Here’s Why You Should Bet on Pharmaceutical Industry

In the last year (2020), when the Indian economy was badly shaken, the pharmaceutical industry was one of the few sectors that stood upright
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

  • |
  • Aug 03,2021
  • |
  • 12 Mins Read

In recent times, pharmaceutical companies have gained prominence. They have lately played a great role in mitigating the effects of the pandemic. Their contribution in protecting human lives has facilitated in getting their sheen back. Apart from the social view, pharmaceutical companies have also gained attention for adding and shoring up the economy.  

After looking dull in bourses for some time, various best pharma stocks have started shining again. In the last year (2020), when the Indian economy was badly shaken, the pharmaceutical industry was one of the few sectors that stood upright. According to the Indian Economic Survey 2021, the country’s domestic pharmaceutical market is estimated at $42 billion in 2021 and likely to reach $65 billion by 2024 and further expand to reach approximately $120-130 billion by 2030. The country’s drugs and pharmaceuticals exports stood at $24.44 billion in FY21.

In addition to this, the pharma sector has been recognized by foreign investors. According to the DPIIT, the drugs and pharmaceutical sector attracted a cumulative FDI inflow worth $17.75 billion between April 2000 and December 2020. Hence, it can be said that the pharma industry may experience steady growth in the forthcoming time. 

It is the right time for investors and entrepreneurs to plunge and seize this opportunity. Here are some reasons that make the pharmaceutical industry a good bet. 

Manufacturing COVID-related Products

The pandemic is still looming over India as well as the world. To fight the virus, the healthcare industry particularly, pharmaceutical companies can help. Production of vaccines and other related products are only weapons that can help mitigate the spread of the COVID-19 virus. 

Therefore, pharmaceutical companies act as a catalyst in saving the economy and human lives as a whole. Investing or venturing into this industry will be an apt decision at the moment. Starting one’s pharmaceutical firm will also be a good move seeing the current market situation. 

Performance in Domestic Bourse

In the last few quarters of FY20-21, pharma stocks have performed well. They have demonstrated a good driving force and thus, veterans believe that an upside can be witnessed in the pharma sector. For instance, Sun Pharma, which is presently the top pharma stock in India, has been showing positive growth in the stock exchange. Owing to this, the broking firm, Motilal Oswal that is holding shares in Sun Pharma has earned much more than its anticipation. According to The Economic Times’ report, the broking company said that it values Sun Pharma’s stock at 25 times in 12-month forward earnings to arrive at its price target of INR 900.

This depicts how the best pharma stocks in India are performing in the market. Besides infusing money in good-performing pharma stocks, you can invest in low-price pharma stocks such as Glenmark Pharma, AurobindoPharma and Cadila Health that are not top gainers in Nifty but are expected to see an upside in the offing. 

Boosting the Healthcare Industry

Irrespective of the current health crisis, pharmaceutical companies play a pivotal role in the healthcare sector. They manufacture medicines, equipment and other technologies to combat diseases. They are the backbone of the healthcare industry as a whole. 

As a result, the pharma industry would not lose its place in the market. Market conditions rarely impact this sector henceforth, a fiasco or health crisis cannot create a formidable dent in the pharma industry. 

These reasons show why you step into the pharma sector and buy the best pharma stocks in India. You would have to do a wide, individual study to decide which pharma stocks to buy in India as personal preferences will affect your choices. 

Please add your Comment

More from Jaspreet Kaur

Our Group Companies

Get Industry First Insights

Sign up for our exclusive Newsletter

  • Follow BusinessEx
Stay tuned & get updated