5 Pharma CDMO Stocks to Watch Out for in 2025

India's CDMO (Contract Development and Manufacturing Organization) sector is buzzing-and for good reason.

While China has long been the go-to destination for pharma outsourcing thanks to its massive API production and low costs, the tide is turning. Ongoing geopolitical tensions, trade issues, and the aftermath of COVID disruptions have made global pharma players rethink their overdependence on China.

In 2024, some Indian CDMOs saw a 50% jump in proposal requests as drug companies looked to diversify.

What's making India even more attractive? Competitive pricing-about 20% lower than what Chinese firms typically offer-paired with strong execution capabilities.

With this momentum building, here are 5 Indian Pharma CDMO stocks to watch out for in 2025.

#1 Cipla

First on the list is Cipla.

Cipla is the third-largest pharmaceutical company in India. It has a diversified product portfolio of over 1,500 products across 65 therapeutic areas. It also has market leadership across various product categories.

In the CDMO space, it has teamed up with Kemwell Biopharma and Manipal Group to launch a joint venture in the US focused on developing cutting-edge cell therapy products.

Cipla and Kemwell already have a US-based JV called Aspergen, formed in 2022, which is currently working on biosimilars for global markets.

Thanks to Kemwell's state-of-the-art facility in Bangalore, India is slowly but surely becoming a go-to hub for cell therapy development.

On the financial front, Cipla's revenue and net profit has seen strong growth over the years.

Cipla's Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue	171,320	191,596	217,633	227,531	257,741
Revenue Growth (%)	4.7	11.8	13.6	4.5	13.3
Net Profit	15,470	24,013	25,595	28,355	41,553
Net Profit Margin (%)	9.0	12.5	11.8	12.5	16.1
Return on Equity (%)	9.8	13.1	12.3	12.1	15.6
Return on Capital Employed (%)	13.1	17.7	17	17.8	21.8

Source: Equitymaster

Coming to its financials Cipla's revenue and net profit have grown at a compounded annual growth rate (CAGR) of 9.5% and 22.5% respectively during FY20-24.

It has delivered strong returns, with the RoE and RoCE averaging 12.6% and 17.5%, respectively.

Looking ahead, Cipla is betting big on innovation. It's not just developing new products but also joining forces with Sanofi India to distribute its CNS (Central Nervous System) product line.

For more details, see the Cipla company fact sheet and quarterly results.

#2 Divi's Laboratories

Next on the list is Divi's Laboratories.

Divi's Laboratories Limited is a leading Indian pharmaceutical company specialising in the manufacturing and sale of Active Pharmaceutical Ingredients (APIs), intermediates, and nutraceutical ingredients.

Divi's Labs is a significant player in the global CDMO space, particularly in the API (Active Pharmaceutical Ingredient) and custom synthesis of intermediates for global innovator companies.

It's the largest CDMO firm in India, working with 12 out of the top 20 global pharma companies.

Divi's Laboratories Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue	53,944	69,694	89,598	77,670	78,450
Revenue Growth (%)	9.1	29.2	28.6	(-13.3)	1.0
Net Profit	13,765	19,843	29,605	18,240	16,000
Net Profit Margin (%)	25.5	28.5	33.0	23.5	20.4
Return on Equity (%)	18.8	21.3	25.2	14.3	11.8
Return on Capital Employed (%)	25.0	28.7	31.4	18.6	16.0

Source: Equitymaster

Between FY20 and FY24, Divi's Lab's revenue and net profit have surged with a CAGR of 9.7% and 3.4%, respectively.

The company has demonstrated consistent financial strength, with an average RoE of 18.3% and RoCE of 23.9%.

Divi's Laboratories is developing a three-unit project within a 500-acre manufacturing facility in Kakinada, Andhra Pradesh. Phase I, spanning 200 acres, commenced commercial operations in January 2025.

For more details, see the DIVIS LABORATORIES company fact sheet and quarterly results.

#3 Akums Drugs

Next on the list is Akums Drugs.

Akums Drugs & Pharmaceuticals Ltd is a leading Indian contract manufacturer of pharmaceutical products. The company specialises in producing a wide range of generic drugs, including formulations for tablets, capsules, and injectables.

In the CDMO space, Akums Drugs has signed up for a strategic collaboration with a leading global pharma company to supply select oral liquid formulations to the European market.

The composite value of the CDMO agreement is around Rs 17.6 bn, and the project has been secured with an upfront payment of Rs 8.8 bn. The commercial supply of these formulations from Akums will begin in 2027, and last till 2032.

As part of the agreement, Akums will make and supply a globally-renowned brand of oral liquid formulation, which will be marketed across Europe by one of the largest multi-national pharma companies.

Akums already has a Europe-approved facility to supply tablets, hard gelatine capsules, sachets, ampoules, vials, eye drops and dry powder injections. This latest agreement adds one more dosage form to the company's portfolio.

