Top Pharma Stocks to Invest
Indian pharma stocks have performed exceptionally well over the last year. Data shows that the Nifty Pharma Index has surged 58% in the 12 months, outperforming the Nifty 50. The Indian pharma market, valued at USD 49 billion in 2022, is expected to reach USD 450 billion by 2047 and clock a CAGR of 9% in the coming years.
With the pharma industry poised for significant growth in the coming year, adding pharma stocks to your portfolio can help create wealth for you in the long run.
What are pharma stocks?
Pharma stocks refer to stocks of companies within the pharmaceutical industry that are engaged in the research, development, manufacturing, and marketing of medicines for treating various medical conditions. These stocks can include stocks of large and established pharmaceutical firms, biotech companies, and generic drug manufacturers.
List and overview of top pharma stocks
| Stock’s Name | 3-year Trailing Returns (As of 8th July 2024) | Overview |
|---|---|---|
Aster DM Healthcare Ltd | 17.10% | Aster DM Healthcare Ltd is a prominent healthcare services provider. Over the years, it has grown into a network of hospitals and clinics delivering comprehensive medical services across its markets. |
Cipla Ltd | 17.86% | An Indian multinational pharma company, Cipla Ltd has carved out a niche with its innovative products and commitment to affordable healthcare. Its dedication to quality has made it a trusted name in the pharma industry. |
Sun Pharmaceuticals Industries Ltd | 18.67% | Founded in 1983 by Dilip Shanghvi, Sun Pharma has grown into a global leader in the pharmaceutical sector, with a significant presence in over 100 countries. It is recognised for its robust R&D capabilities and strategic acquisitions. |
Torrent Pharmaceuticals Ltd | 46.36% | Founded in 1959, Torrent has established a significant presence in India and internationally, particularly in regulated markets like the US and Europe. |
Source: Kotak Securities
How to identify best-performing pharma stocks?
Keep in mind the following things for identifying the best-performing pharma stocks:
-
Fundamental analysis
Carry out the company's fundamental analysis. Look at the company's earnings growth, profit margins, and debt levels, among other factors, to identify profitable firms.
-
Analyse the stock's historical performance
Check the stock's historical performance. Look at past trends and check how the stock has responded to market volatility. It is prudent to opt for stocks with consistent growth.
-
Keep an eye on industry trends
Industry trends, including global healthcare dynamics, can significantly impact pharma stocks. To make intelligent decisions, keep an eye on these trends and check how your chosen stock responds to them.
Factors to consider while investing in pharma stocks
Apart from the above factors, you should look at these things before investing in pharma stocks:
-
Global and domestic demand
Analyse domestic and global demand to determine whether the stock is poised for growth in the coming days. Various domestic and global factors and trends, such as the prevalence of diseases and healthcare spending, influence pharma stocks.
-
Government policies
The pharma industry is tightly regulated, and government policies can impact a company's ability to launch new products. Stay updated on regulatory changes and policies to learn potential challenges that a company may face.
-
Competitive landscape
The pharma industry is competitive. Evaluating a company's competitive landscape can provide insights into its long-term growth potential.
Industry Overview
The Indian pharmaceutical industry currently occupies the third rank in pharmaceutical production by volume, and India has the highest number of pharmaceutical manufacturing facilities complying with the US Food and Drug Administration (USFDA). The industry supplies over of the global demand for various vaccines and enjoys an important position in the global pharmaceutical sector. It contributes around 1.72% of the country's GDP.
Several government initiatives such as increasing the number of Pradhan Mantri Bhartiya Jan Aushadi Kendras and approving of the National Medical Devices Policy, 2023, among others is expected to bolster the industry in the coming days.
Invest in promising pharma stocks with Health is Wealth Basket
Investing in top-rated pharma stocks has become easier with Health is Wealth Basket. Stocks curated by Kotak Securities research analysts, this basket allows you to invest in pharma stocks hassle-free. Click here to know more.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed SEBI’s prescribed limit. The securities are quoted as an example and not as a recommendation. SEBI Registration No-INZ000200137 Member Id NSE-08081; BSE-673; MSE-1024, MCX-56285, NCDEX-1262. For compliance T&C and disclaimers, Visit bit.ly/ksecdisc
