The 2025 Union Budget introduced a series of reforms that investors believe might be in the favour of the healthcare and medical sector stocks in the long term. The healthcare sector comprises hospital companies, pharmaceutical companies, and diagnostic companies. The nifty healthcare index has shown positive movement since the budget.
This blog highlights key reforms in the healthcare sectors and some healthcare stocks that investors should keep on their watchlist.
Budget reforms for the healthcare sector
The government of India introduced some healthcare reforms that can be beneficial for the healthcare sector stocks in the long run. These reforms are aimed at improving the reach and quality of healthcare in the country. Some of these are:
- The government allocated ₹98,311 crores to the Healthcare Ministry. This is an increase of 9.8% from the last budget, and this fund will be focused on improving services.
- To boost the production of medicines and other pharmaceutical products in the country, the government has also allocated ₹2,445 crores for the Production Linked Incentive (PLI) scheme.
- The budget 2025 also introduced plans to open 200 cancer care centers across the country in the next three years, boosting the demand for medicines and pharma equipment.
- Of the total allocation, the National Health Mission (NHM) was allocated ₹37,226.92 crores. This fund will be spent on the improvement of primary and secondary healthcare.
These measures can give a good boost to the earnings of healthcare stocks and medical sector stocks in the future
Also read: The pharmaceutical industry in India and its contribution to the world
Healthcare sector stocks
Let us take a look at some of the top healthcare stocks, including pharmaceutical companies, healthcare services companies (hospitals), and diagnostics companies, based on their market capitalisation as of 6th February 2025.
| Name of Company | Market Cap. (as on 6th Feb 2025) (₹ cr) | 1-year % return | Price to Earnings ratio | Price to Sales ratio |
| Max Healthcare | 1,11,990 | 40.53% | 105.62 | 17.12 |
| Sun Pharmaceutical | 4,21,791 | 17.15% | 35.78 | 8.17 |
| Apollo Hospital | 1,00,649 | 12.41% | 85.07 | 4.92 |
| Cipla | 1,16,950 | -0.14% | 23.49 | 4.33 |
Source: Screener
Max Healthcare Ltd
Max Healthcare is engaged in providing healthcare services through a chain of hospitals. It provides consultation, surgery, radiology, and pathology services through a chain of multi-specialty and super-specialty hospitals. The company has over 22 facilities with a capacity of over 5,000 beds.
| Particulars | Q3FY25 (₹ Cr) | Q3FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 1,868.31 | 1,334.97 | 39.9% |
| Net Profit | 238.80 | 289.34 | -17.5% |
| Net Profit Margin (%) | 12.8% | 21.7% | -8.9% points |
| Basic EPS | 2.46 | 2.98 | -17.4% |
Source: Max Healthcare Q3FY25 Result
Key financial highlights for Cipla limited in Q3F25 are:
- The decline in year-on-year net profit was attributed to a one-time charge of ₹74 crores that the company paid related to the acquisition of Jaypee Healthcare acquisition.
- The company also announced the setting up of a 500-bed hospital in Maharashtra by 2028. This will increase the future profitability.
- Max Healthcare also plans to increase the capacity of Mohali Hospital from 250 beds to 400 beds, thus increasing the revenues.
- The increase in revenue was contributed by a 28% increase in international patient revenue to ₹201 crores. This can be boosted further, given the government’s focus on improving medical tourism in the country.
Also read: All about health insurance schemes for a millennial investor
Sun Pharmaceutical Ltd.
Sun Pharma is the largest pharmaceutical company in India. This company manufactures a wide variety of generic and branded medicines. It manufactures injectables, ointments, sprays, capsules, and liquid medicines.
| Particulars | Q3FY25 (₹ Cr) | Q3FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 13,436.94 | 12,156.86 | 10.5% |
| Net Profit | 2,912.98 | 2,560.54 | 13.8% |
| Net Profit Margin (%) | 21.7% | 21.1% | – |
| Basic EPS | 12.1 | 10.5 | 15.2% |
Source: Sun Pharmaceutical limited Q3FY25 Results
Key highlights for the company includes:
- Sun Pharma launched 12 new products in India and four new products in the US in the third quarter of the 2025 fiscal. This can increase the market share of the company in the future.
