Pharmaceuticals Stocks

India holds a significant role in the global pharmaceutical landscape, being a key provider of affordable generic drugs and vaccines. The country’s pharmaceutical industry has grown substantially, ranking 3rd in production volume globally, with a steady annual growth rate of 9.43% over the past 9 years.

Notably, India boasts the highest number of pharmaceutical manufacturing facilities compliant with the US Food and Drug Administration (USFDA), with 500 API producers contributing to 8% of the global API market. The Indian pharmaceutical sector is crucial in meeting global healthcare demands, supplying over 50% of global vaccine needs, 40% of generic drugs in the US, and 25% of medicines in the UK.

Domestically, the industry comprises a network of 3,000 drug companies and approximately 10,500 manufacturing units. India’s pharmaceutical prowess extends to its contribution to the global fight against AIDS, with over 80% of antiretroviral drugs used worldwide sourced from Indian pharmaceutical firms.

As of 2021, the pharmaceutical sector contributes approximately 1.72% to India’s Gross Domestic Product (GDP). With a large pool of talented scientists and engineers, India has the potential to propel the pharmaceutical industry to greater heights. Recognised as the “pharmacy of the world,” India’s reputation is built on the combination of low-cost production and high-quality medicines.

India’s pharmaceutical sector stands as a cornerstone in the global healthcare landscape, renowned for its affordable generic drugs and vaccines. With the 3rd highest production volume globally and a steady growth rate, India supplies over 50% of global vaccine needs and 40% of generic drugs in the US. The sector contributes significantly to India’s GDP and exports, valued at $190 billion. Forecasts predict a doubling of the industry to approximately US$ 130 billion by 2030, with investments exceeding $87 billion. Before investing, assess regulatory compliance, R&D focus, product diversification, and global presence. J B Chemicals and Pharmaceuticals Ltd emerges as a top investment choice with a robust 5-year CAGR of 61.20%.

The pharmaceutical industry in India is set to reach around US$ 65 billion by 2024 and is expected to double to approximately US$ 130 billion by 2030. This sector plays a crucial role in India’s global trade and is an attractive investment opportunity.

India is a major supplier of affordable generic medications worldwide, with numerous facilities adhering to international quality standards such as Good Manufacturing Practices (GMP) outlined by WHO and USFDA. India has consistently been the leading producer of pharmaceuticals globally.

Over the next 5years, medicine spending in India is anticipated to grow at a rate of 9-12%, positioning the country among the top 10 globally for pharmaceutical expenditure. Future growth in domestic sales will hinge on companies aligning their product offerings with the increasing prevalence of chronic diseases like cardiovascular issues, diabetes, depression, and cancer.

To support this growth, the Indian Government has implemented various measures to reduce healthcare costs, making it an encouraging environment for investors and businesses in the pharmaceutical sector.

Before investing in the pharmaceuticals sector, several important factors should be considered:

• Regulatory Compliance: Check if the pharmaceutical companies adhere to international regulatory standards such as Good Manufacturing Practices (GMP), set by organisations like the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA). Compliance ensures product quality and market acceptance.

• Research and Development (R&D): Assess the company’s commitment to research and development. A robust R&D pipeline indicates future growth potential and the ability to bring innovative drugs to the market.

• Product Diversification: Look for companies with a diversified product portfolio. This helps mitigate risks associated with reliance on a single product and positions the company to address a broader range of medical conditions.

• Global Presence: Evaluate the company’s global market presence. International exposure can provide opportunities for expansion and revenue growth but also exposes the company to currency and geopolitical risks.

• Government Policies and Healthcare Initiatives: Stay informed about government policies and healthcare initiatives, as they can significantly impact the pharmaceutical industry. Subsidies, incentives, or regulatory changes can influence company performance.

• Financial Health: Analyse the financial health of the company, including profitability, debt levels, and cash flow. A financially stable company is better positioned to weather market fluctuations.

• Intellectual Property Challenges: Be aware of any ongoing or potential intellectual property challenges the company may face. Legal disputes over patents can impact the company’s financial stability and market position.

• Supply Chain Resilience: Assess the resilience of the company’s supply chain, especially considering the global nature of pharmaceutical manufacturing. Dependence on specific suppliers or regions can pose risks to the continuity of operations.

• Ethical Practices: Consider the company’s commitment to ethical business practices. Transparency, ethical conduct, and a strong corporate governance structure are essential for long-term sustainability and investor confidence.

• Market Access and Distribution Channels: Evaluate the company’s market access and distribution channels. A strong network ensures efficient delivery of products to consumers and healthcare providers.

To invest in sector stocks via Angel One, follow these steps:

• Log in to your Angel One account.
• Click on the search icon and look for your desired pharmaceutical sector stock.
• Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
• To complete your transaction, click on the ‘Buy’ button.

You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’