Akums Drugs & Pharma Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue	24,142	27,226	36,719	36,548	41,782
Revenue Growth (%)	20.2	12.8	34.9	(-0.5)	14.3
Net Profit	437	1,231	(-2,509)	978	8
Net Profit Margin (%)	1.8	4.5	(-6.8)	2.7	0.0
Return on Equity (%)	6.0	13.9	(-40.3)	13.6	0.1
Return on Capital Employed (%)	18.3	20.2	(-27.8)	23.6	0.7

Source: Equitymaster

Between FY20 and FY24, Akums Drugs' revenue has risen at a CAGR of 15.8%. Meanwhile, its net profit has seen a decline.

The company's RoCE and RoE have averaged 6.7% and 7%.

For more details, see the AKUMS DRUGS & PHARMACEUTICALS LTD. company fact sheet and quarterly results.

#4 Dr Reddy's Laboratories

Next on the list is Dr Reddy's Laboratories.

Dr Reddy's Lab is one of India's largest pharmaceutical firms in the country. The company manufactures a wide range of pharmaceuticals with expertise spanning several therapeutic areas.

Through its step-down subsidiary Aurigene Pharmaceutical Services Limited (APSL), it's making strong strides in the CDMO space.

APSL acts as a comprehensive Contract Research, Development, and Manufacturing Organization (CRO/CDMO), offering end-to-end solutions to global pharmaceutical and speciality companies.

Its services span the full spectrum from early-stage drug discovery to commercial-scale manufacturing, covering both API and formulation development.

It has cGMP manufacturing facilities in the UK, Mexico, USA, and India, enabling them to serve a global clientele.

The company has seen a positive financial trend.

Dr Reddy's Lab Financial Snapshot (FY20-24)

(Rs m, Consolidated)	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24
Revenue	175,170	190,475	215,452	246,697	280,111
Revenue Growth (%)	13.4	8.7	13.1	14.5	13.5
Net Profit	20,260	19,516	21,825	45,073	55,779
Net Profit Margin (%)	11.6	10.2	10.1	18.3	19.9
Return on Equity (%)	13.1	11.1	11.4	19.5	19.8
Return on Capital Employed (%)	12.7	16.4	16.1	26.6	25.7

Source: Equitymaster

Its revenue grew at a CAGR of 12.6% from FY20 to FY24, while net profit grew at 23.4%.

The company maintained strong financial health, with an average RoE of 14% and RoCE of 19.5%.

Going forward, Dr Reddy's number one priority is to reinvest in the business, both in the drug pipeline as well as in building businesses of the future.

For more details, see the DR. REDDYS LAB company fact sheet and quarterly results.

#5 Wockhardt

Last on this list is Wockhardt.

The company is a global pharmaceutical and biotechnology company. It specializes in developing, manufacturing, and marketing a wide range of generic drugs, vaccines, and biotechnology products.

With a strong presence in over 20 countries, Wockhardt focuses on sectors like healthcare, animal health, and active pharmaceutical ingredients (APIs).

Wockhardt is making its mark in the CDMO space by offering end-to-end contract manufacturing services, from early-stage development all the way to large-scale commercial production.

With manufacturing facilities across the globe and a strong Full Turnkey Service model, the company aims to be the go-to outsourcing partner for pharma players looking for reliable, high-quality solutions.

Wockhardt Financial Snapshot (FY20-24)

(Rs m, Consolidated)	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24
Revenue	28,440	27,080	32,300	26,510	27,980
Revenue Growth (%)	(-20.3)	(-4.8)	19.3	(-17.9)	5.5
Net Profit	(-1,380)	(-2,970)	(-2,790)	(-6,210)	(-4,720)
Net Profit Margin (%)	(-4.9)	(-11)	(-8.6)	(-23.4)	(-16.9)
Return on Equity (%)	(-5.2)	(-8.9)	(-7.3)	(-18.6)	(-14.1)
Return on Capital Employed (%)	(-1.7)	(-8.3)	(-2.7)	(-9)	(-2.7)

Source: Equitymaster

While its revenue has declined over the years, the profit has increased marginally.

Despite this, the company maintained strong financial health, with an average RoE of 14.9% and RoCE of 20.6%.

Going forward, the company plans to expand into new markets and strengthen its sustainability initiatives.

For more details, see the WOCKHARDT company fact sheet and quarterly results.

Conclusion

Beyond the five companies we've looked at, several others like Gland Pharma, Laurus Labs, and Suven Pharma are also making their mark in the CDMO space.

Recent research in 2025 shows that India's CDMO market is on a strong growth path-expected to rise from US$ 15.63 bn in 2023 to US$ 44.63 bn by 2029.

A report by the Boston Consulting Group (BCG), released in February 2025, points out that India could soon command a 4-5% share of the global CDMO market.

This growing demand spells exciting opportunities for Indian pharma players and could help position the country as a global leader in drug development and manufacturing services.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...