Best Healthcare Stocks to Buy in India – List of Top 10 Healthcare Industry Shares of 2023Last Updated Date: Sep 02, 2023
Check out the best healthcare companies stocks to buy in India. The world has been dealing with a global pandemic for the last two years. This has highlighted the importance of the healthcare sector and its allied services.
Healthcare has always been a critical sector, but it has come to the forefront during the pandemic. Several healthcare companies in India have grown during the pandemic.
This is because they supply lifesaving drugs, produce vaccines as well as other healthcare equipment and services. Thus, if you invest in healthcare stocks at this time, it can be beneficial.
This is because they are expected to see healthy growth in the years to come. In this article, we will look at the best healthcare stocks to buy in the country today.
Know about Healthcare Sector in India
The healthcare sector in India is vast. It consists of both pharmaceutical companies as well as healthcare services companies. This sector caters to several products and services.
These include generic and specialty drugs, vaccines, and Active Pharmaceutical Ingredients (APIs).It also includes services such as hospitals, laboratories, diagnostics, telemedicine, etc.
The healthcare sector alone expects to touch USD 372Bn by 2022. Furthermore, the pharma sector is expected to cross USD 60 Bn over the next 2 years.
The Indian stock exchanges list several of the top healthcare companies in India. Thus, they are accessible to Indian investors through healthcare sector stocks to buy.
Best Healthcare Stocks in India – List of Top 10 Healthcare Sector Stocks to Buy Today
The listed healthcare company stocks have been ranked on the basis of their market capitalization. The top 10 are tabulated below:
To determine the best healthcare shares in India, we have used a ranking system. The base parameter used is the market capitalization of the stocks.
The market capitalization of a stock is its market price multiplied by the stocks outstanding in the market. Thus, the higher the traded price of the company, the higher will be its market capitalization.
Shares that belong to the pharma and hospital sector rank in descending order based on their market capitalization. We have also listed other parameters such as their last traded price, 52 weeks high/low, and growth over 6 months and 1 year.
This is to help you choose which pharma and hospital shares to buy. Let us look at each one of these healthcare stocks in detail:
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Sun Pharma – Top Healthcare Companies in India
Sun Pharmaceuticals ranks number one in the list of healthcare shares to buy. This is in terms of its market capitalization. 1983 is the establishment year of Sun Pharma.
Thereafter it has grown considerably. Today it is, globally, the 4th largest specialty generic pharma company. Sun Pharma has its headquarters in Mumbai.
Furthermore, its operations are spread over more than 40 factories. Its total revenues exceed USD 45 Bn. Its product portfolio is vast and diverse.
Furthermore, it includes medicines for specialty fields, generic formulations, OTCs and APIs, and ARVs. Apart from Indian domestic sales, Sun Pharma exports its products to over 100 countries.
Why invest in Sun Pharma Stocks?
- With a market cap of Rs. 1.982 lac crores, Sun Pharma is one of the best medical stocks in India. Some of the reasons to invest in it today include:
- Increasing focus on specialty drugs business.
- Restoration of elective patient treatment post covid to boost this specialty segment business.
- Stock Market has seen an upside of more than 21% in the last year and is expected to continue this.
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Divi’s Labs – Best Medical Shares to buy
The next company that has made the top 10 healthcare stocks in India is Divi’s Laboratories Ltd. 1990 is the year of establishment of this company.
The registered office of the company is in Hyderabad in Telangana state. It has 3 production plants, 3 research and development centers.
Furthermore, it has more than 17000 employees working. Its main product line is APIs. This includes general APIs as well as Nutraceutical Ingredients.
It also provides custom synthesis of these APIS for big pharmaceutical companies. It provides its products globally to over 95 countries.
Divis Lab has a Market cap of Rs.1.185 lac crores. It has several growth drivers that make it a favorable stock for investors.
Why invest in Divi’s Labs Stocks?
- Steady growth of EPS – 24% each year over 3 years
- Healthy revenue growth and EBIT margin at 38%
- High promoter interest in the stock
- Focus on quality and R&D gives it a competitive edge
- A growth in the stock price of more than 17% over the last year.
All of these factors make it one of the best medical shares to buy.
Dr. Reddy’s Labs – Top Healthcare Sector Stocks
Noted scientist Dr. K. Anji Reddy established Dr. Reddy’s Laboratories in 1984. The company began by manufacturing APIs for some important medicines.
Thereafter they branched into various generic and specialty formulations. This has been under several brand names. The company started its exports in 1995. Thus, making it a multinational company today.
