Pharma Stocks : List of Best Pharma Shares to Invest in India 2024

Pharma stocks, in simple terms, represent shares of listed pharmaceutical companies. The top pharma stocks in India collectively form the Nifty Pharma index, and the index's performance is closely tied to that of the leading pharmaceutical stocks.

Over the past decade, Nifty Pharma has shown a Compound Annual Growth Rate (CAGR) of 10%. The most prosperous phase for pharma stocks, notably between 2009 and 2016, witnessed an impressive CAGR of around 30%. These healthcare stocks in India experienced notable growth, unaffected by external factors such as the COVID-19 pandemic. However, post this period, a phase of inflation impacted not only the pharma sector but various other industries as well. Let's delve into why investing in pharma stocks remains a beneficial choice.

Best Pharma Stocks to Invest in India 2024

Here's a list of the top pharma stocks in India, presenting a diverse range of opportunities for investors:

Overview of Top Pharma Stocks in India

Now, let's take a closer look at some of these industry leaders and understand their potential for long-term growth.

1. Sun Pharmaceutical Ltd

Founded in 1983, Sun Pharmaceutical Industries Ltd. has emerged as a global leader in specialty generic pharmaceuticals. Operating across 150 countries, the Mumbai-based company excels in three core areas: branded formulations, specialty generics, and active pharmaceutical ingredients (API). Sun Pharma's diverse product portfolio spans cardiovascular, central nervous system, gastroenterology, ophthalmology, and dermatology categories. Noteworthy products include Modalert for sleep disorders, Glocip for diabetes, and Doxicip for bacterial infections. Renowned brands like Revital, Tazret, and Olmecip further underscore Sun Pharma's commitment to providing innovative healthcare solutions worldwide.

2. Cipla Ltd 

Founded in 1935 by Dr. K.A. Hamied, Cipla Ltd is a leading Indian multinational pharmaceutical company headquartered in Mumbai. With a global presence in over 80 countries and a workforce of 35,000+, Cipla specializes in active pharmaceutical ingredients (API), generics, OTC products, biosimilars, and nutraceuticals. Known for respiratory, anti-infectives, cardiovascular, and oncology drugs, popular brands include Asthalin, Cipcal, Cifran, and Erythromycin. Cipla's commitment extends to manufacturing nutraceuticals, herbal products, and over-the-counter medicines, showcasing its dedication to diverse healthcare solutions.

3. Dr Reddy's Laboratories Ltd 

Founded in 1984, Dr. Reddy's Laboratories Ltd, based in Hyderabad, India, is a leading pharmaceutical company listed on the Bombay Stock Exchange and National Stock Exchange of India. With operations in 60+ countries and over 6,000 employees globally, the company emphasizes research and development.

Offering a diverse range of products and services, including prescription drugs, generics, over-the-counter drugs, active pharmaceutical ingredients, biotechnology products, and nutraceuticals, Dr. Reddy's is known for antibiotics, anti-infectives, anti-diabetics, anti-cancer, cardiovascular, gastrointestinal, and dermatology products. Popular brands include Omez, Ciprocin, Revital, and a notable presence in the generics market with brands like Reditux and Reditux-D.

4. Torrent Pharmaceuticals Ltd 

Established in 1959, Torrent Pharmaceuticals Ltd is a leading player in India's pharmaceutical sector. Operating in research, development, manufacturing, and marketing, the company is committed to delivering high-quality, affordable medicines. Specializing in cardiovascular, antibiotics, anti-diabetic, anti-inflammatory, and anti-infective drugs, popular brands like Cadila, Torleva, Torlip, and Torleva XR underscore Torrent Pharmaceuticals' significant impact in the industry.

