India is the largest supplier of generic medicines globally and is widely recognised for its affordable vaccines and generic drugs. The Indian pharmaceutical industry ranks third in the world by production volume and has seen constant growth, with an average annual growth rate of 9.43% over the past nine years. This article explores some of the top pharmaceutical stocks in India for February 2025, focusing on their 5-year CAGR.
Overview of India’s Pharmaceutical Industry
India plays an important role in the global pharmaceutical market. It provides over 50% of the world’s vaccines, 40% of generic medicines used in the US, and 25% of those in the UK. The domestic industry is vast, with around 3,000 pharmaceutical companies and about 10,500 manufacturing units.
The country is also a major supplier of antiretroviral drugs, which are used worldwide to treat AIDS. In fact, Indian companies supply more than 80% of these medicines globally, earning India the nickname “pharmacy of the world” for its high-quality, affordable products.
The Indian pharmaceutical industry is a significant contributor to the economy, accounting for about 1.72% of the GDP. Globally, it ranks third in production volume and 14th in value.
According to a report by EY and FICCI, the Indian pharmaceutical market is expected to grow to $130 billion by 2030. Meanwhile, the global pharmaceutical market was projected to exceed $1 trillion in 2023.
Best Pharma Sector Stock List In India In February 2025 – 5-Year CAGR Basis
Note: The list of top pharma stocks in India listed in the stock market here are sorted as per the 5-yr CAGR as of January 24, 2025.
Overview of Best Pharma Company Stocks in India in February 2025
1. Laurus Labs
Laurus Labs, established in 2005, is a pharmaceutical and biotechnology company known for its research-driven approach. It holds a leading global position in producing specific Active Pharmaceutical Ingredients (APIs) for anti-retroviral, oncology, cardiovascular, and gastroenterology treatments, including high-potency APIs.
Laurus Labs reported a revenue of ₹1,184.85 crore for September 2024, an increase from ₹1,116.93 crore in June 2024, contributing to a total revenue of ₹4,812.39 crore for FY 2023-24. The net profit for September 2024 stood at ₹42.44 crore, up from ₹28.78 crore in June 2024, with a cumulative net profit of ₹223.70 crore for the fiscal year.
Key metrics:
- Earning per share (EPS): ₹4.36
- Return on equity (ROE): 5.51%
2. Glenmark Pharmaceuticals Ltd
Glenmark Pharmaceuticals Ltd is a research-focused global pharmaceutical company that operates in generics, speciality medicines, and over-the-counter (OTC) products. It has a presence in more than 80 countries.
Glenmark Pharmaceuticals reported revenue of ₹2,636.10 crore in September 2024, up from ₹2,329.54 crore in June 2024, with a total of ₹7,891.12 crore for FY23-24. The net profit for September 2024 stood at ₹595.06 crore, compared to ₹453.73 crore in June 2024 and ₹5,167.29 crore for the fiscal year 2023-24.
Key metrics:
3. Ajanta Pharma
Ajanta Pharma is engaged in the development, manufacturing, and marketing of high-quality speciality pharmaceutical finished dosages. In India, the company generates 31% of its FY23 revenue from its branded generic business. It focuses on niche and first-to-market drugs across 4 key therapeutic areas: cardiology, ophthalmology, dermatology, and pain management.
In September 2024, Ajanta Pharma reported a revenue of ₹1,128.91 crore and a net profit of ₹234.98 crore. In June 2024, the revenue was ₹1,077.27 crore, and the net profit stood at ₹236.03 crore. For the fiscal year 2023-24, the company achieved a revenue of ₹3,971.12 crore and a net profit of ₹807.24 crore.
Key metrics:
4. Ipca Laboratories
Ipca Laboratories is a fully integrated pharmaceutical company that manufactures more than 350 formulations and 80 active pharmaceutical ingredients (APIs) across various therapeutic segments. With its diverse product portfolio, the company ranks among the top 20 pharmaceutical companies in India.
In September 2024, Ipca Laboratories reported a revenue of ₹1,810.94 crore and a net profit of ₹244.12 crore. This was an increase from June 2024, when the company reported a revenue of ₹1,565.86 crore and a net profit of ₹204.13 crore. For the fiscal year 2023-24, the company achieved a total revenue of ₹6,166.46 crore and a net profit of ₹530.41 crore.
