Which are the top pharma companies in India right now?
These companies have been ranked as per their market capitalization. The higher the market cap, the higher the total value of the company.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
When should you invest in the pharma sector?
As there is a constant demand for pharma products, stocks from the pharma sector provide stable earnings regardless of the state of the overall stock market. For this reason, they are often called defensive stocks and can protect your portfolio during bad times.
However, in a sustained bull run, these stocks will underperform the market.
The defensive sector can also get defenseless against headwinds in export markets. In the export markets, price erosion can impact the sector.
Therefore, the best time to buy pharma stocks is when there is a gloomy picture on the economic front.
Where can I find a list of pharma stocks?
What kind of dividend yields do pharma stocks offer?
There is no consistent trend of dividends across the pharma industry, with different companies having different dividend policies.
For more details, check out the top pharma stocks offering high dividend yields.
How should you value pharma companies?
Investing in stocks requires careful analysis of financial data to find out a company's true worth. However, an easier way to find out about a company's performance is to look at its financial ratios.
Two commonly used financial ratios used in the valuation of stocks are -
Price to Earnings Ratio (P/E) - It compares the company's stock price with its earnings per share. The higher the P/E ratio, the more expensive the stock.
To find stocks with favorable P/E Ratios, check out our list of pharma stocks according to their P/E Ratios.
Price to Book Value Ratio (P/BV) - It compares a firm's market capitalization to its book value. A high P/BV indicates markets believe the company's assets to be undervalued and vice versa.
To find stocks with favorable P/BV Ratios, check out our list of pharma stocks according to their P/BV Ratios.