Planning To Invest In Pharma Firms? Here Are The Top Stocks To Look Out For In 2024

The Indian pharmaceutical industry, ranking third globally in production volume, has shown remarkable growth, with a compound annual growth rate (CAGR) of 9.43 per cent over the past nine years. India, the world’s largest provider of generic drugs, saw pharmaceutical exports exceed $25 billion in the fiscal year 2023, signalling a promising future for the sector.

Furthermore, the Government of India has launched several initiatives to bolster the pharmaceutical sector. These include the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), the Production Linked Incentive (PLI) Scheme for Pharmaceuticals, the Promotion of Bulk Drug Parks Scheme, and the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS), among others. According to a recent EY-FICCI report, the Indian pharmaceutical market is projected to reach approximately $ 130 billion by 2030.

According to a CRISIL report, sales in India's domestic pharmaceutical sector are expected to grow between 8 per cent and 10 per cent during the fiscal year 2023-24. This growth is fueled by domestic expansion and increased exports to regulated markets. India holds a 5.71 per cent share of the global pharmaceutical market.

When it comes to pharmaceutical companies stocks, over the past decade, Nifty Pharma has achieved a CAGR of 10 per cent. The most prosperous period for pharmaceutical stocks, notably from 2009 to 2016, saw an impressive CAGR of around 30 per cent. During this time, healthcare stocks in India experienced significant growth, demonstrating their resilience even during external challenges like the COVID-19 pandemic. 

However, following this boom, a period of inflation affected the pharma sector along with various other industries. Despite this, investing in pharmaceutical stocks remains a beneficial choice. Here are some of the most prominent companies you can consider buying stock in.

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Sun Pharma:

Founded in 1983, Sun Pharmaceutical Industries has become a global leader in speciality generic pharmaceuticals. Based in Mumbai, the company operates in 150 countries and excels in three core areas: branded formulations, speciality generics, and active pharmaceutical ingredients.

Cipla:

Established in 1935 by Dr K.A. Hamied, Cipla is a leading Indian multinational pharmaceutical company headquartered in Mumbai. With a global presence in over 80 countries and a workforce exceeding 35,000, Cipla specialises in active pharmaceutical ingredients (API), generics, OTC products, biosimilars, and nutraceuticals. 

Dr Reddy's Laboratories:

Established in 1984, Dr Reddy's Laboratories, based in Hyderabad, India, is a prominent pharmaceutical enterprise. It is publicly traded on both the Bombay Stock Exchange and the National Stock Exchange of India. It operates in over 60 nations and boasts a workforce exceeding 6,000 individuals.

Zydus Lifesciences:

Headquartered in Ahmedabad and founded in 1995, Zydus Lifesciences emerges as a leading pharmaceutical entity specialising in active pharmaceutical ingredients, formulations, biotechnology, and nutraceuticals. 

Divi's Laboratories:

Based in Hyderabad, Divi's Laboratories is a multinational pharmaceutical corporation specialising in producing APIs and intermediates. The company offers a range of generic APIs and intermediates and manufactures and custom synthesises these pharmaceutical components to meet diverse industry needs.

[Disclaimer: Investing in the stock market involves financial risks. Please invest responsibly and only after thorough research and careful consideration. Reader discretion is advised.]