3 Undervalued Pharma Stocks to Watch

#2 Torrent Pharmaceuticals

Second on our list is the stock of Torrent Pharmaceuticals.

The company is the flagship company of the Torrent Group. Post JB Pharma acquisition it is ranked 5th in the Indian Pharmaceuticals market and is amongst the top 5 in the therapeutics segments of Cardiovascular (CV), Gastro Intestinal (GI), Central Nervous System (CNS), Pain Management and CosmoDermatology.

The promoters of the company hold 68.31% stake. The ROE of the company was strong at 25.2%.

Torrent Pharma has a consistent track record of dividend and profitability.

Moving ahead, the company recently announced the launch of its Semaglutide brands - Sembolic and Semalix - in India, in both oral and injectable formulations. The launch expands the company's presence in metabolic disorders such as type-2 diabetes and obesity.

Torrent Pharma is the first Indian company to offer this treatment across oral and injectable formulations, giving healthcare professionals a holistic choice for treating patients.

It has good prospects driven by its leadership in chronic therapies like cardiac and CNS, which ensure steady, recurring demand. Strategic acquisitions such as JB Chemicals are expected to enhance scale and domestic market share.

#3 Ajanta Pharma

Next on our list is the stock of Ajanta Pharma.

Ajanta Pharma is a specialty pharmaceutical company with a pressence in more than 30 countries.

The company has a strong emphasis on innovation, customer needs, and delivering differentiated products using advanced technology.

The company has good return ratios, strong promoter holding of 66.25%, and dividend of 1,400%.

Ajanta Pharma's outlook seems promising, supported by its robust branded generics presence in regions like India, Asia, and Africa, alongside an expanding generics business in the US.

The company's recent FY26 quarterly performance demonstrated solid growth in both revenue and profits, reflecting consistent execution.

With a foothold in specialised therapy areas such as cardiology, dermatology, and ophthalmology, it leverages trusted relationships with healthcare professionals to generate sustained demand.

Additionally, its focus on chronic therapies is strengthening revenue predictability and fostering long-term resilience while improving overall earnings quality.

Should You Consider Pharma Stocks?

Pharma stocks can be worth considering as part of a diversified portfolio. The sector is driven by steady healthcare demand, ageing populations, rising chronic diseases, and export opportunities.

In India, many pharma companies also gain from generics, specialty drugs, and domestic healthcare growth. Some offer defensive qualities during market volatility.

However, risks include USFDA regulatory issues, pricing pressure, patent expiries, currency movements, and high competition.

Performance can vary sharply between companies. Investors should focus on strong balance sheets, research pipeline, compliance track record, and valuations.

Overall, specific pharma stocks can be good, selective long-term investments, but not a blind sector-wide investment.

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...