5. Gland Pharma Ltd 

Founded in 1978, headquartered in Hyderabad, Gland Pharma Ltd is a leading Indian pharmaceutical company specializing in injectable drugs and active pharmaceutical ingredients. As one of the world's largest independent companies, it is renowned for providing high-quality, cost-effective injectable products. Gland Pharma's operations cover the development, manufacture, and marketing of a wide range of injectables, including antibiotics, anti-emetics, anti-diabetics, and more. Popular brands like Cephalosporin, Penicillin, and Amikacin are widely used in hospitals and clinics, reflecting the company's global impact in the pharmaceutical industry. Gland Pharma has also launched various generic and branded injectables, including Cefazolin, Cefuroxime, and Amikacin.

6. Abbott India Ltd 

Abbott India Ltd, a leading multinational pharmaceutical company headquartered in Mumbai, operates with manufacturing facilities in Goa and a widespread network of third-party manufacturers across India. Specializing in Women's Health, Gastroenterology, CNS, Metabolics, MultiSpecialty, Vaccines, and Consumer Health, Abbott India has demonstrated resilience amid challenges.

Throughout its history, the company has strategically evolved, launching innovative products like Digene Total and Thyronorm 150 Digene. Despite facing hurdles from the Drug Price Control Order 2013, Abbott India continues to make strides, conducting phase 3 studies for the Influvac Quadrivalent Vaccine QIV Program and expanding its portfolio with unique products. Recognized as The Most Innovative MNC of the Year 2019, Abbott India remains committed to excellence and innovation in the pharmaceutical industry.

7. Alkem Laboratories Ltd 

Founded in 1973 by Mr. Samir C. Desai, Alkem Laboratories Ltd stands as a prominent pharmaceutical company with its headquarters in Mumbai, India. Specializing in the manufacture of a diverse range of pharmaceutical products, Alkem Laboratories caters to multiple therapeutic categories, including cardiovascular, central nervous system, gastro-intestinal, anti-infective, diabetology, and nutrition. With a robust presence in the Indian market and a global reach extending to over 50 countries, Alkem Laboratories is a leading player in the pharmaceutical industry.

8. Zydus LifeScience Ltd 

Established in 1995 and headquartered in Ahmedabad, India, Zydus Lifesciences Ltd is a leading pharmaceutical company operating in active pharmaceutical ingredients, formulations, biotechnology, and nutraceuticals. With a global footprint, the company is known for its high-quality pharmaceutical products, including a wide range of generic and specialty drugs in cardiovascular, anti-infective, anti-diabetic, and oncology categories. Notable brands like Cadila, Nutralite, and Zydus Wellness contribute to the company's strong presence in the Indian market, where its products are available in over 20,000 stores. Zydus Lifesciences further extends its impact by exporting products to more than 100 countries worldwide.

9. Aurobindo Pharma Ltd 

Established in 1986, Aurobindo Pharma Ltd is a leading Indian multinational pharmaceutical company with diversified operations in APIs, generics, biosimilars, advanced drugs, and consumer healthcare. Renowned for top products like antibiotics, anti-malarials, cardiovascular, and anti-diabetic drugs, Aurobindo Pharma's popular brands include Aurolife, Aurocare, Aurochem, and Aurovit. As one of India's largest generic drug manufacturers, the company has a global footprint, reaching over 150 countries, affirming its significant impact on the international pharmaceutical stage.

10. Lupin Ltd 

Established in 1968 with headquarters in Mumbai, Lupin Ltd is a global pharmaceutical company engaged in branded and generic formulations, biotechnology, APIs, and animal health products. Renowned for a diverse product portfolio, Lupin offers prescription and OTC drugs, including antibiotics, cardiovascular medications, antidiabetics, and anti-asthmatics. Branded products like Metoject, Lupitac, and Lupizole complement their notable presence in the generic drug market with offerings like Amlodipine, Montelukast, and Cetirizine. As a leading API manufacturer with over 200 APIs, Lupin Ltd also extends its reach to animal health products, including veterinary vaccines, feed supplements, and pet care items.

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.

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. 

Safety and Stability

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.

Important things to remember:

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. 

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. 

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.