5 Pharma Stocks for 2024:

The pharma stocks have been listed in descending order based on their market capitalization in the table below:

Best Pharma Stocks in India 2024 Based on Market Capitalization – An Overview

The best pharma stocks in India are given below, along with a brief overview:

1. Sun Pharmaceuticals Industries Ltd.

Founded in Gujrat in 1983, the company was first run by Dilip Shanghvi with just two employees and five psychiatry items. The business made calculated acquisitions between 1995 and 2010 to broaden its line of products and expand into new markets. After acquiring Ranbaxy Laboratories in 2014, the business grew to become the biggest pharmaceutical company in India. The company’s headquarters is located in Mumbai. 

2. Divis Laboratories Ltd.

Dr. Murali Divi established Divi’s Laboratories Ltd. in 1990. Originally called Neuland Laboratories, the business focused on creating APIs (Active Pharmaceutical Ingredients) and intermediates. In 1995, the company opened its first manufacturing facility in Hyderabad, and in 1997, it opened its second in Visakhapatnam. In 2002, the company went public on a stock exchange. With a robust distribution network, Divi’s Lab exports its goods to more than 100 countries. The company’s headquarters is located in Hyderabad. 

3. Zydus Life Sciences Limited

Indravadan Modi and Ramanbhai Patel established the business in 1952, which was then known as Cadila Laboratories. The business was split into Cadila Pharmaceuticals Ltd. and Cadila Healthcare between the two founders in 1995. Cadila Healthcare Ltd. was later renamed Zydus Lifesciences Limited. The first company to introduce anti-anxiety medication in India was Zydus Life Sciences Limited. With production facilities in Brazil, the US, and India, the corporation is active in 25 nations. The company’s main office is located in Ahmedabad, Gujarat. The organization is giving jobs to more than 25,000 people.  

4. Cipla Limited

Khwaja Abdul Hamied established Cipla in 1935; at first, it was known as “Chemical, Industrial & Pharmaceutical Laboratories.” In 1952, it created its first section dedicated to research and development. The business changed its name to Cipla in 1984. Their contribution during the COVID-19 pandemic was significant as they supplied the antiviral medication Favipiravir. The corporation operates in more than 80 countries worldwide and offers more than 1500 products. The company’s headquarters is located in Mumbai. 

5. Dr Reddy’s Lab Limited

Kallam Anji Reddy established the business in 1984, and its primary activities were the development and production of active pharmaceutical ingredients (APIs). The company itself was listed on the India Stock Exchange in 1994 and the New York Stock Exchange in 2001. The company collaborated with the Russian Direct Investment Fund (RDIF) to conduct clinical trials of the Sputnik V COVID-19 vaccine during the COVID-19 pandemic. The corporation employs more than 24,000 people worldwide, with its headquarters located in Hyderabad.  

Top Pharma Stocks Based on 1-Year Return

The Top Pharma Stocks in 2024 are:

The pharma stocks have been listed in descending order based on their 1-year return in the table below:

Best Pharma Stocks in India 2024 Based on 1-Year Return – An Overview

The best pharma stocks according to 1-year returns are given below:

1. Wanbury Ltd.

When the company was first established in 1990, its primary focus was on the production of APIs. To diversify its product offering, Wanbury undertook several strategic acquisitions, including Doctor Organic Chemical Limited in 2005. The business offers a wide range of APIs that are used to treat inflammatory and diabetic disorders. The company’s headquarters is located in Mumbai. 

2. Wockhardt Ltd.

Dr. Habil Khorakiwala established Wockhardt Ltd. in 1970, and the company began selling its goods to various nations in the Middle East, Southern Asia, and Africa in the mid-1980s. In 1990, the company became public and was listed on the Indian Stock Exchange. The business bought several foreign pharmaceutical manufacturing firms in the early 2000s, including Morton Grove Pharmaceuticals in the USA and CP Pharmaceutical in the UK. The company’s main office is located in Mumbai. 

3. Neuland Laboratories Ltd.

Dr. D. R. Mohan Rao incorporated the corporation in 1984. The company’s primary goal is to produce APIs for the pharmaceutical industry. The company expanded its operations to the USA in 2004 and Japan in 2007. The business makes R&D investments to improve API quality. The company provides a healthier environment by collaborating with over 500 biotech and pharma companies. The company’s headquarters is located in Hyderabad. 

4. SMS Pharmaceuticals Ltd.

Mr Rami Reddy started the business, which specializes in API manufacture. It started as a small-scale manufacturing facility. The company debuted on the Indian Stock Exchange in 2007. The company exports its goods to about 70 countries worldwide, and to increase its market share, it strategically partners with numerous other foreign businesses. Hyderabad is home to the company’s headquarters. 

5. Orchid Pharma Ltd.

The company was incorporated by K. Raghavendra Rao in 1992. The company’s initial focus is on producing pharmaceuticals and APIs. The company expanded its operations in Canadian and Australian markets in 2008 and 2009, respectively. The company employs more than 4,000 employees. The company has its headquarters in Chennai. 

Key Performance Indicators

The Benefit of Investing in Pharma Stocks

There are numerous benefits of investing in Pharma Stocks, a few of which are mentioned below:

• Stability – The growing need for medical supplies and equipment has made the pharmaceutical industry a defensive industry. Consequently, making investments in this industry generates consistent returns. 
• Global Exposure – Because the businesses in this industry sell their goods all over the world, these companies have multiple sources of revenue. 
• Profit Margins – Pharma businesses typically have larger profit margins due to their heavy investment in R&D and patents. 
• Diversification – You will get diversification and lower overall market risk if you allocate a portion of your portfolio to the pharmaceutical industry. 

Factors to be Consider Before Investing in Pharma Stocks

There are various factors one should consider before investing in pharma stocks. Some of them are:

• Regulations – The government has established several strict guidelines about the approval of medications. In addition, the US FDA continuously inspects Indian pharmaceutical products. 
• Competition – The increased level of competition may have an impact on the company’s profit margins and pricing.
• Patents – The company’s revenue may be impacted if its patents expire. Therefore, one should take the company’s patents into account before investing. 
• Product Portfolio – The number of products in the company’s portfolio also has a significant impact on the company’s performance. 

Future of Pharma Industry in India

The demand for medical products is increasing day by day because of deteriorating health conditions. In terms of the production of medicine, India ranked 3rd globally, and in terms of value, it is ranked 10th, and the industry has a 5.71% share in the global market. The future of the Indian pharma sector seems very promising, as it is expected to be a $130 billion industry by 2030.

Conclusion

Companies in the healthcare industry play a crucial role since they prioritize drug development and research while paving the way for a healthier and brighter future for all. The healthcare market is always changing. Apart from operating challenges, oversight from many regulatory bodies, such as the US FDA, may function as a roadblock to their effectiveness.

The industry is in a strong financial position and is expanding. However, you should consult a financial advisor before investing.  

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