- The company spent ₹845 crores in research and development in the third quarter. This can help in finding new and innovative products and increasing sales in the future.
- There are 7 novel entities in clinical trials and 109 waiting for approval from the US FDA, approval of which can help increase the future revenues of the company.
- The company has been involved in litigation in the US regarding its medicine Leqselvi, so investors must carefully track this development. An unfavorable decision might lead to penalties.
Apollo Hospital Ltd.
With a capacity of over 10,000 beds spanning over 73 facilities, Apollo Hospitals is one of the largest hospital chains in the country. It provides a wide range of medical services, from consultations to surgeries. Apollo hospitals provide services like advanced surgeries, dialysis, radiotherapy, etc.
| Particulars | Q2FY25 (₹ Cr) | Q2FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 5,589.3 | 4,846.9 | 15.3% |
| Net Profit | 395.7 | 248.8 | 59% |
| Net Profit Margin (%) | 7.08% | 5.13% | +1.95% points |
| Basic EPS | 26.34 | 16.20 | 62.7% |
Source: Apollo Hospital Q2FY25 results
Key highlights for Apollo hospitals limited:
- Apollo Hospitals aims to add 3,512 beds in the next four years. The company can benefit from the government’s plans to increase the reach of healthcare services.
- The company plans to build a 500-bed hospital in Worli, Mumbai, and raise the capacity of its Lucknow facility by 200 beds, which will boost revenues in the future.
- The consistently increasing demand for healthcare services is helping the company in increasing its revenues and profits.
Cipla Ltd.
Cipla Limited is involved in the business of manufacturing medicines and other pharma products. The company has been operating since 1935. It offers over 1500 products and employs over 25,000 people.
| Particulars | Q3FY25 (₹ Cr) | Q3FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 7,072.97 | 6,603.81 | 7.1% |
| Net Profit | 1,574.59 | 1,068.41 | 47.4% |
| Net Profit Margin (%) | 22.3% | 16.2% | – |
| Basic EPS | 19.45 | 13.08 | 48.7% |
Source: Cipla Ltd. Q3FY25 results
Some key highlights for Cipla limited in Q3FY25 are:
- The increase in revenues was attributed to 10% growth in chronic therapies in India and 20% year-on-year growth in Europe and the rest of the world business.
- Cipla is planning to launch Afrezza, an inhalable insulin that can boost revenues significantly. The company is also in talks for a partnership with global pharmaceutical giant Eli Lilly.
- The company spent ₹360 crores in research and development, which can help in boosting future market share.
- The company has ₹8,947 crores in net cash positions that can help in the company’s growth plans and facing unprecedented challenges.
An interesting read: Cipla vs Sun Pharma: Titans of India’s pharmaceutical industry
Peer comparison
| Name of Company | Market Capitalization | 1-year % return | Price to Book Ratio(Ind. Avg: 3 – 3.5) | Good/Bad | Dividend Yield (Ind. Avg: 0.5 – 1%) | Good/Bad |
| Max Healthcare | 1,11,990 | 40.53% | 12.61 | 👎 | 0.13% | 👎 |
| Sun Pharmaceutical | 4,21,791 | 17.15% | 6.09 | 👎 | 0.76% | 👍 |
| Apollo Hospital | 1,00,649 | 12.41% | 13.21 | 👎 | 0.23% | 👎 |
| Cipla | 1,16,950 | -0.14% | 4.22 | 👍 | 0.89% | 👍 |
Source: Screener
Also read: The healthcare industry in India: An overview
Bottomline
The healthcare sector is the key focus of the government. The 2025 budget was aimed at developing healthcare services in India in the long run. Healthcare sector stocks can be key beneficiaries of these plans. Investors must carefully examine key healthcare and medical sector stocks before investing. Remember that investing in stocks can be risky. So thorough risk management must be followed.