The range of its products includes – various generic medicines, OTC products, APIs, specialty formulations as well as therapeutic medicines. With over 20,000 employees today, their vision is to provide affordable medication to all.
Dr. Reddy’s lab has a market cap of Rs.0.78 lac crores. Many factors make it one of the top healthcare sectors to invest in.
Why invest in Dr. Reddy’s Labs stocks?
- Steady and double-digit growth in both revenue and profitability
- High proportion of promoter as well as FII holdings
- Producer of Made-in India Sputnik vaccine that can see increased demand in the covid 3rd wave
- The stock remains currently undervalued, giving good scope for growth in the medical share price in the years to come Therefore, it is a good short-term investment.
Cipla – Top Healthcare Companies in India
Coming in at number 4 of the top healthcare companies in India is Cipla Limited. Being one of the oldest companies on our list, Cipla was founded in 1935 by Dr. K.A Hamied.
It was the first Indian-founded pharma company. Today Cipla exports its products to over 80 countries through more than 1500 products.
It has an annual revenue of over USD 2.3 Bn. Its specialty lies in delivering its formulations in various forms. It produces millions of these units annually.
This includes tablets and capsules, oral liquids, nasal sprays, injections, eye drops, etc. Apart from this, it supplies over 200 APIs through 3 API R&D centers.
Several factors are contributing to the potential rise in the healthcare share price rise in India.
Why invest in Cipla stocks?
- It has several new product launches in the US market. They expect to boost sales and profitability.
- It has recently received USFDA approval for several of its specialty injections.
- It is applying significant effort in reducing costs and improving products.
- Thus, the stock of Cipla can be a good buy for Indian investors.
- Cipla Share Forecast suggests that it has very good future potential.
Apollo Hospitals – Top Hospital Stocks in India
Apart from pharma companies, there are also healthcare service companies to consider.
One of the top Hospital stocks in India has made our list – Apollo Hospitals. Apollo Hospitals is a chain of hospitals that opened in 1983. It began its operations in Chennai.
Thereafter, it has branched into several locations, today present in 71 locations with over 10,000 beds. It continues to have predominance in the South of India.
It provides specialty and super specialty services in the following areas – cardiac, ortho, neuro, pulmonary, gastroenterology, cancer. Transplants, pediatrics, etc.
It houses several brands such as Apollo Diagnostics, Apollo Clinic, Apollo Fertility, Apollo Cradle, Apollo 24/7, etc.
With over 8000 doctors, Apollo Hospitals has an annual revenue of over USD 1.5 Bn. Today it has a market cap of R. 0.728 lac crores. Being an established chain of hospitals, it can be a good buy for investors.
Why invest in Apollo Hospital stocks?
- Reputed hospital brand names can see a surge in demand through the pandemic. To result in double-digit CAGR of its revenues
- Its digital pharmacy business is seeing increasing penetration and acceptance
- The more than 100% price growth in the last year, proves how the pandemic will boost the business of this company
- All of the above can contribute to growth in the Apollo Hospital share price.
- Apollo Hospital Stock predictions say that the stock prices will rise in the next few months.
Gland Pharma – Top 10 Healthcare Stocks
Gland Pharma ranks 6th in the top 10 Healthcare stocks to buy. The Gland Pharma began in 1978 as a private company.
It thereafter went public in 1994. Today it has 7 manufacturing plants – 4 of these dedicated to formulations and 3 to the manufacture of APIs.
The total production capacity today is 750 million units. Their product line today includes injections primarily in oncology and ophthalmic areas.
Gland Pharma delivers its products in various forms including oral vials, syringes, ampoules, bangs, and drops.
They are constantly innovating through equity research and development to develop and manufacture more complex injectables.
Gland Pharma’s domestic business is a B2C segment that has a network of over 2000 hospitals. Globally they export their products to more than 60 countries.
Why invest in Gland Pharma stocks?
- Focus on injectables makes it a niche company.
- This will allow the company to benefit from economies of scale.
- With very little competition in the injectables space, Gland Pharma also has a free hand on pricing. This gives them more room for increasing their revenue.
- Gland Pharma has several pending patents, especially in the US market. When these get approved, there will be sufficient growth in the company.
These factors contribute to healthy growth for Gland Pharma as well as give it the potential for good healthcare share price rise.
Piramal Enterprises – Best Healthcare Stocks to buy
Piramal Enterprises is part of the larger Piramal group.
Its headquarters are in Mumbai, Maharashtra. It offers a wide portfolio of healthcare products and services. Piramal has 15 manufacturing facilities and a distribution network across more than 100 countries.
