Best Pharma Stocks to Buy in 2025

Pharma stocks in India are the shares of companies that produce generic drugs and medications. These organisations generally work in various industries, such as branded generics, biotechnology, active pharmaceutical ingredients (APIs), and CRAMS (Contract Research and Manufacturing Services). In terms of health and wellness, India accounts for around 50% of the world’s vaccine supply.

Overview of the Pharma Sector in India

India is home to the largest pharmaceutical companies worldwide. These companies manufacture medications to treat a range of ailments. The pharma sector in India, known as “Global Pharmacy,” is a leader in innovation. From 2020 to 2030, the pharmaceutical industry in India is currently valued at $50 billion and is projected to grow at a CAGR (Compound Annual Growth Rate) of 12.3%. It will involve pharmaceutical companies undergoing digital transformation and improving operational efficiency.

India is the third-largest pharmaceutical producer in terms of volume and the 13th in terms of value. The country produces around 50% of the global pharmaceutical products. In addition, the GOI (Government of India) launched numerous initiatives to strengthen the industry. These include PMBJP (Pradhan Mantri Bhartiya Janaushadhi Priyojana), the Promotion of Bulk Drug Parks Scheme, and PTUAS (Pharmaceutical Technology Upgradation Assistance Scheme).

Best Pharma Stocks in India 2025 by Market Capitalisation

We have tabulated the best pharma stocks to buy in 2025 with their LTP (Last Traded Price), Market capitalisation, 52-week high and low. Explore the table to identify the best pharma sector stocks to invest in.

*Data is updated as of 8th November 2024. 

Overview of Pharma Stocks to Buy in 2025

1. Sun Pharmaceutical Industries Ltd.

Since its founding in 1983, Sun Pharmaceutical Industries Ltd. has continued to expand its product segment of generic drugs. Today, this organisation is one of the largest pharmaceutical companies worldwide. The market capitalisation of this one of the best pharma stocks in India stands at INR 4,33,000 crores, and its price-to-equity (PE) ratio is 39.19.

In June 2024, the company successfully acquired Taro Pharmaceutical Industries by paying around $347 million. Dilip Shanghvi (Chairman and Managing Director of Sun Pharma) claimed that this merger will leverage the strengths of both organisations in the market.

2. Divis Laboratories Ltd.

It is a Hyderabad-based MNC producing active pharmaceutical ingredients (APIs) and intermediates. It was established in 1990 and ranks among the top three API manufacturers today. The company currently holds around 60% to 85% of the global market share for drugs like dextromethorphan, gabapentin, and naproxen.

It is one of the best pharmaceutical companies, with a market capitalisation of INR 1,57,000 crores and a price-to-equity ratio (PE) of 92.58. The impeccable approach of the company to research and develop the products places it well for investors looking for the best pharma stocks in India.

3. Cipla Ltd.

This Mumbai-based company was founded by Khwaja Abdul Hamied in 1935. It developed generic drugs for cardiovascular diseases, diabetes, paediatrics, arthritis, depression, respiratory diseases, and more. Cipla is strong in cardiovascular areas and has a considerable collection of generic drugs. Its market capitalisation is INR 1,29,000 crores, and its price-to-equity (PE) ratio is 27.99, making it one of the potential pharma sector stocks.

Cipla Ltd. acquired Ivia Beaute Pvt. Ltd., a cosmetics brand, for INR 130 crores and claimed that this acquisition would help the business grow in the upcoming competitive landscape.

4. Torrent Pharmaceuticals Ltd. 

Torrent Pharmaceuticals Ltd. was founded in 1959 as Trinity Laboratories and operates in over 40 countries. The organisation is working with different services, such as generic drugs, formulas, and active pharmaceutical ingredients (APIs). Investors can consider this one of the best pharma stocks to buy due to its excellent managerial capabilities.

The market capitalisation of this one of the leading pharmaceutical companies is INR 1,08,000 crores, and its price-to-equity (PE) ratio is 59.64. Recently, Torrent offered around 83 lakh shares to raise around INR 2,496.9 crores. Promoters claimed that this fund would be used to enhance the company’s performance and competitiveness in the pharma industry.

5. Dr Reddy’s Laboratories Ltd. 

Dr Reddy’s Laboratoies Ltd. is a Hyderabad-based MNC founded in 1984. The company offers diverse products, such as generic drugs, biosimilars, custom pharmaceutical services, and active pharmaceutical ingredients (APIs).

The market capitalisation of Dr Reddy’s Laboratories Ltd. is INR 1,07,000 crores, and the price-to-equity (PE) ratio is 20.11. Its strong fundamentals and exclusive product segment made it one of the best pharma stocks in India. 

Dr Reddy’s Laboratories Ltd. aims to develop about 15 GLP-1 drugs for the treatment of obesity and diabetes. This will significantly impact the company’s performance and profitability in the global pharma sector. 

6. Mankind Pharma Ltd. 

Mankind Pharma Ltd. is another healthcare product MNC founded in 1991 and headquartered in Delhi, India. The company manufactures active pharmaceutical ingredients (APIs) and has products in therapeutic areas such as gastrointestinal, antibiotics, cardiovascular, etc.

Mankind Pharma Ltd. is one of the best pharma sector stocks in India. It has a market capitalisation of INR 1,06,000 crores and a price-to-equity (PE) ratio of 50.40. The Delhi High Court finally granted relief to Mankind Pharma Ltd. in a trademark infringement case against Aquakind, which will result in an upside movement of its share price on Dalal Street.

7. Aurobindo Pharma Ltd.

Aurobindo Pharma Ltd. was founded in 1986 and is one of the leading pharmaceutical companies for active pharmaceutical ingredients (APIs) and therapeutic segments. These include neuroscience, cardiovascular, antidiabetics, and more.

