Indian pharmaceutical sector supplies over 50% of the global demand for various vaccines, 40% of the generic demand for US and 25% of all medicines for UK. India contributes the second-largest share of pharmaceutical and biotech workforce in the world. According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade. India’s domestic pharmaceutical market is estimated at US$ 42 billion in 2021 and likely to reach US$ 65 billion by 2024 and further expand to reach US$ 120-130 billion by 2030.
Globally, India
ranks 3rd in terms of pharmaceutical production by volume and 14th by
value. The domestic pharmaceutical industry includes a network of 3,000 drug
companies and 10,500 manufacturing units. India’s medical devices market stood
at US$ 10.36 billion in FY20. The market is expected to increase at a CAGR of
37% from 2020 to 2025 to reach US$ 50 billion.
Due to the
COVID-19 pandemic, healthcare facilities and medicines have become the need of
the hour. India, the second-largest populated country, have also seen numerous
cases of Covid-19 and the number is still growing.
Below are top pharmaceutical companies to buy for next 5 years :
Sun Pharmaceutical Industries Ltd. (Sun Pharma) is the fourth largest specialty generic pharmaceutical company in the world with global revenues of over US$ 4.5 billion. Supported by more than 40 manufacturing facilities, we provide high-quality, affordable medicines, trusted by healthcare professionals and patients, to more than 100 countries across the globe.
Current Price - Rs. 798/- Target - Rs. 980/-
Divis Laboratories Ltd is engaged in
manufacturing of Advanced Pharmaceutical Ingredients (APIs), Intermediates and
Nutraceutical ingredients with predominance in exports. It has a market presence
in 95 countries and 14,000 employees and is one of the leading pharmaceutical
companies in the world.
Divis
Laboratories is an India-based manufacturer of active pharmaceutical
ingredients (APIs) and intermediates, as well as custom synthesis of active
ingredients and other specialty chemicals such as peptides and nutraceuticals.
Its main manufacturing and research and development facilities are located in
the State of Andhra Pradesh, India. The company has four multi-purpose
manufacturing facilities with all support infrastructures, such as utilities,
environment management and safety systems. It operates predominantly in export
markets and has a product portfolio under generics and custom synthesis. Its
subsidiaries include Divis Laboratories (USA) Inc. and Divi’s Laboratories
Europe AG.
Cipla Ltd is one of the leading pharmaceutical companies in India. The company focuses on development of new formulations and has a wide range of pharmaceutical products. The product portfolio includes over 1500 products across wide range of therapeutic categories. Cipla Ltd was incorporated in the year 1935 with the name Chemical Industrial & Pharmaceutical Laboratories Ltd. Khwaja Abdul Hamied the founder of Cipla gave the company all his patent and proprietary formulas for several drugs and medicines without charging any royalty.
Current Price - Rs. 922/- Target - Rs. 1,275/-
Torrent
Pharmaceuticals Ltd is an Indian multinational pharmaceutical company, owned by
Torrent Group and headquartered in Ahmedabad. It was promoted by U. N. Mehta,
initially as Trinity Laboratories Ltd, and was later renamed Torrent
Pharmaceuticals Ltd.
Torrent
Pharmaceuticals operates in more than 40 countries with over 2000 product
registrations globally. Torrent Pharma is active in the therapeutic areas of
Cardiovascular (CV), central nervous system (CNS), gastro-intestinal,
diabetology, anti-infective and pain management segments. It has also forayed
into the therapeutic segments of nephrology and oncology while also
strengthening its focus on gynecology and pediatric segments.
Current Price - Rs. 2,789/- Target - Rs. 4,125/-
Dr. Reddy's
Laboratories is an Indian multinational pharmaceutical company located in
Hyderabad, Telangana, India. The company was founded by Anji Reddy, who
previously worked in the mentor institute Indian Drugs and Pharmaceuticals Limited. Dr. Reddy's manufactures and markets a wide range of pharmaceuticals in India
and overseas. The company has over 190 medications, 60 active pharmaceutical
ingredients (APIs) for drug manufacture, diagnostic kits, critical care, and
biotechnology products.
Current Price - Rs. 4,818/- Target - Rs. 6,325/-
Pharma
companies can be attractive for long-term investors in spite of the volatility.
The ever-rising industry size and healthcare becoming a critical part of life,
investors can make good returns if they invest at the right time. Further,
being an evolving industry, innovation, scientific breakthroughs, and
technological advances bring in exponential growth for many Pharma companies.
Other than
that, investors should look at Pharma stocks which are fundamentally sound with
resilient balance sheets, proven track record of clearance from USFDA issues
and management expertise. The companies should have visibility in growth and
ability to come out stronger from downturns. Factors such as consistent high
return ratios, lower debt to equity ratio, profit margins, R&D expenditure,
drugs at various stages of approval in the pipeline, patents for drugs etc.
should definitely be checked for investing in a pharma company.
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