Best Healthcare Stocks in India 2025

We are waking up to a world of opportunities by 2025 because the healthcare sector in India is expected to grow with a CAGR of 22% to 23%. The industry has been fueled by elements such as the acceleration of digitalised health solutions, the prevalence of chronic diseases, the ageing population, and many more. Whether you are a beginner to the stock market or an experienced investor, 2025 is ready to bring strategic moves in the healthcare industry. Let’s explore everything related to the top healthcare stocks in India to take advantage of this impeccable opportunity. 

What are Healthcare Stocks?

Healthcare stocks represent the shares of business enterprises that develop and distribute medicines, generic drugs, and other types of equipment. Growing demand for healthcare services in the country grabs the attention of investors to invest in this promising industry. To make a diversified investment portfolio in the healthcare sector in India, one should conduct thorough research on the businesses sustaining a competitive edge in the market. Here are some healthcare stocks in India, as per their market capitalisation, encouraging investors to boost their wealth generation. 

Healthcare Stocks List By Market Capitalisation

*Data is updated as of 14th November 2024

Things to Consider When Investing in Healthcare Stocks

Investing in healthcare sector stocks is good. However, it also comes with multiple risks and can be affected by stock market volatility. To safeguard against such risk factors, one must consider multiple factors to invest in. Let’s explore them together. 

1. Fundamental Analysis

When investing in healthcare stocks, one should assess the company’s financials and fundamentals to achieve its vision and mission. To identify the fundamentally strong healthcare stocks in India, you can consider the growth in revenue, profitability, and sales of the company. Also, you can track indicators such as the PE (price-to-earnings) ratio, EPS (earning per share), live charts, and more. 

2. Emerging/Upcoming Trends

Trends related to changes in technology, consumer behaviour, evolving treatments, etc. can impact stock prices somewhere. Stay up-to-date on the emerging and upcoming trends related to the healthcare industry to assess their impacts on the stock market. Any shift in the market can impact the prices of the best healthcare stocks in India.  

3. Regulatory Frameworks

Numerous laws and regulations are available to prevent mishaps in the healthcare industry, such as the Drugs (Control) Act, Mental Healthcare Act of 2017, Medical Termination of Pregnancy Act of 1971, and privacy rules. Investors of the best healthcare sector stocks in India should assess such rules/regulations and analyse how companies are meeting such compliances to operate smoothly. 

4. Government Initiatives

Have a close eye on government initiatives to promote healthcare services in India. For example, the government launched Ayushman Bharat Digital Missio to build a digital health ecosystem. With the help of Ayushman Cards, people can get cashless treatments. The government will pay hospitals directly, which will boost the sales of healthcare companies in India. Likewise, there are several other initiatives added to the bucket list of the government. Conduct your own research to identify their impact on healthcare stocks.

Healthcare Stocks Based on 1-Year Returns

*Data is updated as of 14th November 2024

Dividend Yield in Healthcare Stocks in 2024

The dividend is not part of capital appreciation. It is a kind of regular income that investors can earn with their investments. In this table, we’ve included some of India’s healthcare sector stocks with their percentage dividend yield. 

*Data is updated as of 14th November 2024

Benefits of Investing in Healthcare Stocks in India

Investing in healthcare stocks could be a stepping stone for investors seeking higher returns over a longer period. Here is how. 

1. Growth Potential

Steady growth opportunities for healthcare services offer investors the benefit of growth potential in the stocks. It is expected that the healthcare sector in India will reach more than $610 billion by 2026 with a CAGR of 22% to 23%. Thus, it is a stepping stone for investors looking to invest in potential opportunities. 

2. Stable Demand

Inelastic prices of healthcare services made their demand stable in nature. As the changes in price do not alter demand significantly. Moreover, stable demand helps businesses to generate higher revenue from the market. This might lead to the growth of businesses, which will later provide higher returns to the investors. 

3. Dividend Yield

Dividends are not part of capital appreciation for investors. It is the part of the company’s profitability that could help investors manage daily expenses. Healthcare sector stocks in India often announce high dividend payouts. For instance, Cipla Ltd. has declared around 26 dividends since August 2001. The dividend yield of this organisation is 0.88%. 

4. Government Support

The healthcare sector in India is backed by government policies and support. Many initiatives have been implemented to promote this promising sector. These include PTUAS (Pharmaceutical Technology, Upgradation Assistance Scheme), PMBJP (Pradhan Mantri Bhartiya Janaushadhi Priyojana), and more. With the best healthcare stocks in India, you can get government support to generate higher possible returns. 

Trends Affecting Best Healthcare Stocks in India

As discussed earlier, investors should conduct research to assess a stock’s performance and capabilities and ensure the highest possible returns. 

1. Ageing Population

The rapidly ageing population of India increases diseases such as diabetes, heart attacks, cancer, and more. The best healthcare stocks in India, such as Dr Reddy’s Laboratories Ltd., Sun Pharmaceuticals Industries Ltd., and Fortis Healthcare Ltd., will benefit the ageing population by offering treatments for such diseases. 

2. Biosimilars

These are identical copies of biological drugs that are affordable and effective. India has a prominent biotech sector. Companies like Dr Reddy’s Laboratories Ltd. is significantly investing in biosimilars and biotechnology pipelines. It will poise them to gain long-term growth in the market, and experts are claiming that they could generate higher returns in the coming years. 

3. Increased FDI 

FDI (foreign direct investment) is a cross-border investment. The Government of India (GOI) has provided relief to foreign investors by allowing up to 100% FDI in India’s hospitals and pharmaceuticals. Increased FDI will likely offer expansion to the best healthcare stocks, such as Fortis Healthcare Ltd. and Apollo Hospitals Enterprises Ltd. Increased competition in the healthcare sector in India will also drive the growth of the economy.   

4. Digital Health Revolution

Telemedicine and AI-driven diagnostics are reshaping the healthcare system of India. As accelerated by COVID-19, these digital transformations would benefit companies like Apollo Hospitals, Medanta, and more. Investors prefer to consider a well-positioned organisation to make informed investment decisions.

Key Points

• The healthcare sector in India is projected to reach $610 billion by 2026. 
• In the past few years, India’s healthcare industry has grown with a CAGR of 22%. 
• Investing in healthcare sector stocks could build investor’s wealth in the long term.
• Sun Pharmaceuticals Ltd. is a healthcare sector stock with the highest market capitalisation of INR 4,25,000 crores.
• Fortis Healthcare Ltd. provided around 78.10% returns in the past year.  
• To make a diversified investment portfolio, one can seek professional guidance with the Univest Application. 

FAQs

1. Why invest in healthcare sector stocks in 2024?

Ans. India ranks third in terms of healthcare production and handles around 50% of vaccination production worldwide. 2024 is about to end, and India is still projected to reach around $610 billion by 2027. Thus, investing in healthcare sector stocks could generate higher returns in the stock market.

2. What is the market value of the healthcare sector in India?

Ans. In 2023, the healthcare sector in India was valued at around $372 billion. The analysts acclaimed that it is expected to grow with a CAGR of 22% to 23% in the coming years and reach $610 billion by 2026. 

3. Which is the biggest healthcare company in India?

Ans. Sun Pharmaceuticals Industries Ltd. is the largest pharmaceutical company in India, with a market capitalisation of INR 4,25,000 crores. The current market price of this healthcare sector stock is INR 1,770.00. 

4. What are the best healthcare stocks in India?

Ans. Here are some of the best healthcare stocks in India with analyst ratings. 

*Data is updated as of 14th November 2024

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