- Date : 22/08/2023
- Read: 3 mins
A look at some of the promising pharma stocks in India that you can consider for your long-term investment.
If you look at the Nifty Pharma Index, you will notice that it has climbed more than 3000 points in the last three months. Let us identify some of the best stocks in the sector for investment.
The Pharma sector has witnessed a strong performance in the last six months
Nifty pharma companies like Sun Pharma, Dr Reddy’s and Cipla are tipped for long-term return
This sector is expected to deliver good growth in the coming years
Investors must monitor news on licenses, orders and innovations related to their pharma stock
Sun Pharma –
This pharma sector behemoth specialises in generic formulations and speciality medicines. The stock has delivered strong returns – 78.3% in five years, 112% in three years and 28.66% in one year. Its dividend yield is 1.02 and its earning per share (EPS) has increased from 13.6 to 35.3 in the last financial year.
Divis Lab –
This company is engaged in the production of active pharma ingredients and nutraceuticals and has a strong export order book. The stock has maintained a 50+ EPS in the last five years. Although its stock return in the last three years has been lukewarm, it gave a handsome five-year return of 193%. The stock has grown by over Rs 800 to cross Rs 3,650 per share in the last 6 months.
Dr Reddy’s Labs –
The company produces generic medicines, active ingredients, proprietary products, etc. It has delivered consistent returns of 41% in one year, 30% in two years, 32% in three years, and 146% in the last five years. Its EPS has been 117 or more in each of the last five years, doubling to 271 in the last fiscal.
Another well-known company in this industry, Cipla manufactures active pharma ingredients and generics and is also involved in biosimilars, consumer healthcare and speciality medicines. There is a steady increase in EPS from 19 to 34 in the last five years. The stock return has been consistent as well, with a 19.5% return last year, 37% in two years, 61% in three years, and 88% in the last five years.
Syngene International –
A dark horse on this list, Syngene has been on the ascendancy in recent times. The company is engaged in R&D and the production of global pharmaceuticals, biotechnology, nutrition, and animal health products. Its return last year was nearly 40%, with 30% in two years, 70% in three years, and 174% in five years. It has maintained a steady EPS of around 10 in the last five years.
A 10-11% growth is expected in the pharma sector in the current financial year. The industry is expected to grow to a market size of $130 billion by 2030. Therefore, investors should consider pharma stocks as a part of their long-term portfolio.
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Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.