Top Healthcare Stocks in India

Posted by : Ketan Sonalkar | Tue May 07 2024

Top Healthcare Stocks in India

Healthcare Stocks in India

When thinking of healthcare, the first thing that comes to mind is hospitals. However, the healthcare sector encompasses much more than that. Did you know that besides maintaining good health you can actually make money from it.? 

The healthcare sector of India has evolved significantly over time, experiencing exponential growth and presenting numerous investment opportunities. The stocks in this sector are like the heartbeat of the industry- steady and reliable, and promising long-term growth and stability. In this blog explore healthcare stocks, the top healthcare stocks in India reasons to consider investing, and expert tips to guide you. 

Healthcare Sector Overview  

The healthcare sector in India has evolved rapidly over the past decade, driven by various factors such as increasing healthcare awareness, rising income levels, and government initiatives to improve healthcare infrastructure. According to a report by Research and Markets, the healthcare sector in India is expected to grow at a CAGR of 22.87% from 2021 to 2026, indicating strong growth potential.

The hospital industry is projected to grow at a rate of 16-17% in the coming year. India boasts the world’s largest government-supported Health Insurance Scheme known as Ayushman Bharat. These factors indicate significant growth opportunities in the industry, making it an attractive option for investment.

Immune Your Portfolio With Healthcare Sector Stocks 

In the ever-evolving landscape of healthcare, services play an important role in ensuring access to quality care.  The stocks can add a valuable addition to your portfolio. 

Here are the 5 Healthcare Stocks in India:

S.no Stocks Name Market Capitalization(in Cr) P/E Ratio 5 Years Returns (%)
1. Apollo Hospitals Enterprise Ltd. 87,150.8 110.41 404.17
2. Max Healthcare Institute Ltd. 80,804.8 76.45 620.54
3. Fortis Healthcare Ltd. 34,862.2 63.01 239.45
4. Narayana Hrudayalaya Ltd. 25,898 33.56 556.97
5. Dr. Lal Pathlabs Ltd. 19,532.6 59.21 130.86
  • Apollo Hospitals Enterprise Ltd: Apollo Hospitals is one of the largest healthcare providers in India, offering a wide range of healthcare services, including hospitals, clinics, and pharmacies.
  • Max Healthcare Institute Ltd: Max Healthcare is a leading healthcare provider in India, known for its high-quality healthcare services and state-of-the-art facilities.
  • Fortis Healthcare Ltd: Fortis Healthcare is a leading healthcare provider in India, offering a wide range of healthcare services, including hospitals, diagnostics, and daycare specialty facilities.
  • Narayana Hrudayalaya Ltd: Narayana Hrudayalaya is one of the largest healthcare providers in India, specializing in cardiac care and other specialties.
  • Dr. Lal Pathlabs Ltd: Dr. Lal Pathlabs is a leading diagnostics company in India, offering a wide range of diagnostic services, including pathology and radiology.

Factors Driving Growth in the Healthcare Sector

Several factors are driving growth in the healthcare sector in India, including:

  • Emerging Trends: Emerging trends in the healthcare sector such as personalized medicine, digital health, and AI integration in healthcare are gaining attraction in India. These trends can offer even more new investment opportunities in providing innovative healthcare solutions. 
  • Government Initiatives: The Indian government is actively contributing to the healthcare sector by launching various initiatives like the National Health Mission (NHM) and Ayushmann Bharat. These initiatives aim to provide health insurance coverage to over 500 million people. That’s a big number! It will help to create a substantial market for healthcare services and products as well. 
  • COVID-19: It has increased and highlighted the importance of healthcare and accelerated digital health adoption in India. All these things overall boost the demand and investors’ interest in the healthcare sector.
  • Healthcare Spending: India’s healthcare spending is expected to increase significantly from the past year’s record because of the increasing health awareness, rising income levels, and government initiatives to improve the healthcare infrastructure.
  • The healthcare sector in India can offer attractive investment opportunities with the sector expected to grow at a CAGR of 22.87% from 2021 to 26 according to a report by Research Markets.

Other Top Nifty Healthcare Stocks

S.no Stocks Name Market Capitalization(in Cr) P/E Ratio 5 Years Returns (%)
1. Global Health Ltd. 37,645 83.31 237.41
2. Aster DM Healthcare Ltd. 17,198 53.07 137.60
3. Krishna Institute of Medical Sciences Ltd. 16,442.91 48.66 106.49
4. Poly Medicure Ltd. 15,676 63.03 719.85
5. Rainbow Children’s Medicare Ltd. 16,046.16 73.14 222.07
6. Metropolis Healthcare Ltd. 9,259.4 74.21 89.60
7. Jupiter Life Line Hospitals Ltd. 8,203.6 112.52 15.68
8. Vijaya Diagnostic Centre Ltd. 6,938.8 61.48 7.41
9. Healthcare Global Enterprises Ltd. 5,184.4 147.07 87.95
10. Thyrocare Technologies Ltd. 3,287 50.12 33.47

