Best Healthcare Stocks in India

Investment in the healthcare stock can help advance the portfolio with its growth and performance. These stocks are well known for their static dividends, and medical advancements regardless of the economic conditions. It’s a booming industry that has been growing rapidly with improvements in services and increased spending by both the government and private sectors. 
 

What are Healthcare Stocks?

Healthcare stocks in India comprise companies in the medical sector including hospitals, medical devices and equipment, clinical trials, telemedicine and more. The government has introduced several initiatives to further enhance healthcare services in India namely the National Health Mission, Ayushman Bharat, National Medical Commission, Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), and PM National Dialysis Programme, National Medical Commission, among others. These initiatives aim to improve and promote healthcare infrastructure across the country, especially for vulnerable populations.

The healthcare system in India is divided into two segments namely public and private. The public sector aims to provide basic healthcare services through Primary Healthcare Centers (PHCs) primarily in rural areas, while the private sector offers most secondary, tertiary, and advanced care services, mainly in cities.
 

 

List of Popular Healthcare Stocks

Below is a rundown of popular healthcare stocks along with significant details that will help you in making a wise investment decision:

Company NameCMP (in Rs)Market Cap (in Cr Rs)P/E Ratio52-week high (in Rs)52-week low in Rs
Sun Pharmaceuticals Industries Limited1,471.503,60,89637.691,638.85977.30
Cipla Limited1,544.851,25,90530.551,582985.65
Dr Reddy’s Laboratories5,970.8099,34117.816,505.094,867.05
Divis Laboratories Limited4,504.051,18,86474.294,627.953,295.30
Zydus Lifesciences Limited1,088.651,08,02427.991,172.5547.90
Mankind Pharma Limited2,196.0588,66546.352,4901,645.05
Torrent Pharmaceuticals Limited2,858.1097,57658.922,9801,772.05
Max Healthcare Institute Limited934.8087,54582.79940.85508.50
Lupin Limited1,555.7071,67437.441,728821.60
Aurobindo Pharma Limited 1,243.2071,61322.571,292.10665.75

Disclaimer: All the above information is accurate as of 20th June 2024. However, it is important to conduct research before making any investment decisions in these stocks.
 

Overview of Best Healthcare Stocks in India as per Analyst Ratings

Underneath is the collection of companies in the healthcare industry that provide products and services related to medical care, medical devices, hospitals, clinics and more.

Sun Pharmaceuticals Industries Limited 

Sun Pharmaceuticals Industries Limited established in 1993 is a generic pharmaceuticals company. It is engaged in the business of manufacturing, developing and marketing branded and generic formulations and active pharmaceutical ingredients.

  • Sun Pharma’s net profit jumps 34% YoY to Rs 2,654.6 crore in Q4FY24.
  • The company’s has reduced its debt and is almost debt-free
  • The company has delivered good profit growth of 23.4% CAGR over the past 5 years
  • Sun Pharma has been maintaining a healthy dividend payout of 46.6%

Cipla Limited

Incorporated in 1935, Cipla Limited is an Indian-based company that operates through two segments namely Pharmaceuticals and New ventures. The company has approximately 47 manufacturing sites.

  • Cipla’s net profit jumps 79% YoY to Rs 939 crore in Q4FY24
  • The company has reduced its debt and is almost debt-free
  • The company delivered a good profit growth of 25.4% CAGR over the past 5 years
  • The company has been maintaining a healthy dividend payout of 22%

Dr Reddy’s Laboratories Limited

Dr Reddy’s  Laboratories Limited established in 1984 is a global pharmaceutical company that offers a portfolio of products and services. The company’s segment includes pharmaceutical services, active ingredients, and global generics among others. 

  • Dr Reddy’s net profit rose 36% YoY to Rs 1,307 crore, the firm also declared a dividend of Rs 40 per share
  • The company is almost debt-free
  • Dr Reddy has delivered good profit growth of 24.7% CAGR over the last 5 years

Divis Laboratories Limited

Divis Laboratories Limited is an India-based company, established in the year 1990. The company manufactures and sells active pharmaceutical ingredients, intermediaries and nutraceutical ingredients with a predominance in exports.

  • Divis Labs’ consolidated net profit soars 68% YoY to Rs 538 crore, the company declared a dividend at Rs 30 per share
  • The company is almost debt-free
  • The stock is trading at 8.81 times its book value

Zydus Lifesciences Limited

Zydus Lifesciences Limited incorporated in the year 1995 is an India-based life sciences company. The company engages in research, development, manufacturing, marketing and selling of finished dosages of human formulation, such as generic and speciality formulations, including biosimilars and vaccines, and consumer wellness products among others.

  • Zydus’s consolidated net profit jumps 4-fold at Rs 1,182 cr in Q4FY24.
  • The company has reduced its debt and is almost debt-free
  • The return on equity of the company stands at 19.46%.

Mankind Pharma Limited

Mankind Pharma Limited was incorporated in 1991 and comes with a diversified range of pharmaceutical formulations across various acute and chronic therapeutic areas along with several consumer healthcare products.