The company’s offerings include pharma products, contract research and manufacturing, and hospital and critical care services.
Its pharma products include products in the category of anesthetics, pain management, ophthalmology, and injectables.
Piramal Enterprises today has a market cap of Rs. 0.615 lac crores. It is one of the good healthcare shares in India to purchase.
Why invest in Piramal Enterprises?
- Likely demerger of pharma and financials business to increase management focus on pharma business.
- Growth of elective and non-elective treatments post-pandemic to boost its growth.
- High promoter holding means promoters have a considerable stake in ensuring the high growth of the company.
- In technical charts, the stock has reached the break-out point. This indicates a likely upward movement in the share price.
- These are some of the factors that make Piramal enterprises amongst the best healthcare stocks to buy.
Torrent Pharma – Healthcare Companies in India
Another strong company amongst the healthcare companies in India is Torrent Pharmaceuticals. Torrent Pharma had humble beginnings in the 1970s.
Over the years it has grown to become one of the healthcare stocks to buy. Torrent Pharma has extensive and advanced manufacturing facilities.
It focuses on research and development as well. Its huge success has been due to its niche marketing strategy. This has given it a pivotal position in areas such as cardiovascular, central nervous, gastro, and women’s health.
On the international front, it exports its products to over 40 countries. It does so through its network of subsidiary companies that are located in 12 international locations.
Its revenues today stand at more than Rs.3500 cr. Its core products – branded generics, are likely to see growth in the domestic and international market as the effects of the pandemic smoothen out.
With a market cap of Rs. 0.532 lac crores, Torrent Pharma is a big name in the healthcare sector in India.
Why invest in Torrent Pharma stocks?
- The company is less dependent on unstable China imports as compared to its peers.
- Even though the company is listed, the majority (>70%) of its shares continue to be held by promoters
- The stock shows promising price growth on intraday indicators
Cadila Healthcare – Best Healthcare Companies in India
Ranked at number 9 in the best healthcare companies in India is Cadila Healthcare Limited. Its registered office lies in Ahmedabad, Gujarat.
The company’s revenue has increased more than 60 times – from a revenue of Rs. 250 crores in 1995 to over Rs. 15,000 crores today. It has manufacturing units spread across 5 Indian states.
Its operations are also spread out across both developed and developing nations of the world. Its primary line of business is the manufacturing and sale of generic pharma drugs. This is done under the brand name of ‘Zydus Cadila’.
The company also undertakes considerable research in the fields of NCE, Biologicals, and Vaccines, to expand its product line. Cadila Healthcare is a large-cap company with a market cap of Rs. 0.464 lac crores.
Why invest in Cadila Healthcare stocks?
- Its commitment to enter into a niche and low competition spaces such as injectables and vaccines can boost its revenues.
- With Indian and global markets beginning to recover, its generics demand expects to normalize and grow in the times to come.
- High promoter stakeholding remains.
- Thus, Cadila Healthcare is one of the promising medical Stocks to buy today.
- Cadila Healthcare Share Prediction suggests that it has very good future potential.
Alkem Laboratories – Top 10 Healthcare Shares to buy
Rounding up the list of top 10 Healthcare shares to buy is Alkem Laboratories.
Its revenue today is over Rs.8,500 crores. 1973 is when this company was formed. Today it has over 20 manufacturing centers in India and overseas.
This is supplemented by 6 R&D centers as well. Its export business is robust with a presence in over 50 countries. Its product focus is on both generic and branded formulations.
It has over 800 registered brands under which its products are marketed and sold.
Why invest in Alkem Laboratories stocks?
- The company has shown healthy growth in domestic business after easing out of the 2nd wave of the pandemic.
- Its majority sales come from the domestic market, making this a positive growth driver.
- A spate of new product launches is likely to result in double-digit growth in revenue in years to come.
- These factors have made Alkem Labs occupy a position in our list of top medical shares to buy.
- Alkem Laboratories Stock predictions say that the stock prices will rise in the next few months.
Apart from these top 10 stocks, 5 more healthcare stocks are also promising. Thus, these have made it to our list of honorable mentions:
Aurobindo Pharma – Healthcare Sector Stocks to buy
Aurobindo Pharma had humble beginnings in Pondicherry in the late 1980s. It began its journey by manufacturing penicillin. Apart from this, the company has also gained considerable footing in other areas such as CNS, CVS, etc.
It has 11 API manufacturing facilities and 15 formulation manufacturing centers. Nearly 90% of its revenue is derived from its exports to over 155 countries.
