The Indian Pharmaceutical industry has experienced significant growth and a positive outlook in 2023. The sector has expanded its global footprint, with India being the largest provider of generic medications worldwide, occupying a 20 percent share of the global supply by volume.
The pharmaceutical industry has been growing rapidly in recent years due to several factors such as increasing demand for generic drugs, growing healthcare infrastructure, and favourable government policies. The Indian pharmaceutical market continues to clock a growth of 9 to 10 percent.
A higher RoCE indicates better capital utilization efficiency, while a higher RoE signifies more profitability from shareholders’ equity. It is essential to use both RoCE and RoE together to evaluate a company’s financial performance comprehensively.
Listed below are such Pharma stocks having high RoE and RoCE:
Concord Biotech Ltd
With a market capitalization of Rs. 15,982 crores, the shares of Concord Biotech started Thursday’s trading session on a lower note at Rs. 1,491 compared to its previous close of Rs. 1,498.25.
During the trading session, the shares hit a high of Rs.1,559, gaining around 3 percent and closed the day at Rs. 1522 apiece.
Looking at the company’s financial statements, the revenue decreased by 8 percent from Rs. 84 crores during the September quarter to Rs. 241 crores in the December quarter. In addition, the net profits declined by 11 percent from Rs. 84 crores to Rs. 75 crores during the same timeframe.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 16.95 percent during FY 21-22 to 19.85 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 21.86 percent to 26.42 percent during the same timeframe. Furthermore, the net profit margin increased from 25.05 percent during FY21-22 to 27.91 percent during FY22-23.
RPG Life Sciences Ltd
With a market capitalization of Rs. 2,514 crores, the shares of RPG Life Sciences started Thursday’s trading session on a higher note at Rs. 1,501.75 compared to its previous close of Rs. 1,483.70.
During the trading session, the shares hit a high of Rs. 1,539, gaining around 4 percent and closed the day at Rs. 1,510 apiece.
During both the September and December quarters, the company’s financial statements showed consistent figures. Revenue remained stable at Rs. 154 crores, indicating that the company’s top-line performance didn’t fluctuate significantly between the two periods. Similarly, net profits also remained constant at Rs. 26 crores, suggesting that the company’s bottom-line performance was steady over the specified quarters.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 11.93 percent during FY 21-22 to 21.36 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 14.59 percent to 26.22 percent during the same timeframe. Furthermore, the net profit margin increased from 10.13 percent during FY21-22 to 18.27 percent during FY22-23.
Dr Reddy’s Laboratories Ltd
With a market capitalization of Rs. 1,02,969 crores, the shares of Dr Reddy’s Laboratories started Thursday’s trading session on a higher note at Rs. 6,078 compared to its previous close of Rs. 6,044.
During the trading session, the shares hit a high of Rs. 6,209.80, gaining around 3 percent and closed the day at Rs. 6,157 apiece.
Coming onto the company’s financial statements, the revenue increased by 5 percent from Rs. 6,903 crores during the September quarter to Rs. 7,237 crores in the December quarter.
On a contrasting note, the net profits decreased by 7 percent from Rs. 1,482 crores to Rs. 1,381 crores during the same period.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 11.84 percent during FY 21-22 to 21.21 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 14.46 percent to 25.99 percent during the same timeframe. Furthermore, the net profit margin increased from 10.13 percent during FY21-22 to 18.27 percent during FY22-23.
Written By Vaibhav Patil
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