  • Mankind’s consolidated net profit rose 62% Y-o-Y at Rs 476.59 cr in Q4FY24.
  • The company is almost debt-free
  • The return on equity of the company stands at 20.43%
  • Mankind has delivered good profit growth of 28.8% CAGR over the past 5 years

Torrent Pharmaceuticals Limited

Torrent Pharmaceuticals Limited established in 1972, focuses on various therapeutic segments, such as cardiovascular, central nervous system, gastrointestinal, dermatology and more.

  • Torrent Pharma’s consolidated net profit increased 56.45% to Rs 449 crore in Q4FY24.
  • The company has reduced its debt
  • The company has maintained a healthy dividend payout of 73.8%
  • The return on equity of the company stands at 24.15%

Max Healthcare Institute Limited

Max Healthcare Institute Limited engaged in the business of healthcare facilities was established in the year 2001. It operates through the medical and healthcare services segment.

  • Max Healthcare’s consolidated net profit stood at Rs 311 crore in Q4FY24.
  • The company’s debt to equity is 0.15
  • The return on equity of the company is 12.58%

Lupin Limited 

Lupin Limited was established in the year 1983, engaged in the production, development and marketing of branded and generic formulations, biotechnology products and active pharmaceutical ingredients globally.

  • Lupin’s consolidated net profit reported a jump of 52.4% year-on-year at Rs 359.4 crore Q4FY24.
  • The company has reduced its debt to 0.20.
  • The return on equity of the company is 13.40%.

Aurobindo Pharma Limited

Aurobindo Pharma Limited incorporated in 1986 is engaged in the manufacturing and marketing of active pharmaceutical ingredients, branded pharmaceuticals, generics pharmaceuticals and related services.

  • Aurobindo Pharma’s consolidated net profit rose 79.5% year-on-year at Rs 908.7 crore in Q4FY24
  • The company’s debt to equity stood at 0.20
  • The company’s return on equity is 13.40%
     

Factors to Consider Before Investing in Healthcare Stocks in India

Before investing in healthcare stocks investors should monitor various factors that might affect prices. Below are some factors investors should consider before investing in healthcare stocks.

  1. Regulatory Impact: Changes in healthcare regulations, such as drug pricing policies, insurance coverage rules, and tax laws related to medical research, can significantly impact the profitability and stock valuations of healthcare companies.
  2. Industry Dynamics: Investors should stay updated on industry trends like technological advancements, shifting consumer preferences, and evolving treatments, as these factors can influence the demand and growth prospects of healthcare companies, affecting their stock prices.
  3. Competition from New Players: The entry of new players in the healthcare market can disrupt the existing competitive landscape. Increased competition may lead to reduced earnings and lower stock prices for established companies.
  4. Geopolitical Influence: Geopolitical events like trade wars or economic sanctions can negatively impact the healthcare sector. Supply chain disruptions caused by such events can affect a company's ability to meet consumer demand, potentially leading to lower stock prices.
     

How to Start Investing in Healthcare Stocks with BlinkX?

BlinkX helps you guide in your investment journey, turning complexities into rewards within the dynamic healthcare stocks sector.

Here are three simple steps to start investing in healthcare stocks:

Step 1. Go to the official website of https://blinkx.in/ or simply download the BlinkX app.

Step 2. Open a free demat account.

Step 3. And then start investing.
 

Benefits of Investing in Healthcare Stocks

Well, there are enough benefits for you to decide to invest in the healthcare sector in India.

  • Consistent Demand: The demand for healthcare stocks 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 covid pandemic. With the growing population ages and the prevailing chronic diseases, this sector can provide long-term growth opportunities for investors.
  • Diversification: Of course, adding healthcare stocks to a portfolio can help diversify risk, especially when other sectors are underperforming because the health sector is less volatile and has more growth opportunities in the upcoming time compared to other sectors.
  • Innovations and profits: With 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 lead to significant profits for investors if these innovations are successful.

     

Conclusion
Conducting due research is always the most significant step when considering a new investment in healthcare stocks or any other market sector. Investors should do their due diligence, monitor market movements, and consider how government regulations and world events may affect these stocks. If done carefully and with well-informed judgement, investing in Indian healthcare stocks may be an attractive opportunity.

FAQs for Best Healthcare Stocks in India

Diversification is always important when investing with no exception in the healthcare sector. By diversifying sectors, investors can better manage risk and create a proper investment strategy with a higher potential for returns over time.

Investors should conduct prior research on the company's balance sheet, income statement, and cash flow statements to get a thorough idea of how well the company is doing financially. Alongside, they should also keep an eye on other factors such as industry trends and macroeconomic conditions to gain an understanding of the stock’s potential for growth or decline.

During economic downturns, healthcare stocks are likely to be impacted in different ways. In some cases, demand for products and services may decline, resulting in lower earnings for the companies.

Investing in the healthcare sector can be an attractive decision for investors due to its potential for growth and stability. The sector is constantly evolving with advancements in technology, changing consumer preferences, and new treatments which can lead to increased demand for products and services.

New regulations regarding drug pricing or insurance coverage may lead to increased costs for companies which can result in lower valuations. Additionally, changes to tax laws such as deductions for investments into medical research and development can influence stock prices. Therefore, investors should stay updated with the latest news to make informed decisions.