Types of Healthcare Sector Stocks 

  • Pharmaceutical companies: The healthcare sector stocks of  Pharmaceutical industries represent the companies that are involved in the research, development, manufacturing, and marketing of pharmaceutical drugs. The top players in these industries are Sun Pharmaceutical Industries Ltd which is one of India’s largest pharmaceutical companies, mainly focusing on generics and innovative research. Other players leading in this industry are;  Cipla Ltd and Dr. Reddy’s Laboratories Ltd.
  • Biotechnological companies: The companies in this sector are known for their biological systems and products for human health and treat diseases such as cancer and genetic disorders like diabetes etc. The top healthcare sector stocks include Bharat Biotech International Ltd.
  • Healthcare Services Providers: This sector provides services such as hospitals, clinics, and nursing homes, generating revenue from patient care services mainly. Top players include Fortis Healthcare Ltd and Apollo Hospitals Enterprise Ltd.
  • Health Insurance Companies: These companies provide healthcare insurance coverage to individuals and groups and are surely the best sector to invest in top healthcare sector stocks. Top companies include ICICI Lombard General Insurance Company and HDFC ERGO General Insurance Company.

Benefits of Investing in Healthcare Stocks  

Well, there are many reasons for you to decide to invest in the healthcare sector in India and some of them are listed below.

Healthcare stocks in India Benefits

  • Consistent Demand: The demand for the healthcare sector is consistent and is not influenced by economic conditions. Thus the healthcare sector is less volatile compared to others. 
  • Growth opportunities: The healthcare sector is expanding especially after the After covid pandemic. with growing population ages and the prevailing chronic diseases, this sector can provide long-term growth opportunities for investors as well. So this is a sector in which you can consider investing.
  • Diversification: Of course, adding a healthcare stock to a portfolio can help diversify risk, especially when other sectors are underperforming because the sector as compared to others is less volatile and has more growth opportunities in the upcoming time
  • Innovations and profits: With the increasing demand for healthcare services, healthcare companies are constantly developing new drugs, treatments, and medical devices to meet the needs of their patients and provide the best medical services. This can ultimately lead to significant profits for investors if these innovations are successful.

Factors Affecting Healthcare Sector Stocks 

While all the reasons to invest in the healthcare sector seem sound and convincing to investors, there are some factors that must be kept in mind before investing in healthcare stocks, such as:

  • The changes in the healthcare regulations, for example, drug approvals, the pricing policies, and the reforms in the healthcare sectors. All this can significantly impact the healthcare sector stocks. 
  • While companies are constantly innovating and improving to cater to the needs of patients, this can have a negative impact as well, as it can disrupt existing business models and affect stock prices.
  • The competition in the healthcare market sector is constantly increasing, which affects pricing, market share, and profitability, ultimately impacting overall stock performance.
  • The drug pipeline is the process by which pharmaceutical companies develop and bring new drugs to the market. The success or failure of the introduction of these drugs can have a significant impact on the company’s stock price.

Investment Tips For Healthcare Sector Stocks 

  • Research: Conduct thorough research on the healthcare sector stocks and individual companies before investing to understand their business models, growth prospects, and competitive landscape.
  • Diversification: Diversify your healthcare sector stock portfolio to reduce risk and maximize returns. Consider investing in a mix of healthcare providers, pharmaceutical companies, and medical technology companies.
  • Long-term Perspective: Top healthcare sector stocks are known for their long-term growth potential, so it is important to have a long-term perspective when investing in them.
  • Monitor Regulatory Environment: The best healthcare sector is highly regulated, so it is important to stay informed about changes in regulations that could impact healthcare sector stocks.
  • If you are unsure about investing in healthcare stocks, consider consulting with a financial advisor who can provide you with expert advice tailored to your investment goals and risk tolerance.

Conclusion: 

Investing in the healthcare sector in India is not just about personal financial gains; it’s about investing in and promoting the health and well-being of millions. These stocks represent more than just numbers on a screen; they are stories of innovation and hope. With a little effort, we can take a step towards faith and invest in the healing power of healthcare stocks in India. After all, a healthy portfolio is the ultimate prescription for success.

FAQs

  • Why should I consider investing in healthcare stocks in India?

Investing in healthcare stocks in India not only offers the potential for financial gains but also contributes to the health and well-being of millions. The sector is experiencing rapid growth and presents numerous investment opportunities. By investing in companies that are pioneering new technologies and treatments in healthcare, you can support innovation and contribute to advancements in the field.

  • What makes healthcare stocks different from other sectors?

Healthcare stocks are known for their stability and long-term growth potential. They are less influenced by economic conditions and offer consistent demand, making them a valuable addition to any investment portfolio.

  • How can I mitigate risks when investing in healthcare stocks?

Diversifying your healthcare stock portfolio and staying informed about changes in regulations that could impact the sector can help mitigate risks associated with investing in healthcare stocks. Following industry news, staying informed about regulatory changes, and consulting with a financial advisor can help you stay updated with the latest developments in the healthcare sector.

  • How can investing in healthcare stocks be a form of impact investing?

Impact investing is a term that means investing in companies that aim to generate a measurable, beneficial social or environmental impact alongside a financial return. Therefore  Investing in healthcare stocks can align with this goal by supporting companies that improve health outcomes and address healthcare disparities.

Disclaimer: This is for general information and education purposes only. The Securities quoted (if any) are for illustration only and are not recommendatory. Past performance does not guarantee any future returns. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. For more details/disclosures, visit univest/univest mobile application.

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