18 Best Pharma Stocks in India to Buy 2024

Importance of the Indian Pharmaceutical Sector Stocks in India 2024

The Indian pharmaceutical sector has been one of the fastest-growing sectors in the Indian economy and is currently valued at $50 billion. With over 60% of the world’s vaccine production capacity and the largest supplier of generic medicines, India holds a crucial position in the global healthcare landscape. Interest in healthcare has intensified post-pandemic, which is driving investors to explore pharma stocks to buy.

Robust R&D capabilities and cost-effective manufacturing practices have increased investor interest in healthcare stocks in India. Foreign investors have infused around $22.76 billion in the industry in FDI from 2000 to 2024. 

Additionally, steady revenue streams also make healthcare stocks in India a popular choice for long-term investors. The long-term growth potential is another particularly compelling reason to invest in the best pharma stocks. 

If you wish to gain exposure to this burgeoning sector, consider investing in some of the best pharma stocks to buy. Here is a table outlining some of the top healthcare stocks in India and their current market capitalisation.

18 Best Pharma and Healthcare Stocks in India 2024

18 top Pharmaceuticals Sector Stocks In India to buy 2024

• Dr. Reddy's Laboratories Ltd.

Established in 1984, Dr. Reddy’s Laboratories Ltd. is among the best healthcare stocks in India. Due to its strong R&D capabilities and diverse product portfolio, the company consistently features in the best pharma stocks to buy list. Dr. Reddy’s focus is primarily on producing branded generics, generics, active pharmaceutical ingredients (APIs), and over-the-counter medications.

The company’s 5-year sales and profit growth percentages stood at 12.9% and 27.7% CAGR, respectively. This combined with a low PE ratio of just 26.99 compared to the industry average, puts Dr. Reddy’s Laboratories Ltd. among the best pharma stocks to buy for long-term investors.

• Syngene International Ltd.

Syngene International Ltd. is one of the few companies in the Indian pharmaceutical sector offering end-to-end research, development, and manufacturing services. The unique niche Syngene has carved for itself makes it one of the ideal pharma stocks to buy for investors seeking exposure to R&D companies.   

An operating profit margin of 30.14% and a low debt-equity ratio of just 0.03 are key reasons why the company is featured in the best pharma stocks to buy list. One of the most noteworthy metrics of Syngene International Ltd. is the high inventory turnover ratio of 11.32, which is the highest among healthcare stocks in India. 

• Cipla Ltd.

Cipla holds a dominant position among the best pharma stocks due to its strong domestic and international presence. The company’s focus on respiratory medicines, complex generics, over-the-counter drugs, and APIs makes it stand out from the rest of the healthcare stocks in India. In addition to pharmaceuticals, Cipla Ltd. is also expanding into the affordable and effective diagnostics space.

A high operating profit margin of 31.77% and low PE of 29.86 make Cipla Ltd. one of the best pharma stocks to buy for the long term. Additionally, the company is one of the few healthcare stocks in India with a zero debt-equity ratio, which is another positive trait.   

• Sun Pharmaceutical Industries Ltd.

Sun Pharmaceutical Industries Ltd. is the largest in the best pharma stocks list in terms of market capitalisation. Founded in 1983, the company has a strong global presence that gives it an edge over other healthcare stocks in India. In addition to generics and branded generics, Sun Pharma also manufactures speciality drugs, OTC medicines, antiretrovirals (ARVs), and APIs.

The company’s revenue and profit-generating capability are strong and stable, which is evidenced by the sales and profit growth figures of 10.3% CAGR and 28.5% CAGR, respectively. The robust operating profit margin of 29.86% is another good indicator of its financial health, making Sun Pharma a strong contender in the pharma stocks to buy list.     

• Lupin Ltd. 

Lupin Ltd. is another well-established global pharmaceutical player among the leading healthcare stocks in India. The company’s strong presence in over 100 countries other than India makes it one of the best pharma stocks to buy. Key therapeutic areas where Lupin is most focused on include diabetes, anti-tuberculosis, cardiac, respiratory, and CNs.   

One of the key reasons for the company featuring in the pharma stocks to buy list is its debt-to-equity ratio. For an entity of this size, a debt-equity ratio of zero is quite impressive. Combined with an ROE and ROCE of 12% and 14.33%, Lupin Ltd. is one of the best pharma stocks that investors irrespective of their risk tolerance can consider.    

• Zydus Lifesciences Ltd.

With over 70 years of experience in the Indian pharmaceutical sector, Zydus Lifesciences Ltd. is one of the most dynamic healthcare stocks in India. The company’s innovative product portfolio balances generics and modern proprietary drugs. As a result, the company features among the best pharma stocks for growth-oriented investors.

Looking at the key financial metrics, it is clear that Zydus Lifesciences Ltd. is one of the pharma stocks to buy for the long term. The company has a low PE ratio of just 22.80 compared to its peers, making it an attractive investment in terms of valuation. An ROE of of 23.45% and an ROCE of 22.95% suggest that the company is generating strong returns among healthcare stocks in India. 

• GlaxoSmithKline Pharmaceuticals Ltd.

GlaxoSmithKline (GSK) Pharmaceuticals Ltd. is an Indian subsidiary of its parent company: GSK PLC located in London. As one of the best pharma stocks, the company benefits from its parent’s strong research pipeline and global innovations. GSK Pharma’s focus on vaccines and speciality medicines positions it among the best pharma stocks to buy for long-term growth. 

The company has a high inventory turnover ratio of 7.85 and a healthy operating profit margin of 27.40%, which acts as a testament to its efficiency and financial stability. Among the leading healthcare stocks in India, GSK has a zero debt-equity ratio, an ROE of 32.96%, and an ROCE of 45.85%.    

3 Reasons to Include Pharma Stocks in Your Portfolio

Including some of the best pharma stocks in your portfolio could help you reach your financial goals faster. Here are some compelling reasons why you should invest in healthcare stocks in India. 

• Diversification 

Most pharmaceutical companies operate in both developed and emerging markets. The diverse revenue streams reduce risks associated with any single market or economy. Including entities from the best pharma stocks to buy list in your portfolio can help you leverage this advantage and lower overall risk.   

• Defensive Investments

Compared to other sectors, healthcare is defensive by nature. The demand for essential medications and drugs is likely to remain high irrespective of economic conditions. This can make some of the best pharma stocks to buy more resilient during periods of downturns and high market volatility. 

• Potential for Innovation

Pharmaceutical companies in India are often at the forefront of medical research and innovation. Successful breakthroughs in medical and healthcare therapies could lead to significant growth in revenue and returns. Investing in a few healthcare stocks in India lets you take advantage of this potential and could even provide high returns in the long run. 

Model Portfolio 

Invest in the best healthcare stocks in India with Samco Securities as your trusted broking partner. This model portfolio of the best pharma stocks to buy can help you with your investment strategy. 

Detailed Overview of the 18 Best Pharma Stocks to Buy in India 2024