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The performance of the index has been lackluster for the last one year, with the index delivering a negative return of 7.29%. But many stocks have outperformed with their dedent gains as investors were seeking strong businesses in this space. But as most of the counters are quite beaten down from their highs and it might make sense to pick some of the most profitable pharma stocks for the long term.
In that vein, here are 3 such companies that clocked the highest net profit in Q3 FY23 and all are down over 20% from their all-time highs.
Sun Pharmaceuticals Industries Limited
Sun Pharmaceutical Industries Ltd. (NS:) which has a market capitalization of INR 2,31,547 crores and owns the popular supplement brand Revital secures the top spot on the list. The company clocked a revenue of INR 11,414.85 crores in Q3 FY23, up by 10.8% YoY, while net income jumped 5.3% to INR 2,173.3 crores, making it the highest profitable pharma company on the NSE.
Owing to its strong business, the stock rallied 16.8% in the last one year but it is down 20.1% from its all-time high of INR 1,200.8, making it a good candidate for a long-term portfolio. It is also trading at a dividend yield of 1.04%.
Dr. Reddy’s Laboratories Limited
Dr. Reddy’s Laboratories Ltd (NS:) is the second name on the list which has a market capitalization of INR 73,433 crores. The company’s revenue jumped 26.6% YoY in Q3 FY23 to INR 6,854.5, while net profit saw a noticeable uptick of 75.3% YoY to INR 1,243.9 crores, translating into a profit margin of 18.5%, compared to 13.1% in Q3 FY22.
In the last one year, FIIs have increased their stake from 27.42% to 37.82%, as of December 2022. The stock delivered a 12.7% return in the last 12 months, outperforming its benchmark, but still down 22.6% from an all-time high of INR 5,614.6.
Cipla Limited
The last name on the list of Cipla Ltd. (NS:) which has a market capitalization of INR 76,694 crores and trades at a P/E ratio of 30.47. The company’s December 2022 quarter revenue jumped 21.1% YoY to INR 5,924.53 crores and net income increased a modest 9.6% YoY to INR 801.1 crores, with a profit margin of 13.52%.
FIIs have consistently been increasing their stake in the company, going from 24.36% in December 2021 to 28.39% by December 2022. It also outperformed the Nifty Pharma index, delivering a negative 2.55% return in the last one year, and is now down 24% from its all-time high of INR 1,185.25. Looking at the weekly chart, the stock could still fall to INR 850 which might be an ideal level to add to the portfolio.
Read More: 3 Hacks to Survive a Losing Streak!
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