The Indian pharmaceutical sector has demonstrated robust growth over the past year, driven by a new trade agreement with the European Union that reduces tariffs on key drug exports. This agreement is expected to enhance India’s position as a global supplier of generic medicines, leading to increased trade volume and job creation. The sector has shown positive momentum in the short term, reflecting a steady rise in investor confidence. Analysts project substantial upside potential for various companies operating in this space.
Several top companies in the sector have been identified as having strong upside potential. Cohance Lifesciences Limited, a technology-driven contract development and manufacturing organization, has a target price of Rs. 1400.00, indicating an upside potential of 33%. Piramal Pharma Limited, a global pharmaceutical company, has a target price of Rs. 271.00, reflecting an upside potential of 32%. Natco Pharma Limited, a vertically integrated pharmaceutical company, has a target price of Rs. 1090.00, indicating an upside potential of 28%.
Other companies with strong upside potential include Aurobindo Pharma Limited, which has a target price of Rs. 1470.00, reflecting an upside potential of 23%, and Blue Jet Healthcare Limited, which has a target price of Rs. 943.00, indicating an upside potential of 19%. Zydus Lifesciences Limited, a global life sciences company, has a target price of Rs. 1040.00, reflecting an upside potential of 18%.
Overall, the outlook for the Indian pharmaceutical sector remains positive, driven by the new trade agreement with the European Union and the growth potential of various companies operating in the space. Analysts recommend a strong buy for Cohance Lifesciences and Piramal Pharma, a buy for Aurobindo Pharma and Blue Jet Healthcare, and a hold for Natco Pharma and Zydus Lifesciences.
The financial performance of these companies has been strong, with many reporting significant year-on-year sales growth. However, some companies have seen a decline in profit after tax (PAT) due to various factors. Despite this, the long-term implications of the trade agreement and the growth potential of the sector are expected to drive growth and innovation in the Indian pharmaceutical industry.