In the upcoming decade, the Indian pharmaceutical sector is poised for significant growth, with experts projecting a robust Compound Annual Growth Rate (CAGR) of 12%. In this article, we’ve carefully curated a selection of the ten pharmaceutical stocks to watch within this thriving industry.
The Context
It’s a fascinating tale of how the Indian pharmaceutical industry has grown and developed. India has had the uncommon honor historically of having six acknowledged medical systems.
They are Naturopathy, Homoeopathy, Yoga, Siddha, and Unani.
Our nation has long been renowned for both contemporary and traditional medical practices, including Ayurveda, one of the oldest natural medical systems in the world. The seventh system, or Allopathy, which currently dominates the international markets, was accepted as a result of technological advancements.
India have already matured as a global leader in this area too!
This is only one of the reasons why individuals from all over the world want to travel to India for treatment of their joint problems, heart diseases, or other illnesses. In 1911, the colonial patent law restricted the Indian market to British industry resulting in muted growth.
A large majority of drugs were imported from abroad until the Patents Act of 1970, which brought a turnaround. The Patents Act of 1970 allowed pharmaceutical companies to patent their drug-making technique locally.
The patents had a seven-year shelf life. In 1994, India became a signatory to GATT, which brought about several progressive changes in the Indian pharmaceutical sector. In the early years of the twenty-first century, India emerged as a highly advanced and effective pharmaceutical player. Our nation generates a sizable amount of work while offering vital medications at reasonable prices.
Surprisingly, more than 90% of the modern medicine used in India is made locally. Apart from being a local producer and supplier, India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 50 percent of the global demand for various vaccines.
The numbers stand solid at 40 percent of generic demand in the US, and 25 percent of all medicine in the UK.
Globally, India ranks 3rd in terms of pharmaceutical production by volume and 14th by value. The domestic pharmaceutical industry includes a massive network of about 3,000 drug companies and over 10,500 manufacturing units. Without question, India holds a significant place in the global medicines industry. Our nation also possesses a sizable pool of scientists and engineers who can propel this sector to incredible heights.
Currently, Indian pharmaceutical companies provide more than 80% of the antiretroviral medications needed to combat AIDS (Acquired Immune Deficiency Syndrome) throughout the world. Given the ongoing awareness and global need for re-defined interpretations of superior health care and the overall quality of human life, Indian pharma is receiving all the attention.
In the upcoming ten years, it is predicted that the Indian pharmaceutical business will expand at a CAGR of roughly 10 percent to 12 percent.
Let’s begin with the top 10 Indian pharma businesses that are traded on the Indian stock exchange:
1. Sun Pharmaceutical Ltd
Sun Pharmaceutical Industries holds the number 1 spot on our top 10 list of Indian pharma stocks.
Sun Pharma Ltd. is the No. 1 and largest pharmaceutical company in India with over 8 percent market share in the domestic market. It is also a leading multinational pharmaceutical company. Sun Pharma was established in the year 1983.
It was founded by Mr. Dilip Shanghvi, who is also the MD of Sun Pharmaceuticals. The business began selling goods for the treatment of mental illnesses. The business now provides formulations in several therapeutic, gastrointestinal, and diabetology categories.
According to total sales, Sun Pharmaceutical Industries is the largest pharmaceutical firm in India. Additionally, it ranks as the fourth-largest specialized generic pharmaceutical firm worldwide.
In addition to providing a range of pharmaceuticals such as anti-cancer drugs, steroids, peptides, sex hormones, and regulated medications, they also offer Carbamazepine, Etodolac, and Clorazepate for sale. This company boasts several subsidiaries, including Ranbaxy Laboratories, and Sun Petrochemical Pvt. Ltd, Sun Ophthalmic Inc., Alkaloids Chemical Company Zrt, and Chattem Chemicals Inc. Their affordable medication sales extend their reach to over 150 countries across six continents, making healthcare accessible to a global audience.
Trivia- Sun Pharma was the first Indian pharmaceutical company to recognise and value the importance of funding research. Every year, the company dedicates up to 7-8 percent of its global profits to research and development (R&D), which is overseen by a capable group of more than 2000 experts.
2. Divi’s Laboratories Ltd
Divi’s Laboratories holds the number 2 spot on our top 10 list of Indian pharma stocks. Divi’s Laboratories Limited is an Indian multinational pharmaceutical company based in Hyderabad, India. Divi’s Laboratories was founded in 1990.
Divi’s Laboratories Ltd. manufactures active pharmaceutical ingredients (APIs) and intermediates. This Indian pharmaceutical company produces Nutraceutical components, custom-made APIs, intermediates, and leading generic chemicals for multinational innovative companies.
