Analysts betting on these four pharma, hospital stocks due to Indian healthcare sector's strong growth prospects
Pharma segment outlook
Hospital segment outlook
Sun Pharmaceuticals
Gained market share in the domestic formulations segment in Q4 FY25, with 14% year-on-year revenue growth driven by higher volumes and new product launches.
Missed Reuters-Refinitiv estimates, with revenue falling short by 3.3% and net profit by 13.3%, primarily due to weaker sales in the US and Rest of the World (RoW) markets.
Domestic growth outlook supported by upcoming launches in anti-diabetes and weight management therapies; US growth to come from existing product sales.
Plans to invest $100 million in specialty portfolio (dermatology and oncology) for product launches, promotions, and field force expansion.
Motilal Oswal remains bullish, citing Sun's push for differentiated offerings in regulated markets to drive future earnings.
Reported in-line revenue growth in Q4 FY25, while net profit beat Reuters-Refinitiv estimates by 19.1%, aided by higher other income and lower finance costs.
India business drove revenue growth and is expected to remain strong, supported by its innovative portfolio and therapies like respiratory and urology.
Recent US approvals for cancer drugs (Abraxane, Nilotinib) and upcoming respiratory launches over the next 12–18 months are expected to stabilise US performance.
Management is focused on boosting manufacturing capacity, investing in R&D for differentiated products, and exploring inorganic growth opportunities.
According to Antique Stock Broking, Cipla is entering a structural growth phase in the US generics market, driven by continued investment in complex generics, respiratory, and peptide segments.
Apollo Hospitals Enterprise
An integrated healthcare services provider, the company reported in-line revenue and a 5% net profit beat versus Reuters-Refinitiv estimates in Q4 FY25, supported by higher other income and a lower tax rate; the hospital segment delivered a mixed performance..
ARPOB rose 5% y-o-y driven by higher patient realisation; expected to improve further with better payer mix and rising surgical volumes.
Plans to add 3,577 beds over 3-4 years; margin impact from new additions to be offset by cost optimisation.
Pharmacy business outlook supported by growing GMV, new store openings, and efficiency measures.
Diagnostics segment expected to revive, led by growth in primary and secondary clinics.
Motilal Oswal sees positives in bed additions, better productivity at existing facilities, reduced pharmacy losses, and a likely turnaround in diagnostics profitability.
Fortis Healthcare
Posted in-line revenue and an 11.3% net profit beat in Q4 FY25, driven by higher ARPOB and better occupancy.
Hospital revenue grew 14% y-o-y; diagnostics rose 3%.
Management expects 14-15% hospital growth in 2025-26 and 24-25% diagnostics margins over 2–3 years.
Expansion underway via greenfield projects and acquisitions (Manesar, Jalandhar).
Elara Capital raised 2026-27 earnings estimates on strong growth guidance.
The healthcare sector—including pharmaceuticals and hospitals— delivered a strong performance in the March 2025 quarter. The pharmaceutical segment benefited from increased demand in chronic therapies within the domestic formulations market, along with steady growth in the US generics business. Meanwhile, the hospitals segment was bolstered by expanded bed capacity and robust growth in average revenue per occupied bed (ARPOB).According to Reuters-Refinitiv data, 129 pharmaceutical companies—including those in biotechnology and life sciences— reported an aggregate revenue growth of 11.5% year-on-year (y-o-y) in the March 2025 quarter. Meanwhile, 26 healthcare providers, including diagnostic firms , recorded a 15.1% year-on-year revenue growth.The analysis includes only companies with a market capitalisation above `100 crore. In comparison, Nifty 500 companies posted a lower aggregate revenue growth of 6% y-o-y.The healthcare sector performed well in 2024 amid global economic uncertainty driven by geopolitical tensions, trade disruptions, and interest rate volatility. The Nifty Healthcare Index emerged as the second-best performer among the 16 sectoral indices on the National Stock Exchange (NSE) over the past year.However, the sector's performance—particularly pharmaceuticals—has moderated in recent months due to concerns over the loss of exclusivity for generic Revlimid (gRevlimid), a cancer drug, which is expected to intensify competition and pressure prices and margins. Additionally, nearterm growth challenges in the domestic formulations segment have weighed on the sector outlook.Moreover, the recent announcement by US President Donald Trump regarding potential tariffs on pharmaceutical imports has dampened investor sentiment. Indian pharmaceutical companies, which earn a significant share of their revenue from US exports, are expected to feel the impact. As a result, the Nifty Pharma Index has become the fourth worst-performing sectoral index on the NSE in 2025 so far, based on data as of 23 June 2025.The long-term prospects of the pharmaceuticals sector remain intact. A recent Axis Securities report lists strong product pipeline in biosimilars, GLP-1 (class of drugs used to treat diabetes), and peptides (chain of amino acids used to treat diseases), stable margins, and higher contribution from chronic therapies as key growth catalysts for Indian pharmaceutical companies. Moreover, stability in price erosion, differentiated portfolio, and exposure to complex generics is expected to support the US generics segment.While concerns remain over the loss of exclusivity for gRevlimid, Indian pharmaceutical companies stand to gain from strong opportunities in the US generics market. The expiry of exclusivity is expected to accelerate generic launches, benefiting manufacturers— particularly Indian players.According to a recent report by Antique Stock Broking, a combination of greater loss-of-exclusivity opportunities, rationalised global competition, and improved regulatory compliance is expected to drive revenue growth for Indian pharmaceutical companies through new product launches and volume gains in existing businesses.Analysts also see potential in the CDMO (contract development and manufacturing organisation) space. A BNP Paribas report highlights investor feedback suggesting that India stands to benefit as global innovators diversify supply chains away from China. However, concerns persist over high valuations in the segment and limited near-term earnings visibility.In the hospital segment, factors such as the rise in lifestyle diseases, improving affordability and accessibility driven by higher disposable incomes, a significant demand-supply gap, growing medical tourism, a shift in payer mix due to increased insurance penetration, and bed capacity expansion by private players are expected to drive growth.Furthermore, low healthcare spending in India compared to the world average, rising median age, and a pickup in highgrowth therapies such as cardiac and cancer care—which boost ARPOB and occupancy— are the additional growth catalysts. An IBEF report estimates the Indian hospital market to grow by 8% CAGR between 2022-23 and 2031-32 to reach $193.6 billion. Here are the four stocks (two each from the pharmaceuticals and hospitals segments) with strong analyst coverage.Estimated TAM growth (%)
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