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All About the pharma sector
- The Pharma sector is considered to be one of the favorite sectors to invest in in the Indian Stock Market.
- The Nifty Pharma Index is the index of the Pharma Sector, which is the index of the top 20 Pharma companies listed in the Indian Stock Market.
- The Nifty Pharma Index gave a 37% CAGR return in the last 5 years, a 133% CAGR return in the last 10 years, and an-all time return of 187%. This is the reason why people are getting attracted to Pharma Stocks.
- Indian Pharma companies maintained a good standing not only in India but, also in the global pharmaceutical industry. They managed to consistently be the leader in the manufacturing of generic drugs, both domestically and globally. Drugs manufactured in India have reached multiple developed countries like the USA, the UK, and the EU.
Advantages of Pharma Companies and Stocks:
Now, let’s discuss the advantages that Indian Pharma Companies have.
Market Size
India is a diverse country as well as 2nd highest populated country in the world with over more than 140 CR. population. India transports huge amounts of drugs to the countries like the USA, UK, and EU.
So the market size for Pharmaceutical Companies is huge. There is a huge potential to develop and grow because of the new technologies that are coming. And Pharma Companies are also adopting new technologies and doing better day by day.
Reasonable Cost
As we discussed earlier, India is one of the leaders in the manufacturing of generic drugs. And we all know that manufacturing in huge amounts can lead to making that product at an affordable price because the cost per item decreases.
Furthermore, labor costs, employee costs, advertising and marketing costs, land costs, and so on are very low in comparison to other developed countries such as the United States, the United Kingdom, and others. That’s why they are able to provide affordable generic drugs at an affordable price.
Growing industry
India is a growing country. The scope of growth of any company or sector in India is huge for various reasons like market size, increase in earning and spending power, etc. According to predictions, the Indian Pharma industry is expected to grow to $130 billion by 2030.
There will be a variety of illnesses and health issues. And it’s not going anywhere. The new young people are now more focused on eating packaged, refined, unhealthy, and fast foods, which leads to various diseases and health problems. So there’s no doubt about the growth of this industry.
Here are the Best Pharma Stocks to Buy in India
Cipla Ltd.
Cipla Ltd. was founded in Mumbai and has been running since 1935. Cipla Ltd. provides generic medicines to treat various illnesses, including diabetes, respiratory illnesses, and weight management and has many more to offer.
Cipla Ltd. is also the world’s biggest producer of antiretroviral medicines. Because of the high-quality products, the company has gained a lot of reputation in the Indian and international markets. Cipla now has a massive product portfolio with more than 1,500 items in the market and Cipla Ltd. is a zero-debt company.
| Market Capitalisation: ₹ 91,231.53 Cr. |
| P/E Ratio: 34.64 |
| P/B Ratio: 3.95 |
| Sector PE: 35.81 |
| Sector PB: 4.37 |
| EPS: ₹ 32.63 |
| Dividend Yield: 0.45% |
| Sales Growth: 15.83% |
| Profit Growth: 31.53% |
| Promotor’s Holding: 33.61% |
| ROE: 12.70% |
| ROCE: 16.84% |
| Cash: ₹ 1,428.03 Cr. |
| Debt: ₹ 0 Cr. |
| Debt/Equity Ratio: 0 |
Dr. Reddy’s Laboratories Ltd.
Dr. Reddy’s Laboratories Ltd. has been in the generic business in India since 1984. Today, this company is a trusted name in the healthcare industry. Which serves the needs of millions of patients with high-quality, affordable, and innovative medicines across India.
Dr. Reddy’s Laboratories Ltd. creates and markets 60 active pharmaceutical components (API) for drug generic medicines, drug companies, diagnostic tools, over-the-counter medicines, and biotechnology goods in India and other countries.
| Market Capitalisation: ₹ 72,870.08 Cr. |
| P/E Ratio: 42.63 |
| P/B Ratio: 3.9 |
| Sector PE: 35.81 |
| Sector PB: 4.37 |
| EPS: ₹ 102.66 |
| Dividend Yield: 0.69% |
| Sales Growth: 7.91% |
| Profit Growth: -25.76% |
| Promotor’s Holding: 26.71% |
| ROE: 9.26% |
| ROCE: 11.68% |
| Cash: ₹ 2,030.50 Cr. |
| Debt: ₹ 2,205.40 Cr. |
| Debt/Equity Ratio: 0.12 |
Abbott India Ltd.
