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Best Pharma Stocks in India 2024

31 January 20246 mins read by Angel One
Diversify your portfolio by adding pharma stocks for stable growth potential. Let us look at some of the best pharma companies in this article.
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Investing in pharmaceutical stocks can be a lucrative but complex endeavour. Pharmaceutical companies often demonstrate resilience during economic downturns. The demand for healthcare and medications remains relatively stable, which can provide a buffer against market fluctuations. The pharmaceutical industry can experience significant growth due to advancements in healthcare technology, innovation in drug development, and an ageing population increasing the demand for healthcare services and medications.

Top 5 Pharma Stocks On 5Y CAGR Basis

S.No Company Name Market Cap (In ₹ crore) Close Price (₹) 5Y CAGR (%)
1 J. B. Chemicals & Pharmaceuticals Limited 26,261.38 1,693.80 60.51
2 Laurus Labs Ltd 21,607.14 400.90 39.62
3 Granules India Ltd 10,106.78 417.00 34.06
4 Aarti Drugs Ltd 4,920.82 535.25 28.89
5 Sun Pharmaceutical Industries Limited 3,31,612.09 1,382.10 26.72

Note: The list of the best pharma stocks is as of January 24, 2023. The stocks belong to the Nifty 500 and are sorted based on 5Y CAGR.

1. J. B. Chemicals & Pharmaceuticals Limited

J. B. Chemicals & Pharmaceuticals Limited is engaged in the manufacturing and marketing of a range of pharmaceutical formulations, herbal remedies and active pharmaceutical ingredients (APIs). During 1H FY 2024, the company derived ~55% of revenue from domestic formulations, followed by ~30% from export formulations, ~13% from contract manufacturing and ~2% from APIs.

Key Metrics:

  • ROE: 17.6%
  • ROCE: 22.2%
  • Profit Growth CAGR (5Y): 31%

2. Laurus Labs Private Ltd

Laurus Labs Private Ltd is a research and development pharmaceutical company which is engaged in the manufacturing of active pharmaceutical ingredients (APIs) for anti-retroviral (ARV) and Hepatitis C. In addition, the company also manufactures APIs in oncology and other therapeutic areas.

Key Metrics:

  • ROE: 20.4%
  • ROCE: 22.2%
  • Profit Growth CAGR (5Y): 34%

3. Granules India Limited

Granules India Limited is a pharmaceutical company that manufactures finished dosages (FDs), pharmaceutical formulation intermediates (PFIs), and active pharmaceutical ingredients (APIs). For the period FY 2-24- FY 2028, the company has decided to spend ₹2,000 crore in the form of total capex in a phase-wise manner. It has also planned a capex outlay for FY24 at ₹250 Cr, including ₹100 crores for land and civil works and ₹150 crores for a pilot plant for two KSMs and a commercial plant for one of the KSMs.

Key Metrics:

  • ROE: 7.28%
  • ROCE: 12.6%
  • Profit Growth CAGR (5Y): 3%

4. Aarti Drugs Limited

Aarti Drugs Limited is a pharmaceutical company which offers active pharmaceutical ingredients (APIs) in a range of therapeutic categories, such as anti-inflammatory, cardioprotectant, antifungals, antibiotic, antidiabetic, sedative and vitamins. The company also exports its APIs and specialty chemicals to over 100 countries across the globe.
Key Metrics:

  • ROE: 14.6%
  • ROCE: 15.3%
  • Profit Growth CAGR (5Y): 16%

5. Sun Pharmaceutical Industries Ltdd

Sun Pharmaceutical Industries Ltd is engaged in manufacturing, developing and marketing a wide range of branded and generic formulations and Active Pharma Ingredients (APIs). The company and its subsidiaries have various manufacturing facilities spread across the world, with trading and other incidental and related activities extending to the global market.
Key Metrics:

  • ROE: 16.6%
  • ROCE: 16.4%
  • Profit Growth CAGR (5Y): 26%

Top 5  Pharma Stocks On Net Profit Margin Basis

S.No Company Name Market Cap (In ₹ crore) Close Price (₹) Net Profit Margin (%)
1 Suven Pharmaceuticals Ltd 17,441.52 685.15 29.66
2 Concord Biotech Ltd 14,873.29 1,421.70 26.96
3 Natco Pharma Ltd 15,389.12 859.20 25.44
4 Pfizer Ltd 19,349.69 4,229.65 24.38
5 Eris Lifesciences Ltd 12,194.94 896.50 22.53

Note: The list of the best pharma stocks is as of January 24, 2023. The stocks belong to the Nifty 500 and are sorted based on net profit margin.

Top 5  Pharma Stocks On Free Cash Flow Basis

S.No Company Name Market Cap (In ₹ crore) Close Price (₹) FCF ( In ₹ crore)
1 Dr Reddy’s Laboratories Ltd 98,277.85 5,902.10 4,000.90
2 Sun Pharmaceutical Industries Ltd 3,31,612.09 1,382.10 2,873.75
3 Cipla Ltd 1,14,431.10 1,417.35 2,054.76
4 Torrent Pharmaceuticals Ltd 84,849.96 2,507.05 1,794.19
5 Zydus Lifesciences Ltd 76,158.24 752.40 1,657.90

 

Note: The list of the best pharma stocks is as of January 24, 2023. The stocks belong to the Nifty 500 and are sorted based on FCF.

Top 5  Pharma Stocks On ROE Basis

S.No Company Name Market Cap (In ₹ crore) Close Price (₹) ROE (%)
1 Sanofi India Ltd 19,408.83 8,427.40 35.45
2 Procter & Gamble Health Ltd 8,738.50 5,264.35 33.56
3 Abbott India Ltd 54,395.24 25,598.60 31.60
4 GlaxoSmithKline Pharmaceutical 37,188.86 2,195.25 27.73
5 Suven Pharmaceuticals Ltd 17,441.52 685.15 25.21

Note: The list of the best pharma stocks is as of January 24, 2023. The stocks belong to the Nifty 500 and are sorted based on ROE.

Top 5  Pharma Stocks On ROCE Basis

S.No Company Name Market Cap (In ₹ crore) Close Price (₹) ROCE (%)
1 Sanofi India Ltd 19,408.83 8,427.40 65.06
2 GlaxoSmithKline Pharmaceutical 37,188.86 2,195.25 42.06
3 Procter & Gamble Health Ltd 8,738.50 5,264.35 39.51
4 Abbott India Ltd 54,395.24 25,598.60 38.51
5 Suven Pharmaceuticals Ltd 17,441.52 685.15 31.68

Note: The list of the best pharma stocks is as of January 24, 2023. The stocks belong to the Nifty 500 and are sorted based on ROE.

Conclusion 

Investing in pharmaceutical stocks in India can be a wise choice due to their resilience during economic downturns. The demand for healthcare and medications remains stable, providing a buffer against market fluctuations. The pharmaceutical industry is poised for growth with advancements in healthcare technology and drug development innovation, and an aging population is increasing the need for healthcare services.

Disclaimer: This article is written for educational purposes only. The securities quoted are only examples and not recommendations.

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