Key metrics:
5. Aurobindo Pharma
Aurobindo Pharma is one of the leading pharmaceutical companies in India and holds the position of the second-largest in the country. It is also the largest generics company in the United States by prescription volume. Additionally, Aurobindo Pharma ranks among the top 10 generic companies in 7 out of 11 countries in Europe. By FY22 revenues, it is counted among the top 5 listed pharmaceutical companies in India.
For the period ending September 2024, Aurobindo Pharma reported a revenue of ₹2,824.59 crore, a net profit of ₹537.53 crore, and for the full fiscal year 2023-24, the company achieved a total revenue of ₹10,645.64 crore and a net profit of ₹1,954.14 crore.
Key metrics:
Best Pharma Sector Stock List In India In February 2025 – Market Cap Basis
Name |
↓Market Cap (₹ in crore) |
Close Price (₹) |
PE Ratio |
1Y Return (%) |
5Y CAGR (%) |
Sun Pharmaceutical Industries Ltd |
4,39,942.06 |
1,833.60 |
45.94 |
33.03 |
32.45 |
Cipla Ltd |
1,17,196.91 |
1,451.15 |
28.44 |
2.99 |
25.55 |
Torrent Pharmaceuticals Ltd |
1,10,460.13 |
3,263.75 |
66.69 |
30.9 |
26.43 |
Mankind Pharma Ltd |
1,08,713.44 |
2,635.05 |
56.83 |
22.97 |
– |
Dr Reddy’s Laboratories Ltd |
1,07,422.62 |
1,289.40 |
19.26 |
13.62 |
16.24 |
Note: The list of top pharma stocks in India listed in the stock market here are sorted as per the market cap as of January 24, 2025.
Best Pharma Sector Stock List In India In February 2025 – Net Profit Margin Basis
Name |
Market Cap (₹ in crore) |
Close Price (₹) |
PE Ratio |
5Y CAGR (%) |
↓Net Profit Margin (%) |
Abbott India Ltd |
59,178.88 |
27,849.80 |
49.27 |
16.99 |
19.62 |
Ajanta Pharma Ltd |
36,173.92 |
2,895.95 |
44.32 |
29.72 |
19.01 |
GlaxoSmithKline Pharmaceuticals Ltd |
35,365.20 |
2,087.60 |
59.95 |
5.07 |
16.41 |
Alkem Laboratories Ltd |
61,976.52 |
5,183.50 |
34.51 |
17.35 |
13.84 |
Aurobindo Pharma Ltd |
72,298.19 |
1,244.80 |
22.79 |
20.5 |
10.73 |
Note: The list of top pharma stocks in India listed in the stock market here are sorted as per the net profit margin as of January 24, 2025.
Things to Consider Before Investing in Indian Pharma Stocks
The growth of healthcare facilities in India significantly influences the pharmaceutical industry. As healthcare services expand and the demand for medical products rises, pharmaceutical companies have more opportunities to grow.
The demand for pharmaceutical products depends on factors like an ageing population, higher healthcare spending, and the spread of diseases. Evaluating both current and future demand is essential to understanding the growth potential of pharma stocks.
The pharmaceutical sector is highly competitive, with companies often pursuing mergers and acquisitions to maintain their edge. It’s important to assess a company’s market position, growth potential, and recent stock performance to make informed decisions.
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Research and Development (R&D)
Pharma companies invest a lot in R&D to develop new drugs and treatments. Checking a company’s R&D spending and pipeline of upcoming products can help determine whether they are working on promising innovations.
Conclusion
The pharmaceutical sector is a key part of India’s foreign trade and offers substantial investment opportunities. However, potential risks include regulatory changes, particularly those affecting pricing and exports, which can impact revenues. Many Indian pharma companies rely on the US market, where regulatory scrutiny and FDA inspections can influence stock prices. Additionally, since the industry depends heavily on exports, currency fluctuations can pose risks. Carefully evaluating these factors is crucial before investing in pharma stocks.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.