India’s pharmaceutical industry is a global leader, known for its resilience and innovation, especially after the pandemic. It ranks third worldwide in volume and 14th in value. The country’s pharma sector meets over 50% of the global vaccine demand, 40% of the U.S. generic drug demand, and supplies 25% of all medicines in the UK. Plus, the market is expected to grow at a 12.5% CAGR, reaching approximately Rs.1.09 lakh crore (USD 130 billion) by 2030. But is it following the projected growth trajectory?
The pharma industry is currently following a growth trend. The NIFTY Pharma index, a representation of India’s pharma sector, has grown nearly 53.80% in the last 12 months as of 30th August 2024, comfortably outnumbering the NIFTY50 returns.
As of 2nd September 2024, the index had a 5-year CAGR growth rate of 23.6% and a 1-year CAGR of 52.8%. Moreover, it has outperformed NIFTY50 by a decent margin. Why?
In recent quarters, the sector has benefited from several positive factors: better performance in the US generics market, strong results in branded markets, lower raw material costs, and increased market share for newly launched products. Plus, to some extent, the reason for growth can be attributed to the fine-performing top ten companies operating in the pharma sector.
Top 10 Pharma Stocks As Per Market Capitalization:
| Company Name | Last Price | % Change | 52 wk High | 52 wk Low | Market Cap (Rs. cr) | 1-year Stock Return |
| Sun Pharma | 1,815.95 | 3.73 | 1,837.00 | 922.45 | 435,707.23 | 63.75% |
| Divis Labs | 5,036.85 | 2.55 | 5,132.95 | 3,295.30 | 133,712.54 | 40.33% |
| Cipla | 1,646.65 | 3.84 | 1,681.60 | 996.5 | 132,976.85 | 32.22% |
| Torrent Pharma | 3,429.75 | 2.00 | 3,574.00 | 1,636.85 | 116,078.32 | 92.06% |
| Dr Reddys Labs | 6,872.15 | -1.39 | 7,107.45 | 5,076.25 | 114,675.49 | 23.19% |
| Zydus Life | 1,111.55 | -8.14 | 1,324.30 | 567.75 | 111,847.94 | 81.05% |
| Lupin | 2,232.75 | 5.86 | 2,265.80 | 821.6 | 101,844.08 | 104.12% |
| Mankind Pharma | 2,391.15 | 3.08 | 2,555.40 | 1,627.55 | 95,800.02 | 39.30% |
| Aurobindo Pharma | 1,553.95 | 1.31 | 1,584.45 | 708.85 | 91,051.93 | 88.23% |
| Alkem Lab | 6,073.65 | 5.30 | 6,199.90 | 3,395.00 | 72,619.60 | 68.02% |
5 Top Pharma Stocks
Sun Pharma:
Sun Pharmaceuticals is a leading global specialty generics company with a worldwide presence in specialty, generics, and consumer healthcare products. They operate 41 manufacturing facilities worldwide and deliver high-quality, affordable medicines to around 100 countries. In FY2024, Sun Pharma invested 6.7% of its global revenues into Research and Development (R&D). They market 26 specialty products globally, contributing approximately 18% to their consolidated revenues for FY2024.
Global Specialty, their new growth engine, increased from 7% of consolidated revenues in FY2019 to 18% in FY2024. Their emerging market sales grew by 9.1% to Rs.8600 crore, contributing 18% to consolidated revenues, while global specialty revenues saw a 19.3% growth to Rs.8714.69 (USD 1039 Million). Moreover, their June 2024 quarterly results recorded a net profit of Rs.2860.51 crore in FY20254.
Divis Laboratories Ltd.:
Divi’s Laboratories Ltd., based in Hyderabad, India, has been a leading name in the pharmaceutical industry for over 30 years. With two manufacturing units, Divi’s specializes in producing high-quality APIs (Active Pharmaceutical Ingredients), Intermediates, and Registered Starting Materials, serving over 100 countries. The company operates through three primary business segments: Generic APIs, Custom Synthesis, and Nutraceuticals. Its world-class manufacturing units boast a combined capacity of around 14,600 M³, offering a diverse portfolio of 160 products across various therapeutic areas.
