Best Pharma Stocks in India on 5Y CAGR Basis – June 2024

According to the India Brand Equity Foundation (IBEF), the Indian Pharmaceutical Industry is projected to grow to US$130 billion by 2030 and US$450 billion by 2047. This sector comprises approximately 3,000 drug companies and around 10,500 manufacturing units.

The pharma industry benefits from stable demand for healthcare and medications, providing resilience against market fluctuations. Factors driving growth include advancements in healthcare technology, innovations in drug development, and an ageing population increasing healthcare and medication demands.

In this article, check the best pharma stocks in India in 2024 listed based on various parameters, such as 5-yr CAGR, net profit margin, free cash flow, ROE and ROCE.

Top 5 Pharma Stocks On 5Y CAGR Basis

Note: The list of the best pharmaceutical stocks is as of June 25, 2024. The stocks belong to the Nifty 500 and are sorted based on 5Y CAGR.

Overview of the Best Pharma Stocks Based on the 5-yr CAGR

1. J. B. Chemicals & Pharmaceuticals Limited

J. B. Chemicals & Pharmaceuticals Limited manufactures and markets a range of pharmaceutical formulations, herbal remedies, and active pharmaceutical ingredients (APIs). For FY 2024, the company recorded revenue of ₹3484 crore, up from ₹3149 crore in FY 2023, registering a growth of 11%. In Profit after Tax, they reported a growth of 35% to ₹553 crore, up from ₹410 crore in FY 2023.

Key Metrics:

• ROE: 17.75%
• ROCE: 26.59%

2. Laurus Labs Private Ltd

Laurus Labs Private Ltd is a research and development pharmaceutical company which is engaged in the manufacturing of active pharmaceutical ingredients (APIs) for antiretroviral (ARV) and Hepatitis C. In addition, the company also manufactures APIs in oncology and other therapeutic areas. In FY 2024, the company’s total income decreased by 17% to ₹5,041 crore and in Q4 FY 2024, the total income increased by 4% Y-o-Y to ₹1,440 crore.

Key Metrics:

• ROE: 3.93%
• ROCE: 7.95%

3. Granules India Limited

Granules India Limited is a pharmaceutical company that manufactures finished dosages (FDs), pharmaceutical formulation intermediates (PFIs), and active pharmaceutical ingredients (APIs). For the period FY 2024- FY 2028, the company has decided to spend ₹2,000 crore in the form of total capex in a phase-wise manner. It has also planned a capex outlay for FY24 at ₹250 Cr, including ₹100 crores for land and civil works and ₹150 crores for a pilot plant for two KSMs and a commercial plant for one of the KSMs.

In Q4 FY 2024, the revenue from operations stood at ₹11,758 million, a drop of 2% YoY and in FY 2024, the revenue from operations was ₹45,064 million, while it was ₹45,119 million in FY 2023.

Key Metrics:

• ROE: 19.06%
• ROCE: 21.14%

4. Zydus Lifesciences Ltd

Zydus Lifesciences Ltd is an innovative global life sciences company engaged in the discovery, development, manufacturing, and marketing of a diverse array of healthcare therapies. In FY 2024, the company’s revenue from operations was ₹1,95,474 million, up by 13% over last year. In Q4 FY 2024, the revenue from operations was ₹55,338 million, up by 10% compared to the same period in FY 2023.
Key Metrics:

• ROE: 10.12%
• ROCE: 24.52%

5. Sun Pharmaceutical Industries Ltd

Sun Pharmaceutical Industries Ltd is engaged in manufacturing, developing and marketing a wide range of branded and generic formulations and Active Pharma Ingredients (APIs). The company and its subsidiaries have various manufacturing facilities spread across the world, with trading and other incidental and related activities extending to the global market. In FY 2024, the company reported gross sales at ₹4,77,585 million, a growth of 10.4%. IN Q4 FY 2024, gross sales were at ₹1,18,133 million, with a growth of 10.1%.
Key Metrics:

• ROE: 15.35%
• ROCE: 18.63%

Top 5 Pharma Stocks On Net Profit Margin Basis

Note: The list of the best pharma stocks is as of June 25, 2024. The stocks belong to the Nifty 500 and are sorted based on net profit margin.

Top 5 Pharma Stocks On Free Cash Flow Basis

Note: The list of the best pharma stocks is as of June 25, 2024. The stocks belong to the Nifty 500 and are sorted based on FCF.

Top 5 Pharma Stocks On ROE Basis

Note: The list of the best pharma stocks is as of June 25, 2024. The stocks belong to the Nifty 500 and are sorted based on ROE.

Top 5 Pharma Stocks On ROCE Basis

Note: The list of the best pharma stocks is as of June 25, 2024. The stocks belong to the Nifty 500 and are sorted based on ROE.

Conclusion 

As of March 2024, India leads globally in generic drug production and is renowned for affordable vaccines and generic medicines. The Indian pharmaceutical sector ranks third globally in production volume, having grown steadily at a CAGR of 9.43% over the past nine years.

Before investing in Indian pharmaceutical stocks, conduct comprehensive research on the company. Assess your investment goals and risk tolerance carefully, and seek advice from a financial advisor.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.