The 2025 budget has introduced reforms for the pharmaceutical industry. Some analysts believe that these reforms will give a good push to the pharmaceutical stocks, whereas some analysts believe that these reforms are not enough for the government’s ambitious long-term plans for the industry.
This article highlights the reforms introduced in the budget 2025 by the Indian government and the best pharmaceutical stocks that can be impacted by these reforms.
Budget 2025: Pharmaceutical Sector
The 2025 budget supports the government’s plans to improve the healthcare services in the country. Over the long term as more and more people will have access to healthcare, the demand for medicines, pharma products and services will rise.
But the market participant believes that the provisions of the budget might be insufficient for the government to achieve its ambitious goal of providing quality healthcare to all the citizens. The key reforms introduced in the 2025 budget for that can impact the pharmaceutical stocks and industry are as follows:
- The government introduced full custom duty exemption on 36 life-saving medicines. This measure will improve the affordability of these medicines, making it easier for the public to access them. But at the same time, this will increase competition for domestic pharmaceutical players.
- ₹20,000 crores have been allocated for research and development of medicines for private sector players. This will help in new drug discovery and improvement of healthcare services.
- The 2025 budget also introduced measures to boost medical tourism in India. This move can possibly increase the demand for medicines and pharmaceutical products in the country.
- Under the “Make in India” scheme and “National Manufacturing Mission”, the government has announced steps to improve the ease of doing business in the country.
Market participants believe that these reforms are insufficient to significantly improve the pharmaceutical industry in India. The outcome of these measures can be seen in the prices of pharmaceutical stocks in the coming months.
An interesting read: The pharmaceutical industry in India and its contribution to the world
Pharmaceutical Sector Stocks
Let us take a look at some of the pharmaceutical sector stocks based on their market capitalization as on 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 |
| Zydus LifeSciences | 1,01,524 | 23.42% | 22.44 | 4.56 |
| Torrent Pharma | 1,06,945 | 17.56% | 57.46 | 9.46 |
| Sun Pharmaceutical | 4,18.084 | 17.15% | 35.49 | 8.10 |
| Mankind Pharma | 1,02,256 | 16.67% | 52.84 | 10.96 |
Source: Screener
Zydus LifeSciences
Zydus Life is a pharmaceutical manufacturing company that is involved in the business of manufacturing drugs. The company has a presence in over 25 countries, and it employs over 1400 researchers. Zydus ranks among the biggest pharmaceutical companies in India.
| Particulars | Q3FY25 (₹ Cr) | Q3FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 5,269.1 | 4,542.9 | 16% |
| Net Profit | 1,023.5 | 789.6 | 29.6% |
| Net Profit Margin (%) | 19.4% | 17.4% | 11.4% |
| Basic EPS | 10.17 | 7.80 | 30.4% |
Source: Zydus LifeSciences Q3FY25 Results
Key financial highlights for the company in Q3FY25 are as follows:
- The company attributed its revenue and net profit hike to foreign exchange gains, where a depreciating rupee helped the company and strong performance in the consumer wellness segment.
- The company reported an EBITDA margin of 26.3%, which was lower than expected. The reason for this is that the product mix that the company offers in the US saw shrinking margins.
- The company states that increasing competition in foreign markets might affect profitability in the future.
- Analysts have mixed views on the company as it stated that it is concerned about its growth beyond FY27.
Torrent Pharma
Torrent Pharma is involved in the business of researching, manufacturing, and marketing generic medicines and formulations. The company boasts its presence in over 50 countries. The company owns eight manufacturing units. The company sells its consumer products under four brands – Tedibar, Shelcal, Unienzyme, and Ahaglow.
| Particulars | Q3FY25 (₹ Cr) | Q3FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 2809 | 2732 | 2.8% |
| Net Profit | 503 | 443 | 13.5% |
| Net Profit Margin (%) | 17.9% | 16.2% | 10.5% |
| Basic EPS | 14.88 | 13.10 | 13.5% |
Source: Torrent Pharma Q3FY25 Result
Key Highlights for torrent pharma in Q3 of 2025 fiscal:
- The increase in revenue was attributed to a 14% growth in the chronic treatments segment. The company’s India business, which contributed 56% of the revenue, showed a growth of 12% year-on-year.