With a market cap of Rs.0.432 lac crores, it has an attractive growth proposition. Its USP is its high margin specialty generic facilities which make for high profitability.
Increased USFDA filings and approvals also put it in a good growth position. Thus, this can also be considered as a good healthcare sector stock to buy
Aurobindo Pharma Stocks Prediction is expected to provide a good return.
Biocon – Healthcare Companies Stocks to buy
Another healthcare companies’ stock to buy that can be considered is Biocon Limited. It incorporates Bangalore as a biopharmaceutical company.
Its main business is APIs which are used by both domestic companies as well as global companies in over 120 countries.
It has over 1200 granted patents and 900 trademarks for its products. Biocon also has a significant contribution to covid vaccines and covid treatment.
This has contributed significantly to its growth and can continue to do so in the future.
Lupin – Medical Companies Shares to buy
Lupin Limited is a Mumbai-based pharma company. Its core line of business is in branded and generics, APIs, and specialty drugs.
It manufactures more than 1000 products through 15 manufacturing facilities. Its global exposure is also huge with exports to more than 100 countries. It has over Rs. 19,000 crores in revenue today.
Growth in its quarterly profits by 5 times indicates that this company is capitalizing on the economic recovery and recovery of the pharma business in India and the globe.
Thus, Lupin is a promising medical Company’s share to buy.
Abbott India – Healthcare Companies in India
Another promising company amongst the Healthcare companies in India is Abbott India Limited. One of the oldest companies on our list, the company was incorporated in 1910 in Mumbai.
Abbott India focuses on products to promote health and wellness amongst consumers. Apart from pharma products, its offerings include diagnostics, medical devices, and health and nutrition products.
Health and wellbeing are the focus of people today and thus Abbott India focusing on this area has a promising future for investors.
Max Healthcare Institute – Hospital Stocks in India
The last company on our list is amongst the listed hospital stocks in India – Max Healthcare Institute Limited. It is a chain of hospitals with its base in the capital, Delhi.
It has over 16 hospitals across the NCR region, Punjab, Uttarakhand, and Mumbai. Max undertakes almost all specialty and super specialty procedures in its hospitals. It has world-class facilities and employs over 3000 doctors.
A recovery in elective procedures can do well for the positive growth of this company and stock in the months and years to follow.
How to find Healthcare stocks for trading?
There are over 100 listed stocks in the healthcare sector. We have narrowed down on the top 15 stocks out of this larger universe. As an investor though you may not have sufficient funds to invest in all these healthcare stocks.
You can thus apply certain parameters/filters to analyze and trade in healthcare stocks:
Analysis of revenues and profitability – Understanding how the turnover, as well as profits, are growing is important. Stocks that show consistent and reasonable growth is considered.
Price to earnings ratio of the stock – This P/E ratio indicates how many times is the market price of the stock vis-à-vis its earnings per share. The higher the P/E ratio the higher its value.
Stocks whose P/E ratio is lower, especially than its industry average is considered. This would mean that the stock is fairly undervalued and has the potential to rise.
The debt-equity ratio of the stock – Excessively high ratio indicates the company has too much debt. This can be a risky proposition for investors. Thus, we can avoid stocks with a very high debt-equity ratio.
Shareholding pattern – Stocks that have a high promoter or institutional investor holding can be preferred.
This would indicate that there is considerable high-value investor interest in the stock.
These are some of the crucial criteria, basis on which you can choose the appropriate healthcare stock or stocks to include in your portfolio.
How to Invest in Healthcare Sector Stocks in India?
Once you have shortlisted the healthcare stocks, the next step is to invest in these healthcare stocks. For this purpose, the following is necessary:
- Open a demat account with a leading broking house. You can open the account online, sitting at home
- Activate a trading account as well to enable share trading
- You must link an active bank account to this demat account
- Post this, you will receive login credentials from the broking house
- You can access the trading platform of the broking house through a desktop or its mobile app
- Once logged in, you must transfer or retain sufficient funds in the linked bank account
- The shortlisted healthcare stock should be searched and the quantity of the stock, as well as the price at which you wish to buy, should be entered in the trading portal
- If this price and quantity is matched with offers from sellers in the stock market, your order will be executed
Once you invest in healthcare sector stocks through your demat, they will appear in your portfolio held with the chosen broker.
Top Healthcare companies in India – Conclusion
To summarise, we have conducted detailed research to bring to you the top healthcare companies in India. You can add these companies to your investing watchlist on your preferred trading platform or app.
These you can invest in from a time-to-time basis your investing appetite. So go ahead and begin investing in the promising healthcare sector through its top performers.
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