The Indian pharmaceutical industry is expected to double in value by 2030, presenting an attractive opportunity for long-term investment. Pharmaceutical stocks are appealing due to the sector’s resilience against market fluctuations and robust growth potential, fueled by rising healthcare demands and government support for innovation. Investors may find significant prospects in this evolving market landscape.
Here are a few pharmaceutical stocks recommended by analysts with high-growth potential of up to 27 percent:
Mankind Pharma Limited
With a market capitalization of Rs.1 lakh crore, the share price of Mankind Pharma Limited reached an intra-day high of Rs.2,645 per share on Monday, rising 3.8 percent from its previous close.
Investec, a prominent brokerage firm, has recommended a “Buy” call on Mankind Pharma Limited with a target price of Rs.3,300 per share, indicating an upside potential of 25 percent.
The brokerage noted that Mankind Pharma’s innovation-driven goal aligns well with Bharat Serums and Vaccines (BSV).
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The brokerage believes the market underestimates BSV’s unique advantages, projecting potential sales of $1 billion and over 35 percent EBITDAM (Earnings Before Interest, Taxes, Depreciation, Amortization, and Management Fees.) by FY32 under Mankind’s management, representing a significant improvement of over 1,000 basis points.
Investec sees BSV’s specialty strengths in R&D and sourcing as valuable assets that can enhance Mankind’s vision and drive long-term growth. BSV’s strong presence in India is expected to boost sales, particularly in the largely untapped $6 billion IVF market.
In its recent financial updates, Mankind Pharma reported revenue of Rs.2,403 crore in Q1FY25, marking a 15 percent growth from Rs.2,092 crore in Q1FY24. Similarly, the company’s net profit grew to Rs.513 crore from Rs.409 crore in the same period, reflecting a 25 percent increase.
In terms of return ratios, return on capital employed (ROCE) is currently at 24.6 percent, while return on equity (ROE) is at 19.7 percent. The company has a strong current ratio of 2.04 and a low debt-to-equity ratio of 0.0.
Yatharth Hospital & Trauma Care Services Limited
With a market capitalization of Rs.4,808 crore, the share price of Yatharth Hospital & Trauma Care Services Limited reached an intra-day high of Rs.584.95 per share on Monday, rising 4.4 percent from its previous close.
Edelweiss, a renowned brokerage and wealth management firm, has recommended a “Buy” rating on Yatharth Hospital & Trauma Care Services Limited with a target price of Rs.740 per share, indicating an upside potential of 27 percent from the current market price.
The brokerage believes Yatharth Hospital aims to double its bed count within three years by strategically acquiring new beds. This expansion is expected to boost capacity and services to accommodate a growing patient base.
Yatharth Hospital aims to increase its share of international patients by tapping into the lucrative medical tourism market, potentially boosting profitability significantly.
In its recent financial updates, the company reported revenue of Rs.212 crore in Q1FY25, marking a 37 percent growth from Rs.155 crore in Q1FY24. Similarly, the net profit of the company grew to Rs.30 crore from Rs.19 crore in the same period, reflecting a 58 percent increase.
In terms of return ratios, return on capital employed (ROCE) stands at 23.6 percent, while return on equity (ROE) is at 21.7 percent. The company also features a strong current ratio of 7.59 and a low debt-to-equity ratio of 0.10.
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Written by – Siddesh S Raskar
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