The market capitalisation of this one of the best pharma sector stocks in India is INR 76,960 crores, and its price-to-equity (PE) ratio is 21.35. Recently, in May 2024, TheraNym Biologics, a wholly-owned subsidiary of this pharmaceutical company, signed a pact with MSD to manufacture and supply biologicals. Experts acclaimed that this contract will help Aurobindo Pharma Ltd. give its investors a potential return in the long term.

8. Alkem Laboratories Ltd.

Alkem Laboratories Ltd. is a Mumbai-based pharmaceutical company manufacturing and selling generics, active pharmaceutical ingredients (APIs), formulations, and nutraceuticals. With its business footprints in 40 countries and 19 manufacturing units, the company has given its investors an impressive percentage of returns. The market capitalisation of this pharma stock in India is INR 68,090 crores, and currently, it is trading with a price-to-equity (PE) ratio of 32.59.

9. Glenmark Pharmaceuticals Ltd.

Glenmark Pharmaceuticals Ltd. is a Mumbai-based organisation founded in 1977. It is a global pharma company operating in areas such as dermatology, oncology, and respiratory. The market capitalisation of this stock is INR 47,000 crores, and its price-to-equity (PE) ratio is -35.84.

In January 2024, this organisation collaborated with its subsidiary company, Ichnos Glenmark Innovation, to accelerate cancer treatments. This collaboration will provide the company with a robust opportunity to sustain a competitive edge in the pharmaceutical industry.

10. IPCA Laboratories Ltd.

IPCA Laboratories Ltd., formerly The Indian Pharmaceutical Combine Association Ltd, was incorporated in 1949. The primary aim of this organisation is to manufacture and sell active pharmaceutical ingredients (APIs). It is considered the 18th largest pharmaceutical company in India (India Ratings and Research).  The market share of this company is 1.9%, and it has over 160 brands in its portfolio.

The market capitalisation of this one of the best pharma stocks in India is INR 39,430 crores, and it is currently trading with a price-to-equity (PE) ratio of 67.26. In August 2024, IPCA Laboratories Ltd. launched its Diulus to treat Diabetic Foot Ulcers in the country. The management professionals of this company expect that this launch will increase their profitability in the future.

Best Pharma Sector Stocks Based On 1-Year Returns

Experts claim that the best pharma stocks in India can give more than 100% returns in a year as the industry is expected to grow with a CAGR of 12% to 14%. Here is the segregation of the best pharma sector stocks on the basis of the returns from the previous year. 

*Data is updated as of 8th November 2024.

Dividend Yield in Best Pharma Stocks in India

In this table, we’ve categorised the major pharma stocks in India with their dividend yield percentage. Explore to understand better. 

*Data is updated as of 8th November 2024. 

Factors to Consider When Investing in Pharma Sector Stocks

Investing in pharma sector stocks is quite reasonable for building wealth. But, investors must consider some crucial factors to make a diversified portfolio. Let’s explore such factors together.

1. Market Demand

Ageing populations, disease prevalence, and healthcare spending are the major factors impacting the demand for pharmaceutical products. Investors must assess and evaluate the emerging and future demand for drugs and vaccinations to analyse the growth prospects of pharmaceutical companies. 

2. Global Health Issues

Beware of global health issues that could considerably impact the demand and supply of pharmaceutical products. For example, during the pandemic (COVID-19), the demand for Pfizer-BioNTech has increased in the global pharma industry. Investors assess such issues to identify the best pharma stocks in India to generate higher returns. 

3. Patent Expiration

Pharmaceutical companies with exclusive rights to manufacture and sell products are considered more trustworthy. Whether an investor is experienced or new to the share market, patent expiration must be considered a significant factor when investing in pharma sector stocks. Patent expiration might lead to increased competition and affect the organisation’s market share and profitability.

4. Regulatory Environment

The pharmaceutical sector is subject to strict regulation, which might impact an organisation’s ability to develop new products. Pharma stocks investors must be aware of regulatory changes or alterations that could affect the industry. A close eye on the regulatory landscape could help investors anticipate challenges and opportunities within the industry. 

Winding Up

In conclusion, investing in pharma sector stocks often provides impeccable wealth-building opportunities to investors. Growing demand for healthcare and pharmaceutical products continuously promoted the pharma stocks to buy. India is a hub for companies operating in various areas, such as branded generics, active pharmaceutical ingredients (APIs), biotechnology, and CARMS. Invest with Univest, a stock advisory company, to generate higher possible returns on your investment. 

Frequently Asked Questions

1. What are the best pharma stocks to buy in 2025?

Ans. Here are some of the best pharma stocks in India to buy in 2025.

• Mankind Pharma Ltd. 
• Divis Laboratories Ltd.
• Cipla Ltd. 
• Sun Pharmaceuticals Ltd. 
• Torrent Pharmaceuticals Ltd.

2. Who should invest in pharma stocks in India?

Ans. Investors seeking defensive investment opportunities and willing to invest in the healthcare industry can consider the best pharma stocks in India to generate maximum returns. If you are a long-term investor, consider investing in pharma companies as they align with your goals and risk tolerance behaviour.

3. What factors should be considered when investing in pharma sector stocks?

Ans. Investing in pharma sector stocks is beneficial for wealth generation. But, one must consider some of the factors. These include regulatory frameworks, market demand, patent expiration, and global health issues.

4. Are pharma stocks in India risky?

Ans. The long and expensive product development procedures of pharma companies make it risky for some investors. But, for investors with a long-term perspective and who believe in high-risk, high-reward play, pharma stocks could be the best among others.