Best Pharma Stocks to Invest in India (2022): How to Find Them?

Last updated:
top pharma companies in india

Top Pharma Companies in India - Introduction

Pharma stocks, plainly put, are the stocks of listed pharma companies. The best pharma stocks in India in 2022 all together comprise the Nifty Pharma index. The performance of this index depends on the performance of the best pharma stocks.

In the last 10 years, Nifty Pharma has delivered a CAGR of 10%. The golden period for pharma stocks, however, has been the period between 2009 and 2016, when they returned a CAGR of around 30%. These best healthcare stocks in India also boomed during the COVID-19 pandemic when the demand for medicines, healthcare equipment, and related products increased exponentially. However, post-COVID followed a period of inflation in which not only the pharma sector but all other sectors suffered a lot. Let’s now move on to learn why investing in pharma stocks is beneficial. 

Best Pharma Stock in India in 2022 : Benefits of Investing in Pharma Stocks 

Past Performance of Pharma Stock in India

As discussed, the pharma sector (Nifty Pharma) has delivered a CAGR of 10 in the last decade and in and around 30% during the seven years period from 2009-2016. These stocks also helped investors to minimize their losses in the time of COVID pandemic. When stocks of all other sectors were hitting their 52-week low, pharma stocks performed spectacularly. Hence, the track record of stock of the best pharma companies shows that the sector has offered investors generous returns in the long term.

Top Pharma Stocks in India: Long Term Opportunity?

Pharma stocks are not comprised only of small-cap companies. If you go on to look for the best pharma stocks to buy in India 2022, you will find big names like Sun Pharmaceuticals, Cipla, Dr. Reddy’s Laboratories, Torrent Pharma, and more. Apart from being successful in India, these companies are also well-established overseas. You can capitalize on the growth of these companies to earn higher returns. 

Best Pharma Stocks: Are They Safe?

Pharma stocks are both growth and value stocks, which makes them of the few available equity investment choices that offer returns along with stability. Moreover, the pharma sector has a future of growth and that ensures the future of these stocks as well. The smoothening of regulations on pharma companies and the government’s support to the Indian companies will likely help these stocks to grow further in the future.

Now that we know why one should also include pharma stocks in their portfolio, let us proceed to know about the best pharma stocks to buy in 2022.

Feature Launch: SIP in US Stocks and ETFs.

We all love the SIP approach to investing - it averages out the cost of investing, and on top of it, the power of compounding continues the benefits if invested for the long term.

Following the users' demand, we have launched the US Stocks SIP feature. Now, you can invest as low as Rs. 500 SIP on a weekly or monthly basis in any US stock or ETF be it a Tesla, Amazon, Apple, Meta or Microsoft, or many such stocks and ETFs - check out the US stocks to start the SIP.

Top Pharma Companies in India:

StocksMarket Cap(Cr.)PE Ratio5-year Return(%)
Sun Pharmaceutical Ltd2,48,05560.5788.98
Cipla Ltd89,21034.7878.59
Dr Reddy's Laboratories Ltd73,36323.6392.11
Torrent Pharmaceuticals Ltd55,15169.14155.28
Gland Pharma Ltd27,88327.110.99
Abbott India Ltd43,06748.84301.98
Alkem Laboratories Ltd36,68733.6055.16
Zydus Lifesciences Ltd40,70121.18-10.16
Aurobindo Pharma Ltd27,19012.88-35.33
Lupin Ltd32,729490.26-13.41

(Data as of November 25, 2022)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Top Pharma Stocks in India based on past 5-years' returns:

(Data as of November 29, 2022)

You can make such tables yourself using online stock screens. Sort pharma stocks based on a number of parameters in order to pick out the ones of top quality. With some research, you can easily buy top pharma stocks in 2022.

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

  • Is there any mutual fund that invests in pharma stocks?

  • Do pharma companies suffer from regulations globally?

  • Do big pharma companies offer the best returns?