Best Pharma Stocks in India in January 2025: J B Chemicals, Caplin Point Labs, Laurus Labs and More – 5yr CAGR Basis

India is the largest provider of generic medicines world wide and is recognised for its low-cost vaccines and medicines. The Indian pharmaceutical industry is the third-largest in the world by production volume and has shown outstanding growth, with an average annual growth rate of 9.43% over the past nine years. This article explores some of the best pharmaceutical stocks in India for January 2025 based on their 5-year CAGR.

Overview of the Indian Pharma Industry

India is a key player in the global pharmaceutical sector, supplying over half of the world’s vaccines, 40% of the generic drugs in the US, and 25% of those in the UK. The domestic pharma industry includes nearly 3,000 drug companies and around 10,500 manufacturing units. A large pool of skilled scientists and engineers supports further advancements in this sector.

Indian companies supply over 80% of the antiretroviral drugs used globally to treat AIDS, earning the country the nickname “pharmacy of the world” due to its affordable, high-quality medicines. Globally, India ranks third in pharmaceutical production by volume and 14th by value, contributing about 1.72% to India’s GDP.

According to a report by EY and FICCI, the Indian pharmaceutical market is projected to grow to $130 billion by 2030. Meanwhile, the global pharmaceutical market is expected to surpass $1 trillion in 2023.

Best Pharma Sector Stock List In India In January 2025 – 5-Year CAGR Basis

Note: The list of top pharma stocks in India listed in the stock market here are selected from the Nifty 500 universe and sorted as per the 5-yr CAGR as of December 27, 2024. 

Overview of Best Pharma Company Stocks in India in January 2025

1. J.B. Chemicals and Pharmaceuticals Limited

J.B. Chemicals and Pharmaceuticals Limited (JBCPL) is a prominent player in India’s pharmaceutical industry. Known for its high-quality and affordable products, the company serves both domestic and international markets and enjoys strong trust and recognition among healthcare professionals worldwide.

In Q2 FY25, JBCPL reported a revenue of ₹955.76 crore, showing a slight increase from ₹952.31 crore in the June 2024 quarter. The company’s net profit for the September 2024 quarter stood at ₹173.12 crore, remaining nearly consistent with the ₹173.23 crore net profit recorded in the previous quarter.

Key metrics: 

• Earning per share (EPS): ₹38.64
• Return on equity (ROE): 19.01%

2. Caplin Point Laboratories Ltd

Caplin Point Laboratories Ltd specialises in producing and sourcing Active Pharmaceutical Ingredients (APIs) and finished medicines. The company also emphasises research, development, and clinical studies. It has a strong presence in markets such as Latin America, Africa, the USA, and other regions.

In Q2 FY25, the company reported revenue of ₹207.93 crore, an increase from ₹185.64 crore in the June 2024 quarter. Net profit for the September quarter rose significantly to ₹105.74 crore, compared to ₹72.54 crore in the previous quarter.

Key metrics: 

• EPS: ₹39.94
• ROE: 19.78%

3. Laurus Labs

Established in 2005, Laurus Labs is a research-focused pharmaceutical and biotechnology company recognised as a global leader in producing specific Active Pharmaceutical Ingredients (APIs) used in treatments for HIV, cancer, heart disease, and digestive disorders. The company also provides services such as contract manufacturing (CMO) and CDMO (contract development and manufacturing), supporting international clients in clinical drug development and large-scale production.

In Q2 FY25, Laurus Labs reported revenue of ₹1,184.85 crore, up from ₹1,116.93 crore in the June 2024 quarter. The company’s net profit also increased to ₹42.44 crore, compared to ₹28.78 crore in the previous quarter.

Key metrics: 

• EPS: ₹4.36
• ROE: 5.51%

4. Granules India Ltd

Granules India Ltd and its subsidiaries focus on producing and selling Active Pharmaceutical Ingredients (APIs), Pharmaceutical Formulation Intermediates (PFIs), and finished dosage medicines.

For the quarter ending September 2024, Granules India Ltd reported revenue of ₹567.99 crore and a net profit of ₹41.39 crore. This marks a decline from the June 2024 quarter, where the company recorded revenue of ₹851.95 crore and a net profit of ₹93.78 crore. 

Key metrics: 

• EPS: ₹15.48
• ROE: 11.68%

5. Glenmark Pharmaceuticals Ltd

Glenmark Pharmaceuticals is a global pharmaceutical company with a strong focus on research. It operates in over 80 countries and specialises in generics, speciality medicines, and over-the-counter (OTC) products.

For the quarter ending September 2024, Glenmark reported revenue of ₹2,636.10 crore, up from ₹2,329.54 crore in the June 2024 quarter. Net profit for the September quarter rose to ₹595.06 crore, an increase from ₹453.73 crore in the previous quarter.

Key metrics: 

• EPS: ₹199.94
• ROE: 23.56%

Key Points to Consider When Investing in Indian Pharma Stocks

1. Healthcare Infrastructure

The growth of healthcare facilities in India directly influences the pharmaceutical sector. As healthcare services expand, the demand for medicines and related products grows, creating more opportunities for pharmaceutical companies.

1. Demand Trends

Factors such as an ageing population, increased spending in healthcare, and the rise of diseases drive the demand for pharmaceutical products. Evaluating both current and future demand is essential to gauge the growth potential of pharma stocks.

1. Competition and Mergers

The pharma industry is highly competitive. Companies often rely on mergers and acquisitions to maintain or improve their market position. Assessing a company’s competitive standing, growth prospects, and recent stock performance is vital before investing.

1. Research and Development (R&D)

Significant investments in R&D are critical for developing new drugs and treatments. Reviewing a company’s R&D spending and product pipeline can help determine if they are working on innovative and promising solutions.

Conclusion

Pharmaceutical industry in India plays a crucial role in the country’s exports and offers substantial investment potential. However, investors should also be aware of risks like regulatory changes that could impact pricing or exports, especially in key markets like the US. Regulatory scrutiny, FDA inspections, and currency fluctuations can also affect revenues and stock performance, as the industry relies heavily on exports. Balancing these opportunities and risks is essential when investing in pharma stocks.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.