- The revenues from Brazil were down 7% at ₹291 crores because of the fluctuation of the exchange rate between the currencies of the two countries. This shows the exchange rate risk that the company faces.
- The revenues from the USA were down 1% at ₹271 crores, but at the same time company’s Pithampur facility got USFDA clearance. This can increase sales in the USA.
- The company won some tenders in Germany that can increase the company’s market share in that country.
Also read: Torrent Pharmaceuticals Ltd.
Sun Pharmaceutical
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% | 2.8% |
| Basic EPS | 12.1 | 10.5 | 15.2% |
Source: Sun Pharmaceutical limited Q3FY25 Results
Key financial highlights for Sun pharma in Q3FY25:
- The company reported an increase in revenue from operations, but the US sales stayed flat year-on-year because of slow growth in Revlimid, a generic medicine.
- In the third quarter of FY25, the company spent ₹845 crores on research and development. This spending was maintained below 7% of revenues because of delays in clinical trials.
- The company paid ₹316.2 crores for a legal settlement in the US, and the company is also awaiting the outcome of another litigation. This shows the high regulatory environment of the pharmaceutical industry.
- Sales in emerging market countries grew 10.1% YoY at $277 million, making up 17% of total revenue from operations.
An interesting read: Cipla vs Sun Pharma: Titans of India’s pharmaceutical industry
Mankind Pharmaceuticals
Mankind Pharma manufactures and markets various acute and chronic therapeutic medicines. The company also manufactures certain consumer healthcare products. The company sells its products in over 25 countries. The company owns 30 facilities across the country.
| Particulars | Q3FY25 (₹ Cr) | Q3FY24 (₹ Cr) | YoY change (%) |
| Revenues from Operations | 2,396.57 | 2,209.21 | 8.5% |
| Net Profit | 416.38 | 487.08 | -14.5% |
| Net Profit Margin (%) | 17.37% | 22.05% | -21.2% |
| Basic EPS | 10.35 | 12.16 | -14.9% |
Source: Mankind Pharma Q3FY25 Results
Key financial highlights for Q3FY25:
- As a result of the acquisition of Bharat Serums and Vaccines (BSV) and 30% YoY growth in the consumer healthcare segment, the revenue from operations for the company increased by 8.5%
- The decline in net profit and net profit margin has been attributed to higher expenses related to the acquisition of BSV, for which the company will pay a total of ₹13,768 crores.
- The company is also facing regulatory challenges in the acute therapies segment. That has impacted profitability.
Peer Comparison
| Name of Company | Market Capitalization | 1-year % return | Price to Book Ratio (Ind. Avg: 3.5 – 4) | Good/Bad | Dividend Yield (Ind. Avg: 0.5 – 0.75%) | Good/Bad |
| Zydus LifeSciences | 1,01,524 | 23.42% | 4.65 | 👎 | 0.30% | 👎 |
| Torrent Pharma | 1,06,945 | 17.56% | 14.54 | 👎 | 0.89% | 👍 |
| Sun Pharmaceutical | 4,18.084 | 17.15% | 6.07 | 👎 | 0.76% | 👍 |
| Mankind Pharma | 1,02,256 | 16.67% | 9.51 | 👎 | 0.00% | 👎 |
Source: Screener
Bottomline
Budget 2025 is being considered to be mixed for pharmaceutical sector stocks. Some analysts consider the budget to be very positive, and some consider this budget insufficient for pharmaceutical stocks. The real impact of the budget will be disclosed by the pharma share prices in the coming months. Investors must conduct their own thorough research before investing in the pharma sector and follow proper risk management strategies.
Also read: Post Budget Impact on FMCG Stocks: Trends & Best Picks