Trivia- One of the biggest API companies in the world, Divi’s Laboratories exports to over 95 nations. The active component or base salt that is present in the medication is referred to as the API (Active Pharmaceutical Ingredient).
3. Dr. Reddy’s Laboratories Ltd
Dr. Reddy’s Laboratories Ltd. holds the number 3 spot on our top 10 list of Indian pharma stocks. Dr. Reddy’s Laboratories Ltd. was founded by Anji Reddy in 1984.
It is an Indian multinational pharmaceutical company. It is known for manufacturing a wide range of pharmaceuticals in India and overseas. They offer more than 190 drugs, and 60 pharmaceutical active components for use in drug production, diagnostic tools, critical care supplies, and biotechnology items.
The notable products of Dr. Reddy’s include Canagliflozin. Ramipril, Ibuprofen, Naproxen, Atorvastatin, Nizatidine, Naproxen Sodium, etc.
Trivia- Fluoxetine, a generic equivalent of the well-known drug Prozac from Eli Lilly & Company, was first introduced in India by Reddy’s in 2001
Fluoxetine is a type of antidepressant known as an SSRI (selective serotonin reuptake inhibitor). It is often used to treat depression, and sometimes obsessive-compulsive disorder and bulimia (a binge eating disorder).
4. Cipla Ltd
Cipla Ltd. is an Indian multinational pharmaceutical and biotechnology company, which has its headquarters in Mumbai and was established in 1935 by Khwaja Abdul Hamied.
Cipla’s non-executive Chairman is Yusuf Hamied. It ranks as the fourth-largest pharmaceutical company in India in terms of overall sales. This Indian pharmaceutical firm focuses on creating drugs to address conditions like asthma, cardiovascular disease, arthritis, diabetes, weight loss, and depression, among many others.
More than 22,000 people work for Cipla. One of Cipla Pharmaceuticals’ subsidiaries is called Inwagen and it is the biggest producer of antiretroviral medications.
Trivia- Deferiprone, the first oral iron chelator ever, was introduced by Cipla in 1995. Chelation therapy is a treatment for lead, arsenic, and mercury poisoning. These metal ions are transformed and bound by chelating agents into an inert state that is excretable.
5. Biocon Ltd
Biocon Ltd. holds the number 5 spot on our top 10 list of Indian pharma stocks. Founded in the year 1978, Biocon Ltd. is the most popular pharmaceutical company in India.
Many active generic medications are produced by Biocon Limited. The company’s headquarters are in Bengaluru, and Biocon employs more than 9000 people. There is a massive global market for Biocon Limited’s products.
Other Biocon subsidiaries include Syngene International Ltd., Clinigene International, Biocon Biopharmaceuticals, Biocon-AxiCorp, NeoBiocon, and Biofusion Therapeutics Limited.
Trivia- Biocon introduced BIOMAb EGFR®, the first anti-cancer medication in India. An anticancer medication called Biomed EGFR Injection is used to treat specific types of brain and head and neck malignancies.
6. Torrent Pharma Ltd
Torrent Pharma Ltd. is one of the top pharmaceutical companies in India. It is based in Ahmedabad, Gujrat. Torrent has manufacturing plants in Dahej, Pithampur, Gujarat, and Madhya Pradesh.
Torrent Pharma produces pharmaceuticals for the anti-infective, digestive pain treatment, gastrointestinal diabetology, and Central Nervous System (CNS) segments.
Trivia- U.N. Mehta founded Trinity Laboratories, the predecessor to Torrent Pharmaceuticals (TPL), in 1959. In 1971, the company’s name was changed to the current one.
7. Lupin Ltd
Lupin Ltd. holds the number 5 spot on our top 10 list of Indian pharma stocks. Pharmaceutical giant Lupin Ltd. is headquartered in Mumbai. Desh Bandhu Gupta launched Lupin in 1968.
By market capitalization, it ranks as the 12th-largest firm. The business produces and sells medications for a variety of conditions, including asthma, diabetes, cardiovascular disease, anti-infectives, and tuberculosis.
The USA (Baltimore, Maryland), India, Europe, Japan, South Africa, Australia, the Philippines, Mexico, Latin America, and other regions are Lupin Limited’s main markets.
A few of Lupin Ltd.’s subsidiaries include Kyowa Pharmaceutical Industry Co. Ltd. and Lupin Pharmaceutical Inc.
Trivia- Pretomanid, an anti-TB drug that is a part of the three-drug “BPal” regimen, was given to Lupin Limited (Lupin) in September 2021 by TB Alliance, a non-profit drug developer. Lupin intends to distribute the anti-tuberculosis (TB) medication in more than 140 nations, including the top TB-endemic areas in the world.