Divis Laboratories also has two subsidiaries: one in New Jersey, USA, and another in Basel, Switzerland, to better serve its nutraceutical customers in those regions. Regarding the recent financials, while the company’s net profit margin decreased to 19.70% in FY2024 from 22.67% in FY2023, its revenue from operations rose to Rs.7,845 crore. Additionally, Divi’s saw a year-on-year increase in net profit for the quarter ending June 2024, reaching Rs.430 crore.
Cipla Limited:
Cipla, a leading Indian pharmaceutical company, was established in 1935. It operates through three central units: APIs, respiratory, and Cipla Global Access. Its largest market is India, followed by Africa and North America. Cipla is the third-largest pharmaceutical company in India and leads the pharmaceutical prescription market in South Africa. It is also a major exporter, particularly to emerging markets and Europe. The company’s 46 manufacturing sites worldwide produce over 1,500 products in over 50 dosage forms, serving 78 markets.
In FY2024, Cipla gained approval from CDSCO to market the novel antibiotic plazomicin in India. It also partnered with Sanofi India to distribute CNS products and collaborated with CSIR-CDRI to co-develop an innovative ophthalmic solution. Financially, Cipla saw a 13% YoY revenue growth to Rs.25,774 crore, with a ROCE of 31%. The company reduced its debt to Rs.247 crore and earned a profit of Rs. 4,15422 crore, with a PAT margin of 16%.
Torrent Pharmaceuticals Limited:
Torrent Pharmaceuticals Limited, known as Torrent Pharma, is the flagship company of the Torrent Group. It pioneered niche marketing in India and is a top name in cardiovascular (CV), central nervous system (CNS), vitamin mineral nutrients (VMN), and gastrointestinal (GI) segments. Torrent Pharma also has a strong presence in dermatology, diabetology, pain management, oncology, and gynecology. The company operates globally, reaching over 40 countries through its 8 manufacturing units in India.
With 72% of its revenues from branded generics and a focus on chronic therapeutic areas, Torrent Pharma has carved out a unique position in the global pharmaceutical market. Besides, the strategic alliance with Zydus Lifesciences Ltd further strengthened its gastroenterology portfolio. It ranked as the 5th largest company in the Indian Pharmaceutical Market (IPM) with a revenue of Rs.10,728 crores in FY2023-24. The Indian market contributed 53% of these revenues. The company spent Rs.527 crores on R&D, filed 38 patents, and delivered a net profit of Rs.1,656.38 crores.
Dr Reddys Laboratories Limited:
Dr. Reddy’s Laboratories Ltd, founded in 1984, is a leading pharmaceutical company in India. It offers a range of products, including Active Pharmaceutical Ingredients (APIs), generics, biosimilars, and custom pharmaceutical services (CPS). With over 400 high-quality generic drugs in 76 countries, the company leverages its expertise in active ingredients, product development, regulatory understanding, and a streamlined supply chain.
Dr. Reddy’s became the first Indian pharma company in the Dow Jones Sustainability World Index 2023 and S&P Global’s Sustainability Yearbook 2024, ranking in the top 10%. In 2023-24, it partnered with Nestlé India to introduce health science nutraceuticals across India and other regions. Additionally, it collaborated with Sanofi to expand vaccine access in India. The company’s financial strength is evident, with a total net worth of Rs.28,05560 crore and total revenue of Rs.28,905 crore in FY2024.
The Indian pharmaceutical sector has grown at a CAGR of 9.43% in the last nine years and currently holds 5.71% of the global pharmaceutical market. Considering these figures and the related projections, the sector is poised to grow shortly. Besides, the government is giving a fair push to this industry through initiatives like PM Bhartiya Janaushadhi Pariyojana and the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS). However, irrespective of its growth prospects, consider doing thorough research and seeking expert advice before investing in any of the top pharma stocks.
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I’m Archana R. Chettiar, an experienced content creator with
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