Abbott India Ltd. is the oldest and biggest international pharmaceutical company in India. Abbott is a subsidiary of Abbott Laboratories in the US. Its corporate headquarter was founded in 1944 in Mumbai, Maharashtra.
The company provides high-quality dependable goods and has expertise in product research, production, sales, and customer service. Also provides medications and therapies, including vitamins, urology, thyroid, anti-infectives, diabetology, women’s health, and many more. Abbott produces 400 branded generic drugs all around the world. The company has 0 debt and Earnings Per Share (EPS) is ₹ 380.52.
| Market Capitalisation: ₹ 40,492.67 Cr. |
| P/E Ratio: 50.08 |
| P/B Ratio: 13.58 |
| Sector PE: 35.81 |
| Sector PB: 4.37 |
| EPS: ₹ 380.52 |
| Dividend Yield: 1.44% |
| Sales Growth: 14.14% |
| Profit Growth: 15.64% |
| Promotor’s Holding: 74.99% |
| ROE: 29.95% |
| ROCE: 40.53% |
| Cash: ₹ 2,749.22 Cr. |
| Debt: ₹ 0 Cr. |
| Debt/Equity Ratio: 0.12 |
Sun Pharmaceutical Industries Ltd.
Sun Pharmaceutical started small in 1983 but now market capitalization of ₹ 2,29,172.48 Cr. Sun Pharmaceutical Industries Ltd. is India’s largest pharmaceutical firm. Also, Sun Pharmaceutical Industries Ltd. ranks 4th internationally for generic drugs.
The company is in the business of manufacturing, developing, and marketing a range of generic medicines. The company produces liposomal medicines, lyophilized injections, inhalers, sprays, and other governed dosage forms. Sun Pharmaceutical Industries invests up to 7-8% of its global revenue in research and development (R&D). Due to this huge investment in R&D, the company is able to grow its business not only in India but also globally.
| Market Capitalisation: ₹ 2,29,172.48 Cr. |
| P/E Ratio: 218.24 |
| P/B Ratio: 8.95 |
| Sector PE: 35.81 |
| Sector PB: 4.37 |
| EPS: ₹ 4.38 |
| Dividend Yield: 1.05% |
| Sales Growth: 10.41% |
| Profit Growth: -111.87% |
| Promotor’s Holding: 54.48% |
| ROE: -0.39% |
| ROCE: 2.19% |
| Cash: ₹ 534.96 Cr. |
| Debt: ₹ 4,868.71 Cr. |
| Debt/Equity Ratio: 0.20 |
Divi’s Laboratories Ltd.
Divi’s Laboratories Ltd. was founded in 1990 in Hyderabad, Telangana. Devi’s Laboratories has three research and development facilities (R&D) in India. The company also has three manufacturing facilities in Hyderabad, Vishakapatnam, and Kakinada.
Devi’s Laboratories with a market capitalization of ₹ 99,172.42 Cr. is the 2nd largest pharmaceutical firm in India. The company dominates the market for the manufacturing and selling of nine generic Active Pharmaceutical Ingredients (APIs) on a global scale. Devi’s Laboratories Ltd. Is a zero-debt company with a profit growth of 50.84%.
| Market Capitalisation: ₹ 99,172.42 Cr. |
| P/E Ratio: 32.11 |
| P/B Ratio: 8.01 |
| Sector PE: 35.81 |
| Sector PB: 4.37 |
| EPS: ₹ 116.33 |
| Dividend Yield: 0.8% |
| Sales Growth: 30.61% |
| Profit Growth: 50.84% |
| Promotor’s Holding: 51.94% |
| ROE: 28.13% |
| ROCE: 35.09% |
| Cash: ₹ 2,803.68 Cr. |
| Debt: ₹ 0 Cr. |
| Debt/Equity Ratio: 0 |
Conclusion
So these are the Best pharma stocks to buy in India in 2023. You can consider these stocks in your portfolio for the long term. Maybe it’s your first Pharma investment but these are good stocks to put your money in.
Note: The above stocks are just recommendations. So, always do thorough research or consult your financial advisor before investing. Then invest according to your risk profile and goal.