8. Cadila Healthcare Ltd
Cadila Healthcare Ltd. was founded in 1952. It is an Indian pharmaceutical company headquartered in Ahmedabad and is ranked eighth among the top 10 pharma stocks. This company was founded by Ramabhai Patel.
Along with being a producer of herbal, skincare, and other OTC products, Cadila Healthcare Limited is renowned for its superior diagnostics. Based on the voluntary license agreement with Gilead™, the company also manufactures generic medications for the treatment of hepatitis C.
Three locations in India, Ankleshwar, Vadodara, and Patalganga, are where Cadila produces its API.
Trivia- Zydus Cadila is another name for Cadila Healthcare, which is now under works to establish itself as a distinct brand identity.
9. Aurobindo Pharma Ltd
Aurobindo Pharma Ltd. was established in 1986. It sells over 300 products in over 125 countries and its key segment is APIs, as 35% of the total revenue is generated from APIs. Aurobindo Pharma Limited produces and sells drugs for the treatment of neurological disorders, cardiovascular diseases, HIV/AIDS, diabetes, gastroenterology, and other conditions.
Trivia- More than 155 nations in the world are recipients of Aurobindo exports, and their international business accounts for more than 90% of company earnings.
10. Glenmark Pharmaceuticals Ltd
Glenmark Pharma Ltd. is a pharma company headquartered in Mumbai, India, and was founded in 1977 by Gracias Saldanha. Drug discovery at this pharmaceutical corporation has a significant impact on the fields of oncology, dermatology, and respiratory therapy.
By working with significant pharma companies, the firm is also concentrating on developing novel biosimilar medicines for the treatment of respiratory disorders, dermatological conditions, and cancer.
Trivia- After studies revealed that there was some efficacy of the medication in COVID-19 treatment, the business introduced a prospective COVID-19 medicine, Favipiravir, under the brand name FabiFlu in India in June 2020. A stronger variation of FabiFlu was also released in August 2020.
Conclusion
Given that India has roughly 3000 other corporations that are now involved in this industry, a list like ours would only be a drop in the ocean. Because patents and licenses are so important to the pharmaceutical industry, it is to be noted that smaller competitors also have an equal and fair shot to flourish.
Continuous R&D that helps keep up with the competition is the main driver of this market. Greater chances of long-term superior profits are always present for businesses that invest more in research.
That concludes our ranking of the Top 10 pharma stocks in India.
Note- The rankings are based on expansion projections, industry authority, and innovation potential. If you think we’ve forgotten to include a pharma stock that you believe belongs here, please comment!
Frequently Asked Questions (FAQs)
1. Why should I pay attention to the Indian pharmaceutical sector?
The Indian pharmaceutical sector is poised for significant growth in the upcoming decade, with experts projecting a robust Compound Annual Growth Rate (CAGR) of 12%. This growth is driven by India’s reputation for producing high-quality pharmaceuticals at competitive prices, its large pool of skilled scientists and engineers, and its position as a global leader in the production of generic drugs.
2. What are some key milestones in the evolution of the Indian pharmaceutical industry?
Historically, India has been known for its diverse medical systems, including Ayurveda, Naturopathy, and Unani. The industry saw a turning point with the Patents Act of 1970, which allowed pharmaceutical companies to patent their drug-making techniques locally. India’s accession to GATT in 1994 further catalyzed growth, leading to the emergence of highly advanced pharmaceutical players in the early 21st century.
3. How significant is India’s role in the global pharmaceutical market?
India is a major player in the global pharmaceutical market, supplying over 50% of the global demand for various vaccines and 40% of generic drugs in the US. The country ranks 3rd in terms of pharmaceutical production by volume and 14th by value. With a vast network of over 3,000 drug companies and 10,500 manufacturing units, India holds a significant position in the global medicines industry.
4. What factors contribute to the success of Indian pharmaceutical companies?
Indian pharmaceutical companies have gained recognition for their innovation, affordability, and quality. Companies like Sun Pharmaceutical, Divi’s Laboratories, and Dr. Reddy’s Laboratories have carved a niche for themselves in the global market through their focus on research and development, manufacturing excellence, and adherence to international quality standards.
5. How can investors capitalize on the growth of the Indian pharmaceutical sector?
Investors can consider investing in top Indian pharmaceutical stocks listed on the Indian stock exchange. Companies like Sun Pharmaceutical, Divi’s Laboratories, and Cipla Ltd. offer exposure to India’s thriving pharmaceutical industry. However, investors need to conduct thorough research, consider factors like growth projections, industry authority, and innovation potential, and seek professional advice before making investment decisions.
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