5 Indian Pharma Stocks to Watch on Rising China+1 Opportunities

#2 Divi's Laboratories

Next on the list is Divi's Laboratories.

Divi's is one of the world's leading manufacturers of Active Pharmaceutical Ingredients (APIs), supplying high-quality products to customers in over 100 countries.

The company manufactures generic APIs, intermediates, and nutraceutical ingredients, while also offering custom synthesis services to global pharmaceutical companies across the entire drug development lifecycle.

The company is the world's largest manufacturer in more than 10 generic APIs and currently commercialises 30 API products, with another six under development. Ranked among the top 3 API manufacturers globally.

Exports contributed nearly 89% of the company's total sales in FY26, with Europe and the United States together accounting for around 74% of export revenue, highlighting its strong presence in regulated markets.

With global pharmaceutical companies increasingly diversifying supply chains under the China+1 strategy, Divi's Laboratories is well positioned to stay in focus due to its large-scale API manufacturing capabilities, strong export franchise, and long-standing relationships with global pharma companies.

Going forward, the company remains focused on expanding its global presence, strengthening customer partnerships, and enhancing its product portfolio, making Divi's Laboratories one of the key pharma stocks to watch in the China+1 theme.

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

#3 Laurus Labs

Next on the list is Laurus Labs.

Laurus Labs is a research-led pharmaceutical and biotechnology company offering an integrated platform across affordable medicines and Contract Development and Manufacturing Organization (CDMO) services. From its strong foundation in APIs and finished dosage formulations (FDF), the company has evolved into a global development and manufacturing partner.

Its business spans Active Pharmaceutical Ingredients (APIs), Small Molecules, Finished Dosage Formulations (FDF), and Biologics. APIs contribute around 40% of the company's revenue.

The company also has growing capabilities in CDMO services, formulation manufacturing, and biologics, enabling it to cater to global pharmaceutical companies.

Laurus Labs derives a significant share of its revenue from international markets, with exports accounting for 62.14% of its total turnover.

With global pharmaceutical companies increasingly diversifying their supply chains under the China+1 strategy, Laurus Labs is a stock to watch due to its integrated manufacturing platform, strong API business, expanding CDMO capabilities.

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

#4 Piramal Pharma

Next on the list is Piramal Pharma.

Piramal Pharma (PPL) offers a diversified portfolio of differentiated products and services through its 17 global development and manufacturing facilities.

The company operates through three business segments: Piramal Pharma Solutions (PPS), an integrated contract development and manufacturing organization (CDMO); Piramal Critical Care (PCC), which focuses on complex hospital generics; and the India Consumer Healthcare business, which markets a wide range of over-the-counter products.

Additionally, one of PPL's associate companies, AbbVie Therapeutics India Private Limited, a joint venture with AbbVie Inc., has emerged as one of the market leaders in the ophthalmology therapy segment.

Piramal Pharma has a strong global revenue base, with 66% of its FY26 revenue generated from regulated markets, while North America and Europe together accounted for 61% of total revenue.

Moreover, 40% of its revenue comes from differentiated offerings, including antibody-drug conjugates (ADCs), high-potency active pharmaceutical ingredients (HPAPIs), sterile injectables, peptides, and on-patent API development and manufacturing.

Its established presence in regulated markets and advanced manufacturing capabilities position the company in the list of stocks to watch amid China+1 strategy.

Going forward, Piramal Pharma plans to strengthen its India Consumer Healthcare business by expanding its distribution network, accelerating its presence in Tier 3 and Tier 4 towns through general trade.

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

#5 Dr. Reddy's Laboratories

Next on the list is Dr. Reddy's Laboratories.

Dr. Reddy's Laboratories is a global pharmaceutical company with a diversified portfolio spanning active pharmaceutical ingredients (APIs), generic formulations, biosimilars, over-the-counter (OTC) products, innovative medicines, and custom pharmaceutical services.

The company has a strong presence across key therapeutic areas, including oncology, central nervous system disorders, pain management, gastroenterology, and cardiovascular diseases.

Dr Reddy's has established a broad international footprint, with key markets including the United States, Europe, India, Russia, CIS countries, Brazil, South Africa, Vietnam, China, and Colombia.

In FY26, Dr. Reddy's strengthened its pipeline through novel drug development and AI-assisted drug discovery, expanded its biosimilars portfolio across Europe and the UK, and partnered with global health institutions to improve access to critical medicines in more than 14 low- and middle-income countries.

It also expanded its commercial presence in sub-Saharan Africa and Southeast Asia while continuing to invest in healthcare access and patient support initiatives.

North America remained the company's largest market, contributing 38% of Global Generics (GG) sales and 34% of overall revenue in FY2026.

Emerging Markets accounted for 23% of GG sales and 20% of overall revenue, while Europe contributed 19% of GG sales and 17% of overall revenue, highlighting the company's strong presence across regulated and international markets.

Going forward, Dr. Reddy's aims to expand access to its medicines to over 1.5 bn people by 2030, up from approximately 699 m people reached globally in FY2026.

Its strong presence in regulated markets, expanding biosimilars portfolio, investments in complex products and APIs, and diversified global manufacturing network position the company for China+1 strategy.

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

Should You Invest in China+1 Pharma Stocks?

The China+1 strategy is creating long-term opportunities for Indian pharmaceutical companies as global drug makers look to diversify their supply chains beyond China.

India's strong manufacturing base, cost competitiveness, large pool of US FDA-approved plants, and growing capabilities in APIs, CDMO services, and complex formulations position it as a key alternative sourcing destination.

Companies with significant exposure to regulated markets such as the US and Europe, diversified manufacturing facilities, and expertise in high-value products like biosimilars, injectables, and specialty APIs are likely to stay in focus the most from this structural shift.

In addition, firms expanding their global manufacturing footprint and investing in research and development could be better placed to capture new outsourcing opportunities.

However, investors should also keep an eye on risks such as pricing pressure in generic medicines, regulatory inspections, currency fluctuations, and increasing competition from other manufacturing hubs.

Overall, the China+1 strategy remains a long-term structural growth driver rather than a short-term catalyst, making fundamentally strong Indian pharma companies with global operations worth considering for long-term investors.

Investors should carefully evaluate these companies' fundamentals, corporate governance, and valuations 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...